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Citrus Estimate More Optimistic | 03-10-2011

LAKELAND | The U.S. Department of Agriculture added 4 million boxes of oranges onto the 2010-11 Florida citrus crop estimate, but don't expect that to affect the rising price of orange juice.

"We're certainly looking at higher prices through the summer, I'm sure about that," said Tom Spreen, a University of Florida economist and a leading authority on the state's citrus industry.

Crop size is just one factor driving retail prices higher, he said.

Petroleum products, used in packaging, processing and transportation, also accounts for a major portion of OJ retail prices. As anybody who's been to the gas station lately can attest, those prices have rocketed up with the various Middle East revolts.

"I don't know what the magic number is on oil, but it's somewhere north of $100 a barrel. That can choke (the economy) off," Spreen said.

The fuel surcharge levied by trucking companies, which swings with diesel prices, increased from 28 percent to 47 percent in just the past month, said Walt Lincer, vice president of sales and marketing at Florida's Natural Growers in Lake Wales, the third largest U.S. orange juice seller.

"The cost of everything that uses energy has gone up," he said.

Florida's Natural recently raised its wholesale OJ prices 4 percent to 8 percent, in line with the price hike announced earlier this week by Tropicana, the largest domestic OJ seller, Lincer said. Second-ranked Minute Maid announced the same retail price increases following Florida's December freezes.

The average price for OJ products rose to $5.79 a gallon for the month ending Feb. 19, a 6 percent increase from a year earlier, according to the Florida Department of Citrus.

Thursday's USDA report put the projected Florida orange crop at 142 million boxes, a 3 percent increase from its February report. The increase came entirely in the early and mid-season orange crop, now at 70 million boxes, which was 98 percent harvested by the time of the latest survey earlier this month, the report said.

The Valencia orange crop, picked in March through June, remained at 72 million boxes.

The monthly USDA citrus crop reports are based primarily on a count of fruit on the trees in groves statewide. But statisticians adjust the numbers later in the season based on the actual amount of fruit delivered to juice plants and packinghouses.

The USDA held the Florida projected grapefruit crop estimate at 19.6 million boxes and the tangerine crop at 4.4 million boxes. It raised the tangelo crop by 100,000 boxes to 1.1 million boxes, also based on fruit deliveries.

Read the original article from The Ledger.