November 6, 2009 A Postcard from the Americas U.S.: Orange Juice Demand Rises in Swine Flu Season

Florida orange juice exports are up 24.3% on a season-to-date basis through October 3, 2009.

As winter creeps in through the U.S., concerns are being raised about another possible deadly outbreak of swine flu. Travel companies shiver at the prospect, airlines fear a massive drop in passenger traffic, and pharmaceutical companies are hoping to be boosted by the expected surge in demand for swine flu vaccines. The possible pandemic is being endlessly debated, with reams of newspaper print and online space already devoted to the topic. Yet beyond this, swine flu is impacting what seems an unlikely sector: orange juice.

With U.S. consumers guzzling down orange juice in copious amounts, hoping to keep swine flu at bay, the orange juice market finally has some reason to smile. Fear is of some value, it appears. With the flu season still in the incubation stage, demand for vitamin C-rich beverages and food is only expected to rise when winter sets in completely. And orange juice is selling. Retail sales of orange juice have just recorded their sixth consecutive month of increase this year. And the price of a pound of frozen, concentrated orange juice is up to $1.07 recently on the U.S, ICE Futures exchange, having already gained around 73% this year.

The rise on the Futures Exchange was triggered by an October 9th report by the U.S. Agriculture Department, forecasting that Florida, which is the second-biggest producer of oranges after Brazil, would see a drop of around 16% in crop output this year. The last time orange juice prices rose was when a series of hurricanes damaged crops, pushing prices up to a record $2.095 per pound back in March 2007. That also led orange juice manufacturers to hike retail prices for their products.

Concerns have been raised on the future of this $10 billion industry in Florida, which has been ravaged by the curiously-named citrus greening disease or yellow dragon disease, which has devastated orange trees even in Brazil. With no cure as of yet, these diseases, have significantly reduced citrus production in Florida, causing entire trees to wither and die within a few years of being infected.

But ironically, swine flu, another disease, has emerged as an unexpected savior for a struggling Florida. And the Florida Juice Industry is cashing in as much as it can. “Support your immune system,” their website proclaims in an obvious reference to the swine flu. During these times, when companies are hard pressed to drive up demand in a recessionary market, anything that sells, no matter the reason, helps. Oranges and swine flu may be an odd combination, but this recession has taught us, if nothing else, that unusual alliances may just be what the doctor has ordered.