Commodities: The Orange Squeeze

The Arctic cold wave that swept into the South and Southwest this winter has produced some chilly news for U.S. housewives: they are paying more for citrus fruits and juices, and probably will pay more for a long time. Because of the damage to groves and fresh fruit caused by the freakish cold, the price of oranges is already up from 20¢ to 24¢ a pound, and the price of frozen orange juice has jumped from 20¢ to 30¢ a can. If the housewife has cause to complain, the citrus industry’s laments are somewhat muted. For an industry chronically beset by overproduction—and still selling off the remains of last year’s record crop—the freeze was something of a deliverance.

Most U.S. farmers pile up surpluses through higher yields, but citrus growers create their surpluses by overplanting. When California’s postwar population, boom made Los Angeles area orange groves worth $10,000 an acre as housing sites, growers sold off 100,000 acres, then moved north to the San Joaquin Valley or east to Arizona and are planting 125,000 acres more. Florida’s citrus growers, who have been moving southward to escape the frost, have drained thousands of acres once suited only for cattle raising. The result, according to Miami Banker Ellis Clark: “The expansion was getting out of hand. In sheer volume alone, the crop was taxing our ability to move it.”

This winter’s freeze, which struck impartially at both Florida and the California-Arizona area, headed off a vast orange surplus that might have sent prices down and left the industry in poor shape. Florida freezes or cans two-thirds of its orange crop, ships out another 7% as chilled products. California oranges are considered less juicy but better and more attractive to eat; 70% of them are sold as fresh fruit. Despite these differences, both regions share common problems. Citrus farming remains the least mechanized part of all agriculture, and growers are trying to perfect practical picking and sorting machines to cut the high cost of labor. Fearful of potential inroads by such synthetic juices as General Foods’ Tang, they have been experimenting with dried citrus crystals that can be mixed with water to make juice, are now selling them to the Armed Forces. Growers are also turning out a line of citrus byproducts, including paint bases refined from rind oil.

Except for a handful of growers who were wiped out when the frost killed off millions of young trees, the citrus industry still has a ripe future—and will probably continue to expand. Citrus trees begin to yield profitably after five years and bear fruit almost indefinitely, though taxmen write them off in 40 years. The hazards, beyond an occasional frost or round of tree diseases, are small. And the profit, with any kind of effort, is a juicy 10%.’