LAND

Bombshell ag report predicts worst orange crop since '60s

THE DAILY FRAY
May 13, 2015 9:48 am

oranges.jpgFlorida's orange growers were on a sugar high in October after a government report predicted a leap in production for the 2014-15 season. Others were cautious, including Wall Street investors who pay for private research. Someone had to be right. And it doesn't seem to be the Feds.

The U.S. Department of Agriculture said Tuesday that the annual orange crop will yield 96.4 million boxes of fruit, down 8 percent from 104 million boxes last season and the lowest output since the 1960s.

The forecast is a dramatic nosedive for an industry that is worth $10.7 billion, supports 64,000 jobs, and is reeling from citrus greening disease. In October U.S. ag officials were predicting 108 million boxes -- a 3 percent hike from 2013-14. Optimism swelled as the initial report noted "growing conditions were ideal from the start of the citrus bloom in March to the beginning of the 2014-2015 harvest season."

One box of oranges represents 90 pounds. But the individual size of oranges has been a disappointment, contributing to the bleak outlook, said Bill Curtis, a USDA economic research associate in Maitland. “The fruit’s just not growing the way we expected it to,” Curtis said Wednesday.

Valencia oranges were dropping off trees at a 25 percent clip -- high even by new citrus greening standards, Curtis said. Oranges that drop decay and are typically unsalvageable.

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Dr. Elizabeth Steger

“Years ago [before citrus greening] those averages were like 14 or 15 percent,” Curtis said. “Now we’re losing 25 percent of the crop due to fruit just falling off the tree. We actually projected a high droppage because we know the conditions out there. But the fruit was even smaller than we predicted.”

In the past eight years the USDA has overestimated Florida citrus production in October seven times, according to USDA statistics. The margin of error averages roughly 6 percent. The initial forecast for 2013-14 was off the mark by 20 percent.

“There’s nothing abstract about the numbers in this forecast,” said Doug Ackerman, executive director of the state Department of Citrus.

The May estimate represents a 60 percent drop since Florida oranges peaked in 1997-98 at 244 million boxes. The USDA makes an initial estimate in October and refreshes its research each month until the season ends in July.

October’s bubble was slowly leaking until May’s bombshell report. Ag officials said as recently as April that Florida’s iconic fruit was hanging tough at roughly 102 million boxes. In August a private analysis for investors predicted 89 million boxes, according to the Wall Street Journal.

“That should certainly put a floor under the market and keep it there,” a Tampa-based trader said. “What a number.”

The analysis was prepared by Elizabeth Steger, president Citrus Consulting International, an Orlando-based research firm that informs private investors.

“We do a slightly different fruit-per-tree [analysis] than they do,” Curtis said. “They use our tree numbers from the previous season and then they take their own attrition rates for the trees. … That's one thing that's different. I’m not saying one [system] is better than the other but we’ve always had a really good forecast.”

Steger has been off the mark, too – by a bunch. Steger overshot last season’s orange output by 26 million boxes, highlighting a difficult guessing game.

Florida’s orange crop has not fallen beneath 100 million boxes in nearly 50 years. The swing from hopefulness to gloom is also “breaking a psychological barrier,” Tom Spreen, a retired economics professor at the University of Florida, told the Lakeland Ledger.

“It’s like breaking 10,000 on the Dow Jones Industrial Average,” Spreen said. “Whether that means anything [for citrus growers], I’m not enough of a psychologist to know.”

The effect of citrus greening on crop reductions and 525,000 acres of fruit seemed like background noise as state officials tried to absorb the USDA’s new forecast.

“It remains imperative that [citrus] advocates in Tallahassee and in Washington, D.C. continue to provide every form of assistance at their disposal,” Ackerman said.


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