Prices to Rise as Cold Curtails Orange, Vegetable Harvests
By Annys Shin
Washington Post Staff Writer
Saturday, January 20, 2007
Take a big bite of that juicy navel orange. It may be the last one you enjoy for a while.
More than a week of icy temperatures in California damaged an estimated $500 million or more of fruit and vegetable crops. With another dip in the mercury predicted for early next week, the worst freeze in California in eight years is not over. And consumers nationwide are likely to see its effects for weeks and even months on their grocery bills.
"Consumers can expect to see higher prices on produce," Giant Food spokesman Barry F. Scher said.
The only question is how much higher. Growers, retailers, economists and government officials say they will not know that until the cold spell ends and they can finish assessing the damage.
"Everything is a guess at this point," said Claire Smith, a spokeswoman for Sunkist Growers, a cooperative of 6,000 California and Arizona citrus growers.
Prices for navel oranges may begin rising as early as next week and might not go down until late spring, said Joel Nelsen, president of California Citrus Mutual, which represents 2,000 citrus growers.
California growers do know they will be shipping fewer oranges, avocados, strawberries, artichokes, lettuce, broccoli, cabbage, cauliflower and celery. They expect, however, that the supply of strawberries could bounce back quickly. Plants that were not damaged by the cold temperatures should be able to produce more fruit in another four to six weeks, said Peggy Dillon of the California Strawberry Commission.
Artichoke farmers are hopeful that freeze-damaged plants will yield another harvest in two months, said Doug Mosebar, president of the California Farm Bureau Federation. And lettuce is grown year-round in different parts of California and Arizona, so any interruption in production is likely to be temporary.
Retailers may also be able to spare consumers large spikes in the prices of some commodities by turning to other domestic and foreign sources -- Mexico for avocados, Florida for Valencia oranges and grapefruit.
"Giant, like every other retailer, will be looking for alternatives if we are unable to purchase from our regular vendors," Scher said.
The disruption in the supply of California oranges, however, will be harder to contain, economists and industry leaders predicted.
California is the nation's top producer of table citrus and about three-quarters of the annual crop was still on trees when the freeze set in during the wee hours of Jan. 12, turning the insides of much of the crop to mush.
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.
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