When climate disasters put the squeeze on orange crops, manufacturers, foodservice operators and consumers may need to adjust their expectations.

Disease and extreme weather have taken a toll on crops, limiting production and pushing prices higher.

According to the USDA, natural disasters and disease have cut Florida orange production by an estimated 92% since the 2003-2004 season*.

This year alone, price increases are up over 20% .** The main drivers of these price increases stem from the rising costs of the commodity (orange juice/orange juice concentrate), packaging, freight, labor and overhead.

Orange crops in distress and yields are declining

Orange juice prices are experiencing significant volatility due to several industry-wide factors across the globe:

• Crop decline in Brazil: Brazil, the world's leading producer of orange juice, has reported a 24% decrease in crop yield for the 2024/25 season compared to the previous year.***
• Uncertainty in Mexico: The 2023/24 orange crop in Mexico has been harvested, and no information is available yet regarding the upcoming season's yield. This lack of information adds to market uncertainty.

How does Entegra work with suppliers to bring solutions to operators in this category?

With its team of supply chain and procurement experts, Entegra works to mitigate the impact of price increases.

1. Mix of different suppliers to help you make the right choice for your business. We can help you secure the inventory you need to meet demand, whether that’s through product substitutions from the same supplier or working with a new one.
2. Strategic procurement: By strategically securing orange juice at a low point in the market, we were able to offer lower prices for an extended period.

“Working every day with Entegra’s Supplier Partners is a privilege and an honor,” said Tracey Ranallo, Vice President of Business Performance and Supplier Engagement. “Our partners keep Entegra clients top of mind, and they come to us with solutions to help reduce the risk of operational disruptions.

“Entegra, with the support of our supplier partners, do this type of work on behalf of clients so our clients can stay focused on the consumers they are servicing each day. It’s one of the many benefits our clients receive when partnering with Entegra.”

Entegra’s supply chain and economic experts work together to provide you with regular commodity pricing and inflation updates. Our Supply Management team has also recently published the Cost Outlook report to prepare you to make the best purchasing decisions for your hospitality-driven business.

Contact us to get more information about putting Entegra’s purchasing power to work for you.

* https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=109051

** https://www.investing.com/commodities/orange-juice

*** According to Fundecitrus, an association maintained by citrus growers and juice manufacturers from the state of São Paulo, Brazil.

August 05, 2024