Florida Citrus Mutual request results in $20 million USDA purchase of OJ

The $20 million purchase of surplus frozen concentrate orange juice would lower inventory by one week

BARTOW, Fla. – The U.S. Department of Agriculture authorized the purchase of $20 million worth of surplus frozen concentrate orange juice this year, Florida Citrus Mutual announced Thursday.

The USDA purchase, which was prompted by a Florida Citrus Mutual request, will most likely be for 100% Florida Orange Juice only, wrote Mike Sparks, CEO of Citrus Mutual, in an e-mail announcing the news. Though Texas or California juice would also qualify.

The purchase falls under the Section 32 program, a federal appropriation in place since 1935 which aims to support the farm sector through the purchase of surplus commodities. Section 32 supplies the USDA’s nutrition programs.

The $20 million purchase would move about 6 million pound solids, which would lower inventory by about one week of supply, according to Citrus Mutual estimates. If the purchase is made prior to Oct. 1, a 2.5 percent reduction in supply is anticipated. The purchase is expected to be worth about $0.2/ps on average over the entire orange crop.

“We believe the current $20 million OJ purchase is the initial buy in what should be a series of purchases over the next few years to help alleviate inventories,” Sparks wrote.  “Clearly, this will have a positive effect on grower returns.”

Citrus Mutual thanked U.S. Secretary of Agriculture Tom Vilsack, U.S. Senator Bill Nelson, U.S. congressmen Tom Rooney and Dennis Ross as well as the entire Florida Congressional delegation for their work on the request.