(Updates with closing price in fifth paragraph.)
Dec. 10 (Bloomberg) -- The orange crop in Florida will be 3.2 percent smaller than forecast last month as the amount of some fruit varieties dropping from trees prematurely increases to the highest in five decades, the U.S. government said.
In the 12 months that started Oct. 1, output in Florida, the world’s second-biggest citrus producer, will be 121 million boxes, the lowest since 1990, the Department of Agriculture said today in a report. Orange-juice futures in New York rose as much as 2 percent.
Yesterday, prices entered a bull market because of dry weather and citrus greening, a disease that starves trees of nutrients, causing fruit to shrink and drop early. The price climbed 2.3 percent to $1.412 a pound, up 20 percent from the settlement of $1.175 on Oct. 22.
“Production is losing ground in the battle against greening disease, and losses are happening faster than the drop in demand,” tightening inventories, Judy Ganes-Chase, the president of J. Ganes Consulting in Panama City, Panama, said today in a report.
Orange-juice futures for January delivery rose 1.1 percent to settle at $1.428 at 1:40 p.m. on ICE Futures U.S. This year, the price has climbed 22 percent, the third-biggest gain among 19 raw materials in the Thomson Reuters/Jefferies CRB Index.
Some types of fruit, including early and mid-season varieties, were projected to drop prematurely from trees at the highest level since 1961, the USDA said. “Rainfall was scattered and generally light as the dry season continued. The abnormally dry conditions observed in the citrus-producing regions continued to spread, leaving only the western area completely drought free.”
Nine analysts in a Bloomberg survey forecast Florida output at 125 million boxes on average, unchanged from a month earlier. Last season, the crop was 133.6 million boxes.
Yields for frozen concentrated orange juice will average 1.61 gallons per box, up from 1.59 gallons a year earlier, the USDA said.
A box weighs 90 pounds, or 41 kilograms. Brazil is the top citrus grower. Among CRB components, natural gas leads gains this year, followed by cocoa.
--Editors: Patrick McKiernan, Thomas Galatola