Market Update - January 2013

 

Tuesday, 01 January 2013 23:15

The United States Department of Agriculture (USDA) issued an updated forecast for the 2012-2013 citrus crop. The Florida crop is estimated to be 142 million boxes of oranges for the upcoming season. This is approximately an 8% reduction from the original forecast of 154 million boxes in October. This projected number is 3% lower than last season’s final production. Some industry experts are anticipating this forecast number to be reduced further in coming months. Florida is currently harvesting the first season citrus crop. Florida’s first season is projected to end in late February. Brazil has reached the end of their harvest season, and shipments from Brazil are expected to decrease. Raw material costs are increasing, and this updated USDA crop information will undoubtedly increase demand on current citrus supplies.

It also must be noted that cold weather risk can still play a role in the citrus crop. Companies should manage their inventories very carefully. The USDA forecasts have been historically reliable because of their independence from the industry. Estimates have differed from final utilization by less than 5% on average, in non-hurricane affected years. The National Agricultural Statistics Service (a USDA division) updates these numbers monthly.

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