Perishables - Florida hurricanes affect growers, traders, shipping lines

By: | at 08:00 PM | Channel(s): Liner Shipping  

Impact on citrus will be felt for some time
By Peter A. Buxbaum, AJOT
The series of hurricanes that hit Florida recently devastated that state’s citrus crop and its reverberations are likely to be felt for some time to come. Shipments of fresh grapefruits will be affected immediately; orange juice concentrate shipments may not be impacted until next year. Meanwhile, shipping lines have to figure out what to do with refrigerated containers they normally position to Florida ports this time of the year.
Not all of the news is bad, however. Some ships were delayed getting into port by a matter of days, but once they docked they were unloaded, and their goods were distributed promptly. Shortages on supermarket shelves were occasioned primarily by buying sprees in advance of the storms. Supermarket chains saw to it that the shelves were replenished from out-of-state distribution centers.
“A good deal of the grapefruit crop was decimated during the two hurricanes that hit St. Lucie and Indian River Counties,” says Martin Taylor, president of C. Martin Taylor & Co., a freight forwarder and customs broker based in Jacksonville. “It’s going to have an effect on shipping throughout the citrus shipping season,” which stretches from October to May.
Taylor and others have heard estimates that 40 to 60% of the grapefruit crop was destroyed during the first hurricane and that 50% of what was left was knocked off the trees by the second. “So you’re down to 20 to 25% of the normal crop, if that,” he says. “It will also affect the orange juice market to some degree. It’s not clear at this point how much of the orange crop was destroyed. But what you’re likely to see is quite a decrease in the amount of available grapefruit cargo, and a reduction in the amount of orange juice concentrate cargo later on.”
Grapefruit make up the lion’s share of Florida’s fresh citrus exports. Most of the orange crop is exported in the form of frozen orange juice concentrate. It is likely that producers have enough orange juice inventory on hand to mitigate the effects of the hurricanes in the short term, industry sources say, but next year remains a question mark.
Taylor doubts whether other citrus producers will be able to grab market share at Florida’s expense. “There are other producers, such as South Africa and Turkey, that grow fruit,” he says, “but they are different from Florida grapefruit in texture, taste, and sweetness, and the Europeans recognize it.”
So do the Japanese, according to Lauren Brand, a spokesperson for Port Canaveral. “The Japanese insist that the fruit they eat also be perfect in appearance,” she says.
That’s bad news for Port Canaveral, since 100% of the grapefruit exports it handled last year went to Japan. It is questionable how much of Florida’s battered grapefruit will meet Japanese esthetic standards.
“We expect grapefruit exports that we handle to Japan to be down anywhere from 75 to 80%,” says Jeff Allen, terminal manager of Mid-Florida Freezers, an operator of a cold storage facility in Cape Canaveral. Mid-Florida normally handles around 3.5 million bushel cartons of grapefruit per year. Port Canaveral handled over 44,000 short tons of fresh citrus exports to Japan during the last fiscal year.
Reefer madness
According to Taylor, the longer-term impact of the hurricanes will be felt by the shipping lines. “The shipping lines have to reassess their equipment allocations,” he says. “Its going to have an effect over a considerable period of time. When these goods are not shipped, they need to make changes in their equipment balances.
“Normally citrus products are shipped in reefers,” Taylor explains. “When the citrus shipping season is in effect, there are a terrific number of empty reefers that need to be positioned into this area. Normally, hundreds of reefers a week blow out of South Florida during the season, loaded with grapefruit. Shipping lines position reefers here because they know they can turn them. The lines are looking for a return on their investment. Reefe

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American Journal of Transportation

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Peter Buxbaum has been writing about international trade and transportation, as well as security, defense, technology, and foreign policy, for over 20 years. Besides contributing to the AJOT, Buxbaum's work has appeared in such leading publications as [em]Fortune, Forbes, Chief Executive, Computerworld, and Jane's Defence Weekly[/em]. He was educated at Columbia University.