Orange-juice futures jumped the most in 14 months after the U.S. government cut its forecast of the crop in Florida, the world’s second-largest citrus grower.
Farmers in the state will produce 139 million boxes of oranges in the harvest that runs through June, down from 141 million projected in January and last year’s crop of 146.6 million, the U.S. Department of Agriculture said today in a report. Analysts expected 139.6 million on average in a Bloomberg survey. The University of Florida has said that citrus greening, a crop disease, has spread to 32 counties since 2005, damaging fruit and killing trees.
“The crop’s falling apart,” Shawn Hackett, the president of Hackett Financial Advisors Inc in Boynton Beach, Florida, said in a telephone interview before the report. “The question is whether the citrus-greening effect is an odd year or the start of a long tail. It’s been a pretty normal winter, I’d hate to see when winter’s bad.”
Orange juice for May delivery rose 6.9 percent to settle at $1.3315 a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest gain for a most-active contract since Jan. 10, 2012. Trading was 67 percent higher than the 100-day average. Earlier, the price rose by the exchange limit of 10 cents to $1.3455, the highest since Dec. 26.
Citrus greening, a bacterial disease first found in the state in 2005, starves a tree of nutrients, causing the fruit to drop prematurely. Oranges are often smaller, especially in younger trees.
The rate of fruit spoiling in the Valencia variety, which is forecast to account for 52 percent of the Florida crop, “has increased sharply in the past two months,” the USDA said. According to the University of Florida study, the disease has caused $4.5 billion in economic damage.
Temperatures were normal to 3 degrees Fahrenheit above average across the state’s citrus belt in February, according to MDA Information Systems Inc. in Gaithersburg, Maryland. Precipitation fell to 28 percent of the February average in some areas, while staying close to normal in others, Donald Keeney, a senior meteorologist at MDA, said in an e-mail.
“Rainfall was sparse, worsening the drought conditions in nearly all of the citrus-producing regions,” the USDA said in the report.
Yields in Florida will average 1.61 gallons per box, down from 1.63 gallons a year earlier, the USDA said.
A box weighs 90 pounds, or 41 kilograms. Brazil is the biggest orange producer.
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