Florida's struggling orange growers brace for Irma

Hurricane Irma battering Caribbean islands
Hurricane Irma battering Caribbean islands

The Florida citrus industry was already in big trouble even before Hurricane Irma started closing in.
Now experts are worried that the storm could be the final straw that tips many growers into bankruptcy.

The problem until now has not been storms but a disease, known as citrus greening. It's spread by an insect, and leaves the fruit green, bitter and unusable. As a result, Florida orange production has declined by about 50% in just the last five years.

"The citrus industry here is fighting for its very existence," said Lisa Lochridge, spokeswoman for the Florida Fruit & Vegetable Association. "This is the last thing we need."

Related: Models put Hurricane Irma near Florida this weekend

Even with that reduced production, the state's citrus industry employs more than 45,000 people and generates more than $8 billion in total sales, according to state data. If Irma does strike Florida's orchards, it will be an economic disaster for the already struggling industry said Tom Spreen, professor emeritus at the University of Florida.

"If this goes up the peninsula the way some forecasts project, it will do a tremendous amount of damage," said Spreen. "I don't want to get too dramatic and say this will be the end of Florida's citrus industry, but it'd be a big blow."

Related: Hurricane Irma isn't what Puerto Rico needs right now

Meanwhile, prices have climbed steadily for orange juice that's not made from concentrate, to about $7.68 a gallon, up from $5.57 15 years ago, according to statistics from the Florida Department of Citrus.

"The prices have gone up, and it's helped, but at the same time last year many growers were not profitable," said Spreen. "The higher prices did not compensate for the lost production.

Florida's crops are primarily used to produce not-from-concentrate juice, whereas juice made from concentrate is mostly made with oranges imported from Brazil. Growers in California and Texas grow more of the fresh fruit sold directly to consumers, rather than for juice.

Related: Cruises canceled as Hurricane Irma menaces Caribbean

Florida's orange groves haven't had a direct hit since a series of hurricanes came through the state in 2004 and 2005. This time, the orange industry could escape damage if Irma just hits the southern tip of the state and the Florida Keys. But some forecasts expect the storm to turn north and hit many of the groves in central Florida.

If that happens, the lost orange juice production will likely be made up by growers in Mexico and Brazil.

The price of orange juice futures, which are a contract used to insure supplies to wholesale buyers, have been climbing for several days. But Spreen points out that rise doesn't make much sense since those futures are for oranges used to make frozen concentrate juice, rather than the not-from-concentrate juice made from Florida oranges.

"Florida is less than 5% of world supply of [orange juice concentrate]," Spreen said. "If every orange in Florida fell on ground, it's not going to affect the supply very much. It's more psychological type of thing. Traders have to get excited about something."

Personal Finance


CNNMoney Sponsors