USDA To Pour $20 Million Into Frozen Orange Juice
August 20, 2015 According to an association member notification sent out by Mike Sparks, executive VP/CEO of Florida Citrus Mutual, USDA has announced it will purchase $20 million worth of surplus frozen concentrate orange juice as part of the fiscal 2015 Section 32 bonus purchase program.
Most likely, the USDA purchase will be for 100% Florida orange juice only, although California or Texas orange juice would qualify, Sparks speculated. USDA has made several Section 32 purchases of Florida citrus products over the years.
Florida Citrus Mutual estimates a $20 million purchase would move about 6 million pound solids, which would lower inventory by about one week of supply.
If this all moves before October 1, a 2.5% reduction in supply is anticipated, Sparks noted. This purchase is expected to be worth about $.02 per pound solid on average over the entire orange crop. That would equate to $12 million in Florida citrus farm gate revenue.
Sparks believes the current $20 million OJ purchase is the initial buy in what could be a series of purchases over the next few years to help alleviate inventories.
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