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Orange prices rise as supplies plunge

Wholesale costs of some vegetables jump. The governor declares a state of emergency for the 10 counties hardest hit by the cold snap.

January 17, 2007|Sharon Bernstein and Jerry Hirsch | Times Staff Writers

With half of California's navel orange crop destroyed by a cold snap, the wholesale price of the fruit soared Tuesday as agriculture officials warned that consumers will soon be paying more for other produce such as avocados, carrots and lettuce.

Gov. Arnold Schwarzenegger declared a state of emergency Tuesday in the 10 counties hardest hit -- even as state officials predicted that the frigid temperatures would continue in many agriculture zones through the weekend. Forecasters predict lows 7 to 10 degrees below normal this week, raising the specter of more crop damage.

In the strongest sign that the freeze will hurt consumers, navel orange prices doubled at the wholesale level, with the highest grade, large-sized navels increasing from up to $17 per bushel last week to about $35 Tuesday, according to the U.S. Department of Agriculture.

California is the nation's dominant source of navels, and unlike other crops, little foreign supply is available.

"Expect retail prices to triple," said Todd Steele, owner of Royal Vista Marketing, a citrus brokerage in Visalia, Calif. The price spike is expected to hit supermarkets in the next two weeks, when the current inventory dwindles.

On Tuesday, navels in Southern California sold for 50 cents apiece at Ralphs and $1 a pound at Vons.

Wholesale prices for other produce have also risen. As recently as Friday, California-grown broccoli was wholesaling for $16 to $18 a carton in Los Angeles, according to the Department of Agriculture. On Tuesday, the same cartons sold for $20 to $24. Iceberg lettuce that sold for $11 to $12.50 on Friday was selling for $16 to $20 a carton Tuesday.

In Fresno County, in the heart of the hard-hit San Joaquin Valley, agricultural officials fear that the severe damage probably will go well beyond oranges, to the broccoli, beet, carrot and lettuce crops that have just begun to grow for winter harvest, as well as tender ornamental plants at the region's nursery suppliers.

"We will have damage to the vegetable crops," said Dennis Plann, deputy agricultural commissioner for Fresno County. "We had a temperature of 19 degrees in the Huron area [Tuesday] morning."

To meet the national need for fresh winter fruit and vegetables, distributors said, they have begun negotiations with growers in Chile and other food-exporting countries. But though such imports mean that American grocery stores and restaurants will remain stocked, prices will still be affected, and profits will go south of the border instead of to the Central Valley and other affected parts of California.

"We sent a buyer to Chile on Monday, and I'm on my way to Mexico tomorrow," said Brian Edmunds, vice president of Fillmore-Piru Citrus Exchange, standing on the floor of the packing facility in the Ventura County community of Piru. On Tuesday, after several nights of freezing temperatures, the packinghouse was mostly quiet.

Only a few sorters were working on what was left of fruit picked before the cold snap hit last week.

The freeze has left the nation with about 14 million 40-pound cartons of California navel oranges -- less than half of what America would eat between now and next season, said James Sherwood, vice president of Bee Sweet Citrus in Fowler, Calif.

That will leave consumers with fewer oranges and higher prices.

Prices also have doubled or even tripled at the wholesale level, Sherwood and others said. He said prices rose to $32 on Tuesday from $16 for a carton of 72 "fancy" grade navels.

Records from the Department of Agriculture show an even greater jump, from about $16-$17 a carton to about $35.

And Steele said his company was selling oranges for $28 that went for $9 two weeks ago.

Distributors said they already were hearing of hikes at the retail level, though several grocers including Ralphs denied that.

"Our produce buyers are looking for alternative sources within the state or the country and then even abroad to make sure we have adequate supply," said Terry O'Neill, a spokesman for Ralphs Grocery Co.

At the Vons in Los Alamitos, Kristine Chavez, a mother of two, said she had not previously paid much attention to orange prices but now will start looking, because she expects them to go up.

Chavez said she often buys oranges as snacks for her children during their sporting events.

"It's a good thing it's not soccer season," she said.

In addition to shortening supply at home, the freeze will just about obliterate distributors' ability to export fruit, Sherwood said.

In a typical year California would send 9 million to 10 million cartons of fruit abroad at this point in the season.

"What would have been exported will now stay here, but will sell at much higher prices," Sherwood said.

California supplies 85% to 90% of the nation's fresh domestic navels and about the same percentage of fresh Valencias, said Sunkist Growers, the large citrus cooperative.

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