Market squeeze
For years, the Sunshine State has weathered harsh conditions for growing its famous oranges, as freezes, storms, hurricanes, and plagues have devastated its citrus crops. But, it's Florida’s booming real estate market that’s causing farmers to give up on the orange segment for good.
Last month, Florida overtook New York to become the second most-valuable US housing market at ~$3.81 trillion, with its regions comprising 4 of the top 6 markets that have gained the most in value since the start of the pandemic, including Tampa (+89%) and Miami (+87%). Alongside a surge in residents — Florida had the fastest-growing population of any state last year — rural areas where oranges used to grow are now property hotspots: Hendry County, for example, has lost over 19,000 acres of citrus since 2020, concurrent with a 64% increase in house prices.
Peeling back
Florida’s orange output fell from ~11 million tons in 2003 to 2.38 million tons last year, doubly squeezed by falling acreage and yields. While the deficit has been linked in part to a rise in climate-related disasters — including Hurricane Irma, which caused Florida’s worst crop yield in 70 years — an incurable citrus-greening disease also isn’t helping. Since its detection in 2005, the disease is thought to have reduced Florida’s citrus production by 75%, making grove maintenance increasingly expensive.
This year, stockpiles of US orange juice have shrunk to their lowest level since 1968, causing the price of orange juice futures to triple since early 2022. But, even with prices spiking, using that spare land for condos rather than cartons is looking appealing.
