Brazil’s Orange Juice Supply Chain: How Extreme Weather Impacts Yield, Price, and Demand

Andy Paterson • April 1st, 2025.

Brazil contributes around three-quarters of the global supply of oranges for orange juice. So, when weather disruptions cause yields to reduce their supply, prices will be significantly impacted.

This season, ClimateAi accurately forecasted high risks of extreme heat and drought, conditions that have now materialized. For procurement and sourcing managers at beverage and retail companies, this year’s crop performance is a clear signal: Extreme weather should be treated as a material risk to the orange juice supply chain, not just for this season but for the years ahead.

This article will look at how the high risks of extreme heat and droughts have impacted the yield of this year’s orange crop in Brazil, how that impacted price volatility, and how ClimateAi was able to predict these impacts ahead of time. As well as how sourcing managers should use insights from advanced AI-driven weather tools to make better procurement decisions. 

Why 2024/2025 Conditions Are Impacting the Orange Juice Supply Chain

Based on ClimateAi’s advanced weather predictions from our Risk Outlook tool, we predicted that there would be a high risk of extreme heat and drought in Brazil’s ‘citrus belt,’ where more than 80% of Brazil’s oranges for orange juice come from.  

Newly released data from the 2024 growing season confirms that last year’s crop was highly impacted by extreme weather conditions (heat and drought). Weather impacts plus an orange greening disease outbreak reduced yields substantially compared to the previous year. 

How Extreme Weather Conditions Impacted Orange Production in the 2024/2025 Growing Season

Based on data from the US Department of Agriculture’s (USDA) Brazil Annual Citrus Report, extreme weather contributed to the following outcomes:

• The Brazilian orange crop yield was at its lowest for over 20 years.
• Yield was down in almost every region compared to the previous year (2023).
• Prices were, on average, up three times more than the previous year. 
• High prices led manufacturers to change their recipes and reduce the percentage of orange pulp in their juices.
• Higher prices also impacted demand with a 3% decrease in Brazil and decreases of up to 20% in the EU.

While extreme weather conditions were not the only factors contributing to these outcomes, a citrus greening disease outbreak also played a significant role in the yield, and inflation impacted demand. The droughts and extreme heat in the region were still major drivers in reduced yields. 

What Procurement and Sourcing Teams Need to Know

Extreme weather events have consistently played a considerable role in the orange juice supply chain. 20 years ago, Florida was the world’s biggest producer of oranges, but due to increasingly frequent and severe hurricanes and other contributing factors, production has declined 92% over the past 2 decades.

Brazil has now filled this void, producing around 75% of the world’s oranges for orange juice. However, with extreme weather conditions accelerating sourcing and procurement, managers should consider potential market volatility to keep costs down and ensure supply continuity. 

How Sourcing Teams Should Respond

AI-powered tools like ClimateAi’s Risk Outlook can provide procurement teams with invaluable insights, enabling them to accurately forecast how extreme weather will impact yield and allowing them to have more resilient sourcing strategies. Advanced weather forecasting gives sourcing managers three insights to help them build a competitive advantage.

Making Unforeseen Weather Predictions

This season, Brazil’s orange harvest was the lowest in more than 20 years, despite no immediate signs of trouble during the fruit growth stage, making the low yield this year hard to predict. However, insights from ClimateAi’s Risk Outlook revealed that severe heat and drought conditions earlier in the season—both ranking 95/100 in risk severity—significantly hindered crop development, leading to diminished yields. Sourcing managers that had these insights would have foreseen the reduced yield and increased costs and could have planned accordingly.

Finding An Alternative Source in Spain

Advanced weather forecasting tools also enable buyers to determine alternative regions that are not impacted by extreme weather events, such as Spain, where there are low risks in the upcoming and previous seasons. Plus, since 2018, Spain has enacted effective climate adaptation strategies that have helped the region consistently maintain low-risk levels for excessive heat and drought. 

Understanding Demand Behavior

Estimating price increases due to extreme weather events and knowing how price increases impact consumer behavior is another benefit of advanced weather forecasting tools. Having a better understanding of consumer demand under certain climatic conditions can inform how much sourcers should be buying and at what price point. 

How Advanced Forecasting Can Improve Decision Making

These weather-related risks for Brazil’s citrus growing region are not new. Similar extreme weather patterns were observed during the 2020/21 season when high temperatures caused delayed harvests and increased operational costs as companies extended contracts for seasonal workers. 

These recurring issues underscore the need for long and short-term strategies informed by data-driven forecasts. Understanding these factors ahead of time allows companies to make better procurement decisions, save on costs, and ensure supply continuity. 

Sourcing managers using ClimateAi’s Outlook tools last year would have been well prepared for the weather disruptions in Brazil’s orange growing region in the 2024/25 growing season and made contingency plans.