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Hurricane Ian could cause further increases in food prices

2022-09-29T14:36:30.993Z

Hurricane Ian is the latest natural disaster to affect food prices. Orange juice and fertilizers, among those affected.



This is how Tampa Bay was after the passage of Hurricane Ian 1:35

New York (CNN Business) --

Hurricane Ian is the latest natural disaster to hit food prices.

The storm hitting Florida is already forcing orange juice futures higher, and could soon reduce the nation's fertilizer supply, which could have a far-reaching impact.

Contract prices for frozen orange juice from concentrate hit about $1.92 per pound early on Wednesday, up more than 5% from Tuesday, before moderating slightly.

Florida is one of the top producers of citrus, including oranges and grapefruit.

At least 75% of Florida's citrus belt is under threat of heavy flooding rains in the next 36 hours, according to satellite imagery provider Maxar Technologies.

Maxar's WeatherDesk estimates that at least one-third of groves may be subject to wind damage, particularly in the northwestern part of the citrus belt.

  • Hurricane Ian Florida Breaking Live: Track, News & Damage

Orange juice futures are up almost 30% so far this year.

And the timing of the storm is tough for Florida farmers as citrus crops head into harvest season.

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"There will be quite a bit of fruit drop and fruit loss from the trees," Maxar said.

Citrus production was already under significant pressure even before Hurricane Ian.

In July, the US Department of Agriculture estimated that US orange production would fall 13% in 2021/2022 to the lowest level in 55 years due to drought in California and greening of the citrus in Florida.

This is what Ian looks like inside: storm chaser films the hurricane in Florida 0:53

Citrus greening is a disease that causes trees to produce less and smaller fruit.

As a consequence, juice producers have to use more oranges per bottle, which increases their costs and drives up prices for consumers.

Prices for oranges and mandarins increased 14.4% in the year to August.

The price of juices and other non-alcoholic beverages rose by 13.1% in that period.

Fertilizer supply could be reduced

Meanwhile, one of the major producers of phosphates used in fertilizers is based in Tampa, where the storm is expected to hit hard.

The producer, Mosaic, says it supplies half of all the granular phosphate sold to North American farmers.

"In anticipation of the substantial impact of Hurricane Ian, we have taken appropriate steps to protect our people, mines, plants, port facilities and administrative offices," William Barksdale, Mosaic's director of corporate communications, said in the statement.

Mosaic said employees at its Tampa corporate office and elsewhere are working remotely.

The company said it is continuing to complete preparations at its phosphate mining and production facilities in Florida, as well as Louisiana, adding that those preparations began last week.

When farmers spend more on fertilizer, they have to raise the prices of the crops they produce, or cut back and reduce supply.

In any case, the higher prices are passed on to consumers.

Fast-motion video shows Hurricane Ian flooding streets in Fort Myers 0:53

Extreme weather is one of the main factors contributing to the massive increase in prices: droughts forced US farmers to sell their herds and destroy their own crops.

In recent years, floods have also destroyed crops and killed livestock.

The storm comes at a time when consumers are already seeing record increases in food prices.

The cost of food this year has soared 11.4% through August, the biggest annual increase since May 1979, according to the Bureau of Labor Statistics.

Grocery prices rose 13.5% and restaurant menu prices rose 8% in that period.

CNN's Chris Isidore and Vanessa Yurkevich contributed to this report.

Hurricane Ian

Source: cnnespanol

All news articles on 2022-09-29

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