Oranges Further Squeeze Florida

I've been following Florida throughout the recession, partially because its economy is a fascinating example of a disaster, and partially because I've a native of the state with most of my family still down there. If you know anything about Florida, then you probably know that oranges are a pretty big deal down there. Oranges make up one of its biggest industries, so a great orange season could be one small bit of hope for the state, still ailing from its real estate market collapse. Unfortunately, the news today indicates that the orange crop won't help the troubled state. In fact, it will make matters worse.

So just how significant is Florida's orange industry? According to "quick facts" on stateofflorida.com:

Florida produces about 75% of the U.S. oranges and accounts for about 40% of the world's orange juice supply.

Clearly, Florida likes to see its orange crops do well. So they won't be happy to hear today's news. Reuters reports:

Drought, freezing weather and a fatal disease have savaged Florida's $9 billion citrus industry, causing output to drop to its lowest level in three years, the government and industry analysts said Friday.


The U.S. Agriculture Department forecast Florida's 2009/10 citrus crop to fall 16 percent from last season to 136 million (90-lb) boxes, the second lowest over the last decade. Only the 2006/07 crop at 128.9 million boxes came in lower.

Oh Florida. It's like someone is out to get you.

As bad as this news sounds, I don't know how large an impact it will really have on the overall economy. That $9 billion is something of a drop in the bucket in Florida's overall GDP -- $744 billion in 2008. So that contribution is a little over 1%.

Of course, economics is like a game of dominos. A worse orange crop will result in less revenue for those associated with the industry, which will lead to less spending, affecting a variety of other industries. So this 16% decline in oranges is not exactly in isolation. Still, I think it will barely be felt in comparison to the havoc the real estate market is causing down there.

If anything, I think the real bad news is more that the orange industry won't help matters. A good year for oranges might have meant at least a little relief for Floridians. More revenue might have spurred some economic growth. Unfortunately, that's not what Mother Nature had in mind.