Prices leave bitter taste
Tyler Fisher has a simple breakfast ritual. Toast with butter. A glass of orange juice and no coffee. He’s then prepared to face the 60 to 100 miles of daily driving that comes with his job.
The Costa Mesa resident is used to paying high prices to fuel his car. Now he’s paying more to fuel himself -- with orange juice.
The average retail price of orange juice -- from fresh to frozen -- has increased in each of the last six months. As of Feb. 17, it was $5.76 a gallon, 24% higher than a year earlier. Prices are expected to rise even more this year.
Even smoothie lovers are paying more. Jamba Juice charges an extra 25 cents for smoothies and juice blends with orange juice, and an extra 35 cents for straight orange juice.
The chain said the charges would remain in place “until orange supplies are once again plentiful.”
Jamba refers to the extra fee as a “brrr charge,” which it added in January after a freeze in California’s orange growing regions destroyed much of the state’s crop of fresh oranges.
The higher juice prices have put a crimp in Fisher’s breakfast. “I have a certain price that I like to spend and when it goes over, sometimes I don’t,” said Fisher, a medical technology consultant.
Florida’s citrus orchards have been ravaged by a series of hurricanes and disease in recent years, which have pushed the state’s harvest to its lowest level in 17 years. Florida accounts for 70% of the orange juice that Americans drink.
Right now, Fisher is tanking up with juice he reconstitutes from frozen concentrate. A 12-ounce container of Minute Maid sells for $2 in the Ralphs on Pacific Coast Highway in Long Beach where Fisher shopped this week.
“I don’t like going above $1.50,” he said.
But even $2 is a deal compared with the price of fresh and not-from-concentrate juice. Ralphs wants $7.99 for a half gallon of Odawalla flash-pasteurized juice. Two cartons of Minute Maid from concentrate or Tropicana not-from-concentrate can be had for $7.
“It used to be two cartons for $5 on sales and now it is two for $6 or $7,” said Diana Bakken of Long Beach. The increases haven’t stopped Bakken from buying juice because it is just a once-a-week treat, served with Sunday breakfast for her family of three, she said.
Americans buy about $3 billion worth of orange juice annually from grocery stores and other mass retailers, according to market research firm ACNielsen, which also provides the average price data.
That’s down by more than 10% from four years ago.
Prices are expected to continue to climb, said Bob Norberg, deputy executive director of the Florida Department of Citrus, a state marketing and regulatory agency.
Both PepsiCo Inc., which owns the Tropicana brand, and Coca-Cola Co., which owns the Minute Maid brand, increased prices in late 2006 and January. The two companies control nearly two-thirds of the retail orange juice market. “Prices still have some upward momentum,” Norberg said.
What consumers are seeing in stores now is a catch-up with wholesale price increases late last year and in January, and a reduction in the discounts juice companies offer grocers to put their products on special, Norberg said.
Tropicana raised its prices by 4% to 8% in January and slashed its discounts to grocers. Minute Maid’s prices jumped 9% to 11% over several months and it also slashed discounts.
Another round of increases wouldn’t be a surprise, Norberg said, given tight global supplies. About 25% of U.S. supplies are imported. California, the largest producer of fresh oranges, is only a small player in the juice business.
Unless you own a tree, squeezing fresh oranges won’t bring much relief from the high prices. They’re going up too. Because of the freeze, retail orange prices in Southern California have jumped from about 60 cents a pound in mid-December to $1 a pound or more this week.
According to a U.S. Department of Agriculture report last week, Florida will produce 132 million boxes of oranges this season. That’s down from 147.7 million boxes a year earlier and about 220 million boxes before hurricanes ripped through Florida groves in 2004 and 2005.
A large harvest couldn’t come soon enough for Northridge retirees Joseph and Sylvia Goldfarb. “I was in Trader Joe’s a couple weeks ago and paid $1.99 for a carton, but when I went back a couple of days ago, it was $2.99,” Joseph Goldfarb said.
He bought the juice despite the 50% increase because he and Sylvia have a glass every morning.
Explains Sylvia Goldfab: “We’ve done that since we were kids.”