Along with the run-up in prices for grains there are also concerns about the size of the orange crop in Florida. Almost all of the oranges grown there are for making juice.
Dec. was the coldest month on record for Florida's citrus growing areas according to the following article:
Josephs, Leslie, 2011. Chill squeezes orange supply. Barron's, Jan. 8.
Unlike other foods, the orange juice market appears to be more elastic. From the article:
"Orange-juice sales fell 10.5% in the Oct. 3 to Nov. 27 period,compared with the level a year earlier. In the period, prices rose 5.5%, with a gallon of orange juice costing $5.68, according to Nielsen data published by the Florida Department of Citrus. 'If prices continue to rise, demand would continue to decline,' says Boyd Cruel, a senior analyst at Chicago's Vision Financial Markets."
The 2010 - 2011 orange crop is forecast to be 143 million boxes as compared to last years crop of 134 million boxes, which was one of the lowest during the past 20 years.
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