An Economic Analysis of the U.S. Orange Juice Tariff and the Competitiveness of Florida Growers and Processors

Resumen

Although Sao Paulo, Brazil has a climate and soils conducive to producing juice oranges, prior to the 1970s, Brazil was a relatively minor producer of processed oranges and orange juice (Table 1). However, a devastating Florida freeze in 1962, and subsequent freezes in the 1970s and 1980s created an opportunity for Brazil to expand its orange and orange juice production. Most of this production was exported (Table 1), primarily to the U.S. and Western Europe. A climate where freezes do not occur along with cheaper land and labor enabled Brazil to continue its expansion, until by the 1990s, Brazil was by far the largest orange juice producer in the world (Fig. 1), producing almost twice the amount of oranges and orange juice as Florida. In fact, without the protective U.S. tariff on imported frozen concentrated orange juice (FCOJ), the Florida processed orange industry would probably either be much smaller that it is or out of business. This paper shows how this tariff has been reduced by trade legislation and by inflation and the impact than it has had on the Florida processed orange industry.