Orange groves in Florida, the world’s biggest grower after Brazil, escaped cold weather damage overnight as frigid air set records across the Midwest.
The coldest spots in Florida citrus groves were near freezing, and oranges aren’t damaged unless temperatures are below 28 degrees Fahrenheit (-2.2 Celsius) for a few hours, said Dale Mohler, a senior meteorologist at AccuWeather Inc. in State College, Pennsylvania. Cattle futures extended gains to a record today as livestock slaughter will slow because it’s harder to transport animals in the snow.
The frigid weather strangled transportation routes around the country including interstate highways, airlines and rails. It also led to a surge in energy demand that pushed power in Texas to more than $5,000 a megawatt-hour for the first time and caused disruptions at oil refineries in Tennessee and Illinois. Orange juice futures jumped 2.8 percent yesterday on speculation cold would damage citrus groves in Florida.
“The bullet missed them,” Mohler said. “I don’t think this even damaged the vegetable crops, tomatoes and strawberries, which are more susceptible.”
Orange juice futures traded on ICE Futures U.S. in New York open at 8 a.m. Futures closed yesterday at $1.436 a pound, for a 30 percent gain in the past year.
The Standard & Poor’s GSCI Agriculture Index of eight crops fell 0.1 percent to 351.7 by 7:27 a.m. in New York. The S&P gauge of 24 commodities climbed 0.4 percent. Cattle futures reached $1.37225 a pound, the highest since Chicago trading began in 1964.
Wheat futures on the Chicago Board of Trade fell 0.5 percent to $6.0275 a bushel after closing unchanged yesterday.
Most wheat in the southern Great Plains and Midwest has about 1 inch (2.5 centimeters) of snow cover that can help to protect the dormant crops, Kyle Tapley, a senior agricultural meteorologist at MDA Weather Services in Gaithersburg, Maryland, said in a telephone interview. About 62 percent of the plants were in good or excellent condition at the end of November, according to the U.S. Department of Agriculture.
Cattle prices climbed 1.8 percent in 2013, the fifth straight annual gain and the longest rally since 1964. Beef output in the U.S., the world’s biggest producer, may slump 5.7 percent this year to the lowest since 1993, the USDA has projected.
Animals will need to use more energy to stay warm in cold weather, reducing weight increases and potentially limiting beef supplies, Rich Nelson, chief strategist at Allendale in McHenry, Illinois, said in a telephone interview. Meatpackers processed 15 percent fewer cattle yesterday and 26 percent fewer hogs than a week earlier, USDA data showed.
“The sort of weather is always an issue for livestock,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “You can’t move hogs in weather like this. They will freeze.”
Orange-juice futures in New York jumped 19 percent in 2013 as a crop disease threatened U.S. production.
–With assistance from Brian K. Sullivan in Boston, Jeff Wilson in Chicago and Luzi Ann Javier and Marvin G. Perez in New York. Editors: Sharon Lindores, Dan Weeks
From Insurance Journal