Orange juice prices have more than doubled since September after Hurricane Matthew blew through orange groves already weakened by a citrus tree-killing bacteria spread by infected insects.
Frozen orange juice futures for January delivery rose to $2.17 a pound on Thursday, compared with a September price of as low as $1.03 a pound.
On Wednesday, the U.S. Department of Agriculture forecast that U.S. orange production through the rest of November will be lower by 10% from the previous year's November count.
Florida alone is expected to produce 72 million boxes of oranges, equal to 3.24 million tons, in November, a 12% drop from last November's 81.6 million-box production. Florida makes up the majority of the total 5.32 million tons of oranges estimated to be produced in the U.S. in November, a year-over-year 10% drop, according to the department's statistics.
"Harvest was lagging well behind last season on all varieties," the Department of Agriculture said on Florida's citrus production so far.
This month's predicted drop in orange production can be attributed to Hurricane Matthew plus the effects of citrus greening, a tree-killing disease which made its first appearance in the U.S. in August of 2005, according to the Florida Department of Agriculture and Consumer Service.
There is no cure for citrus greening, formally referred to as Huanglongbing disease, which is "one of the most serious citrus diseases in the world," the Florida agriculture department said on its website.
On Oct. 4, Hurricane Matthew hit Haiti and eastern Cuba as a category four storm. The hurricane traveled along the coasts of Florida, Georgia, South Carolina and North Carolina, making landfall only once in South Carolina on Oct. 8 as a category one storm, according to weather.com.
In Haiti, 546 people were confirmed to have died directly from Hurricane Matthew. In the U.S., Matthew can be either directly or indirectly responsible for 49 deaths and between $4 billion to $6 billion worth of damages.
Shares of PepsiCo (PEP), owner of juice maker Tropicana Products, dropped $4.00 on Thursday, equal to 3.73%, to $103.25.
The Department of Agriculture forecast Florida frozen concentrated orange juice yield to reach 1.47 gallons per box in November, a 1% decrease from October's yield but a 4% year-over-year increase from 1.41 gallons per box.
Matthew's winds may also have helped spread the citrus greening disease, leading to even fewer oranges in the future. Sometimes a tree with Citrus Greening can survive a few years before dying, but there is no way to save it once infected.
November's outlook for orange production is still higher than the total fruit count reported in October, when Hurricane Matthew hit. Florida's November production is estimated to rise 3% from the previous month and total U.S. orange production is expected to be up 2% from October.