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By Omar Mohammed
Reporter, Economy & Finance
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Juice prices soared in January, data from the U.S. Bureau of Labor Statistics showed on Tuesday, in what analysts say is due to an increase in ingredient and production costs.
The frozen and nonfrozen noncarbonated drinks segment of the market saw price increases in January, according to BLS. Prices for the frozen category saw a 10 percent jump increase for the month, while yearly, it skyrocketed by 29 percent. The unfrozen group saw prices go up by nearly 2 percent for the month and more than 4 percent compared to the same time last year.
This segment of the beverages section of the Consumer Price Index (CPI) encompasses different types of juices and the increases seen in January is a "ratcheting up" of prices that has been creeping up over the last two months, Wells Fargo Agri-Food Institute's senior vice president and sector manager David Branch told Newsweek.
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"Across the board, we're getting reports to higher ingredient costs including you know packaging, freight, labor, everything else continues to kind of ratchet up," Branch said.
Orange juice, for example, relies on Florida for the crop, but for the year ended in September, the region saw the lowest crop it has seen since the 1930s, according to Branch. This was due to diseases affecting the crop and weather events, such as hurricanes, the state has experienced.
Other sources of crops such as Brazil and Mexico, which could have supplemented the gap that exists in the U.S., have also been hurt by drought that has affected production over the last few months, Branch said.
One key ingredient for juice is sugar which has also seen price increases, which in turn pushed up prices for the drinks. In the fall, sugar price futures soared to nearly 28 cents per pound, according to data from Trading Economics.
"All juices have some form of sweetener for the most part and so the combination of those two product prices, market prices being high, pushed up juice prices as well," Branch told Newsweek.
Branch went on to say that it will take a couple of production cycles for prices to normalize but there are signs of improvement, at least in the orange sector.
"U.S. production for this current crop year is projected up 30 percent to 20.5 million boxes. It's not much, but it's significantly higher than what they ended up with last year," he said.
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