The ongoing citrus greening disease is impacting orange prices and Tropicana’s profits.
- Naked Juice reports a decrease in expected profits due to escalating orange prices.
- Production costs have risen as the disease devastates Florida’s orange crops.
- A shift to sourcing oranges from Brazil aims to mitigate the impact of the disease.
- Market leaders warn of potential further price increases due to environmental challenges.
The citrus greening disease continues to exert pressure on the orange industry, resulting in inflated costs for producers. Naked Juice, the owner of Tropicana, has highlighted a severe impact on their profitability. The company now anticipates an underlying profit of $322 million, a decline from its earlier estimate of $375 million, as reported by The Times. This decrease is attributed to soaring orange prices, driven by the disease’s impact on crops.
In the past year, Florida’s orange crops have suffered extensive damage due to the disease, compounding difficulties in sourcing healthy fruit and driving up production costs. The price of oranges has surged, reaching heights of $6,500 per tonne.
To counter the damage in Florida, Tropicana’s strategy has involved sourcing a greater proportion of their oranges from Brazil, where the effects of citrus greening have been less severe. Currently, 75% of their oranges are sourced from Brazil, with the remaining 25% from Florida. The implementation of better technology in Brazil has somewhat curtailed the disease’s spread, providing a more stable supply chain.
Nick Canney, the CEO of Innocent, a juice and smoothie brand, underscored the broader implications of weather-related challenges on pricing. He remarked that future price increases are likely inevitable, affecting millions of consumers. As Canney noted, “Over time, it will definitely move prices forward again.” The focus remains on maintaining affordability for consumers despite these challenges.
The citrus greening disease continues to challenge major juice producers, prompting strategic shifts and ongoing concerns over rising costs.