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California Freeze Puts Squeeze on Citrus Crop
Wholesale distributor Mario Alvarez Jr. talks on the phone to a representative at the Los Angeles Produce Market.
(By Ric Francis -- Associated Press)
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Because citrus trees produce fruit only once a year, the frigid conditions cut the harvest short. The peak market for Florida Valencia oranges begins in April. Navel oranges from Australia and South Africa don't start arriving until summer.
As a result, California citrus growers are hoping for double the return on the fruit they manage to salvage, charging more and shipping some fruit with a less than perfect complexion. How much of that cost will be passed on to consumers isn't yet clear.
Harris Teeter spokeswoman Jennifer Panetta said the supermarket chain's suppliers have already doubled prices for citrus fruits. But before passing those costs onto consumers, "we're going to see if we can get citrus from other parts of the world," she said.
Sodexho, the food and facilities management giant based in Gaithersburg, may end up absorbing some of the increased costs for fruits and vegetables. Cafeteria prices at universities, for example, probably won't go up because of the freeze, said Dexter Tompkins, Sodexho's director of supply management for produce.
"We still have to have a salad bar and offer lettuce and tomatoes on sandwiches," he said, adding, "Maybe we won't offer orange segments anymore" and instead offer pineapple or other alternatives.
In fact, growers of other fruits may be in for a small windfall due to the coming orange shortage. H. Dave Carlson, president of the Washington state apple commission, said since the freeze, apple growers in his state have received more orders from distributors. He expects grocery store prices on Washington apples to inch up 10 to 15 cents a pound.
But any upward pressure on prices for fruits and vegetables not directly affected by the freeze is likely to be limited, Wells Fargo economist Michael Swanson said.
"These are very discrete seasonal markets," he said.
Just as banana prices behave differently than orange prices, consumers should not expect to pay more for orange juice, which is made primarily with oranges from Florida, not California.
The freeze has prompted speculators to drive up the price of frozen-concentrated orange-juice futures. But agricultural economists say investors need to bone up on their geography.
"I would be more afraid of a freeze in Brazil," another major supplier of juicing oranges, Swanson said. "It's not a logical response."
Speculators "are probably not jumping on the right horse here," University of Florida economist Tom Spreen said.
If you can't bear to give up those juicy oranges just yet, you might want to start shopping now. Any fruit in stores up until now was picked before the freeze. On Wednesday, prices at local stores such as Whole Foods, Giant and Safeway reflected that, with a medium-sized navel orange costing an average of 50 cents.
If you're shopping later in the week, when oranges that survived the freeze start arriving, Swanson says you might try being less picky. "The quality of the fruit is not affected, but the cosmetic appeal might be," he said.
