Orange Juice Prices Surge As Ian Hammers Florida; Cargill Shuts Plants

Orange juice futures on ICE exchange traded up as much as 5.5% on Wednesday as Hurricane Ian hit the Florida coast, threatening to damage orange trees in the largest producing state.

Meat companies also braced for the brunt of the storm hitting the southeastern United States, where livestock and chickens are raised, while agribusiness Cargill Inc shuttered facilities that handle products ranging from grains to salt.

Forecasters say Ian would unleash wind-driven high surf and torrential rains that may cause coastal flooding of up to 12 feet (3.7 meters) in Florida.

Juice futures had already gained more than 2% ahead of the storm on Tuesday. Risks grew for the plantations as Ian's path changed slightly.

"The storm shifted east and further south overnight, placing more of the oranges in harm's way," said Judy Ganes, a soft commodities analyst with J.Ganes Consulting.

Orange juice prices have already gone up this year as Florida's production is expected to drop sharply due to a fungus disease.

Florida is also the largest U.S. grower of sugarcane, but crops are located more to the west of the storm's path.

"Sugarcane stalks are likely to bend (due to winds) rather than break," Janes said.

Food and agricultural companies hunkered down.

Cargill closed grain-processing, salt-packaging, and starches and sweeteners facilities in the Tampa, Florida, area, spokesman Daniel Sullivan said. The company also shut an animal-nutrition facility in the Poinciana-Kissimmee area, he said.

Cal-Maine Foods, the top U.S. shell egg producer which also raises laying chickens in Florida, began preparing for the storm a week ago and is following it closely, Chief Financial Officer Max Bowman said.

Perdue Farms, which raises chickens for meat, is preparing sandbags, checking generators and making sure farms have enough feed, spokeswoman Diana Souder said. The privately held company is adjusting delivery and processing schedules as needed, she said.

Tyson Foods Inc, the biggest U.S. meat company by sales, is preparing to deploy a disaster relief team, spokeswoman Kelly Hellbusch said.

Mosaic Co, which mines phosphate rock in Florida and produces three-quarters of North America's phosphate fertilizers, has fully evacuated some sites in the state and is keeping minimal staff at others, spokesman Bill Barksdale said. He did not confirm whether Mosaic had stopped production, but RBC analyst Andrew Wong said the company halted output on Tuesday, citing consultancy CRU.

Previous hurricanes have resulted in a loss of up to 5% of Mosaic's annual production, Wong said in a note.