Forecasts of Florida Freeze Heat Up Orange Juice Prices

Orange juice surged Friday to its highest price in almost four years on concern freezing temperatures could reach Florida in the next few days, damaging crops at a time when inventories are low.

“Any time it gets cold at all, the market goes up,” said Rory Dubin, general manager of O.J. Investments in Arcadia, Fla., which owns 1,300 acres of orange groves.

Orange juice for May delivery soared 8.6 cents--or 6.6%--to $1.3775 a pound on the New York Cotton Exchange, the highest price for the active contract since April 23, 1992. March orange juice, which expires Monday, jumped 7 cents to $1.3875 a pound, the highest for the contract closest to expiration since April 2, 1992.

Florida is the nation’s biggest orange producer. According to Weather Services Corp. in Lexington, Mass., temperatures could fall to just above freezing during the next six days.

Sales of frozen concentrated orange juice have been robust. They totaled 76.8 million gallons between the beginning of the year and March 2, up 7.3% from the year before, according to the Florida Citrus Processors Assn. But stockpiles of frozen concentrated orange juice--now 114.6 million gallons--are 17% smaller than last year, according to the Florida Department of Citrus.

“We just came off a year of record sales and low inventories,” Bob Tate, a broker at Dean Witter Reynolds Inc. in Orlando, Fla., said. “Those fundamentals have been supporting the market every day.”

Orange juice prices also got a boost from announcements by small independent processors that they will not press their oranges into juice but will instead sell them in order to cash in on higher prices.