What Will Happen If a Major Freeze Destroys a Large Number of the Orange Trees in Florida?

A Florida orange grove

As of 2008, nearly 500,000 acres of Florida farmland were devoted to the commercial growth of multiple varieties of Florida oranges, producing 170.2 million boxes of the fruit. A major freeze would drastically increase orange prices for consumers.

Time Frame

Florida citrus is damaged when the temperature falls below 28 degrees Fahrenheit for a period of three or more hours. When damage occurs -- and even before actual injury -- commodities traders "gamble" on the expected future availability of oranges in the marketplace. Even a rumor of possible bad weather in the state typically encourages the rise of commodities futures.

Commodity Futures

The price of Florida oranges distributed across the world depends on the level of frost damage the crop sustains annually. "The weather premium, as it is known among commodity traders, is the premium priced into agricultural commodities-futures contracts in anticipation of damaging weather," reports a 2010 article in The Wall Street Journal.

Considerations

The University of Florida Institute of Food and Agricultural Sciences indicates that Florida has avoided major, freeze-related crop catastrophe since a significant cold front devastated orange groves over the Christmas holiday in 1989. The university says that cold tolerance in citrus is influenced by rootstock, fruit load and the temperature before a freeze.

References

• Wall Street Journal: Orange-Juice Traders Brace for Another Wild Session
• University of Florida Institute of Food and Agricultural Sciences: Your Florida Dooryard Citrus Guide