by Agrimoney.com
It is not only Brazil's coffee producers which are feeling the pinch from a drop in prices of their commodity.
Orange growers in the top producing country are ripping up groves to plant soybeans or sugar cane in face of poor returns, sapped by low prices of fruit and juice, which plunged 4% in New York on Tuesday on data showing a slide in US consumption to an 11-year low.
Disease - notably citrus greening, a bacterial infection which causes yield loss and tree death – encouraged by a reluctance by producers to invest in fertilizers and sprays, is also hurting output.
Sources reported that "many growers did not receive fair prices last year, which resulted in poor crop management", US Department of Agriculture staff in Brasilia said.
"Greening has become more and more a burden to producers."
'Does not pay production costs'
The setbacks have already prompted tree losses running at more than 2m a month from overall citrus groves in Sao Paulo, the top Brazilian orange-growing state, reducing the tree count to 213.7m, according to official data.
About half the losses were attributed to the removal of greening-infected plants.
And a further drop looks on its way, with many long-term contracts between juice processors and orange growers up for renewal, at a time of poor prices, but rising production costs.
"A significant number of growers report that they will abandon the activity, at least partially, if the orange processors do not show interest for their groves during the upcoming crop," the USDA staff said, noting that prospects for growers of the Hamlin variety had in particular been "undermined again".
"Contacts report that some processors have offered R$ 6.80 per box of Hamlin and R$7.00-8.00 per box for the Pera variety, which does not pay production costs roughly estimated at R$8-12 per box by different sources."
Production drops
Nor does Brazil's government appear as enthusiastic to support orange producers as it has been in coffee.
Antonio Andrade, Brazil's agriculture minister, on Tuesday said he would ask the country's monetary policy council to approve R$390m ($175m) to help underpin coffee prices during harvest, in addition to a R$3.16bn ($1.45bn) support package unveiled earlier this month.
The government, which last year spend more than $64m backing orange values, "has not indicated any interest to launch price support programmes for the upcoming [orange] crop", the USDA bureau said.
The bureau forecast Brazil's orange grove area tumbling by 60,000 hectares to 740,000 hectares in the marketing year beginning next month.
Orange output will fall by 19.2% to 16.6m tonnes.
As for orange juice, which swallows up most of the harvest, Brazil's production will decline by 20% to 1.0m tonnes, a bigger drop than that seen in official USDA data, which pegs output at 1.26m tonnes.
Futures tumble
Prices paid to orange producers fell below R$6.00 per 40.8 kilogramme box in the second half of last year, down from levels above R$12 per box in March and April.
Values have been undermined by a tumble in prices of orange juice itself from a record high of 226.95 cents a pound in New York in January last year.
The latest rally, prompted by the spread of greening in Florida, the top US citrus-producing state, which took prices above 150 cents a pound for the first time in more than a year, has foundered this month on soft demand and low concerns over the prospect of a grove-damaging hurricane.
World demand has been hurt both by the world economic crisis, which has prompted consumers to seek cheaper drinks, and a move away on health grounds from beverages seen as having high sugar contents.
New York orange juice prices on Tuesday slumped 4.4% to 134.20 cents a pound, for September delivery, after official data showed US retail sales of juice falling 1.3% to 39.89m gallons (151m litres) in the four weeks to June 8, at a time of growing stockpiles of refrigerated supplies.
That was the weakest consumption figure since January 2002, according to the Florida Department of Citrus.
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