Climate and economic competitiveness: Florida freezes and the global citrus processing industry

Abstract

Casual observers of the impacts associated with four recent freezes in Florida's citrus producing areas might be inclined to agree with an assessment by Miami Herald reporters that these freezes had caused the ‘king of citrus’ to be toppled from its throne, enabling Brazil to take its place. Research on the citrus industry, however, reveals that the impacts of these recent freezes only explain part of the story of the interaction between climate variability and the relationship between the citrus industries of Florida and Brazil. Climate characteristics and their variability have directly as well as indirectly affected the economic competitiveness of citrus producers whose output is in large measure climate-dependent. Climate variability has had direct impacts on Florida's citrus industry by adversely affecting the productivity of citrus groves in some areas, by altering growers' perceptions of freeze probabilities and, occasionally, by suddenly reducing output, thus elevating the price that consumers must pay for that commodity. Indirectly, competition can be affected by climate as a potential producer identifies a weakness in the supply system of an existing industry and seeks to ‘fill the gap’.