BUSINESS

The South’s big chill

A brutal cold snap raises produce prices

JOHN DALY January 8 1990
BUSINESS

The South’s big chill

A brutal cold snap raises produce prices

JOHN DALY January 8 1990

The South’s big chill

BUSINESS

A brutal cold snap raises produce prices

It was one of the worst cold snaps in Florida’s history. And even as winter’s icy grip on the Sunshine State relaxed last week, it was clear that North American consumers will be paying higher prices for months to come for Florida oranges, lemons, grape-fruits, celery, tomatoes and other winter produce as a result of the devastation wrought by the big chill. Roughly 80 per cent of Florida’s citrus crop was still on the trees when temperatures dipped below the freezing point on Dec. 23. When the deep freeze ended two days later, the record-low temperatures had transformed the state’s once-lush groves into a disaster area. And Florida Gov. Robert Martinez declared a state of emergency after touring the devastated orange belt.

Last week, the first economic aftershocks of the disaster spread northward, as the price of January orange-juice contracts on the commodity-futures exchange in New York City climbed to $1.82 per pound from $1.58 at the beginning of the week. The price jumps prompted the government of Brazil—the world’s leading orange-juice exporter—to temporarily halt exports on the assumption that prices would stabilize at a higher level. Meanwhile, wholesalers said that the devastation will cause the prices of oranges and other produce on Canadian supermarket shelves to begin rising as early as this week because of the customary quick turnover of fresh produce.

For farmers in Florida and other southern states such as Texas and Louisiana—which

provide the majority of tomatoes, zucchinis, peppers and green beans for Canadian supermarket shelves in December and January—the destruction was immediate and almost total. As the temperature dropped, Frederick Burkey, who owns a farm near Stuart, Fla., turned on sprinklers in a bid to save his tomato plants by completely covering them with ice. But his efforts—like those of many other farmers— were unsuccessful. Said Burkey: “This is the worst I’ve seen it. I’ve lost everything.”

Produce prices at the wholesale level shot up almost immediately in response to news reports of the disaster. In some cities in the United States, citrus fruit prices soared by as much as 70 per cent last week. In southern Ontario, which normally imports about 90 per cent of its tomatoes from Florida during December and January, the wholesale price of a 25-lb. box jumped to close to $24 last week, up from $9 before the freeze-up. Said one Toronto wholesaler, who asked not to be identified: “There is almost no produce available. And what is available, they’re trying to get as much as they can for.” He added that tomato prices will not begin to drop until crops are harvested in Mexico in February.

By week’s end, temperatures in Florida rose to above 20°C, but it was too late to reverse the damage wrought by the cold snap, and too late to prevent the higher prices that North American consumers will face in coming weeks.

JOHN DALY