Prices at the grocery store are up more than 10% from last year
By Hardika Singh and Kirk Maltais of The WSJ.
"Orange juice prices have been climbing as citrus groves have faced a spreading greening disease and extreme weather. [those two factors cause supply to shift to the left, raising prices] Prices for frozen concentrate orange-juice futures have more than tripled since late 2021 and emerged as one of this year’s top-performing commodities, with prices setting records week after week. On Friday, they jumped to a fresh record high of $3.91 a pound, up from $2.11 last October, according to FactSet.
In grocery stores, a gallon of orange juice on average cost $9.18 during the four-week period ending Oct. 7, up more than 10% from the same time last year, according to data from the Florida Department of Citrus and Nielsen.
Analysts say rising prices could drive away shoppers, deepening the yearslong slide in orange juice demand [this is not a decrease in demand-the demand line is not moving-it is a decrease in quantity demanded] as Americans reach for a growing variety of alternatives in the beverage aisle, including those with less sugar.
This year, orange production from the Sunshine State is expected to increase from 2022’s hurricane-marred output [another decrease in supply or leftward shift of the supply line] but is still down more than 50% from two years ago, according to the Agriculture Department. Brazil, the world’s largest orange producer and the source for roughly 70% of the world’s orange juice, has also been hit by the citrus-greening disease [another decrease in supply or leftward shift of the supply line] and won’t be able to fill much of the supply gap, analysts said."
"In Florida, farmers say trees are slowly recovering from Hurricane Ian’s devastation, but that there are no signs of relief from the disease, which can render fruit from infected trees bitter and impossible to use for juice."
"Many Florida farmers have left the business, Johnson said, with some pivoting to growing other fruits or raising cattle." [when the price of good A falls, supply of good B rises, if firms can produce more than one good]
"Higher labor costs are also hurting bottom lines" [another decrease in supply or leftward shift of the supply line]
Related posts on supply and demand:
Apartment Rents Fall as Crush of New Supply Hits Market (2023)
Egg Prices Surge to Records as Bird Flu Hits Poultry Flocks (2022)
How Supply And Demand Have Affected Beef Prices Recently (2017)Is There A Booze Shortage? (2022)
Car makers face ‘chipageddon’ (2021)
Does the U.S. have a firefighter shortage (2021)
There is no truck driver shortage in the US (2021)
Is there a shortage of homes? (2020)
Why honey prices have climbed about 25% since 2013 (2019-This post is featured in Introduction to Microeconomics by Luís Cabral. He is chair of the economics department at New York University.)
Is there really a shortage of construction workers (2019)
Was there really a shortage of meatless burgers? (2019)
Is There A Christmas Tree Shortage? (2017)
Is There Really A Honey Bee Shortage? (2013)
Will There Be A Pumpkin Shortage This Year? (2011)
Introduction to Microeconomics by Luís Cabral
No comments:
Post a Comment