Thursday, February 6, 2025

Florida’s orange juice industry nears its expiration date

About that bottomless brunch...
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Today's Agenda

The Last Great American Dynasty

My dad's morning routine — doesn't every dad have one? — includes a dozen or so scary-looking vitamins that are chased with a protein shake, drunk straight from the blender. Each shake is slightly different, depending on what's in season. During the holidays he'll pop a Harry & David pear in there. Over the summer he's a big strawberry and blueberry guy. Sometimes he'll sneak in some chocolate syrup or peanut butter. No matter what, though, there's always orange juice — the super duper pulpy kind that you have to chew instead of drink.

But after reading Mary Ellen Klas' latest column about Florida's OJ crisis, I'm not sure how much longer my dad will be making these shakes! It's an increasingly expensive habit:

Orange juice is getting squeezed from all sides. Last year, Hurricane Milton wiped out thousands of fruit trees in one fell swoop — just one of many headaches plaguing homeowners and insurers, write Liam Denning and Mark Gongloff — but the Sunshine State's problem has persisted for decades prior to that. "For 30 years, the industry has been ravaged by disease and hurricanes, and citrus production has been on a steep decline," Mary Ellen explains. The orange haul in 2025 could reach century-low levels:

At the same time, shrinkflation has led to slimmer packaging and pricier selections. And Mary Ellen says President Donald Trump's tariff intimidation tactics could make things even worse. You might think that "Florida's Natural" uses only oranges from its eponymous state, but you'd be mistaken: It uses imported juice from Mexico and Brazil, too. Same with Tropicana and Simply Orange.

"Citrus processing plants, packing houses and nurseries supply more than 33,000 jobs in Florida and have an annual economic impact of over $6.8 billion. … That is all at risk if Trump resumes the reckless trade war with the US allies of Canada and Mexico. The impact of their retaliatory tariffs in Trump's home state of Florida alone would not only raise the cost of importing Mexican juice to Florida bottlers, it will likely send Canadian consumers to competitors," Mary Ellen writes.

"Trade wars always involve trade-offs. But it is hard to imagine a Florida without oranges — the ubiquitous wholesome symbol emblazoned on the state's license plates and the source of both the official state beverage (orange juice) and flower (the orange blossom)." It's also hard to imagine breakfast — or those daily shakes — without orange juice. Between this and bird flu, those bottomless mimosa brunch deals that millennials love are all but guaranteed to die.

Bonus Trade War Reading: Tariff backers suggest that currency offsets will make the inflationary impacts more muted. Maybe, but at what cost? — Jonathan Levin

Is Tax Season a Thing Anymore?

Yes, it would be nice if Trump's IRS overhaul meant we didn't have to pay taxes this year, but that's not gonna happen. The employees who play a critical role in the tax filing system aren't eligible for a buyout until at least mid-May. Not to mention, a federal judge just hit pause on the whole scheme this afternoon, but more on that later.

The Trump administration has been hellbent on stopping federal spending in its tracks, a move that Justin Fox says has been met mostly with applause from red states. "That's sort of what one would expect given that Trump is a Republican, but also kind of weird in that states and congressional districts that vote for Republicans are as a rule much bigger net beneficiaries of federal spending than those that vote for Democrats," he writes.

Griping about tax season may be one of America's few remaining bipartisan traditions, but residents of New York, New Jersey, Connecticut and California have special cause — they see themselves as keeping the federal government afloat. The reason is simple: Many of the richest of the rich reside in those states. "The federal government gets about half its revenue from individual income taxes, with 30% coming from Social Security and Medicare taxes. The income tax system is progressive, meaning those with high incomes are taxed at higher rates than those with low ones." But, when Justin adjusted the income with cost of living, the picture got a bit murkier:

His conclusion? "Maybe the tax system is unfair to residents of affluent blue states and cities. One possible response would be to adjust income tax brackets for regional cost of living. But that would be complicated," Justin writes. "Instead, what's on the table is increasing the SALT cap, which would benefit only a small number of high-income people in high-tax states. But yes, it would also shift a little bit of the burden of financing the federal government away from the blue states."

This is only a slice of our opinion coverage. To unlock every story and get full access to all our columnists, become a Bloomberg.com subscriber.

The FBI Witch Hunt

Back to the Trump-Musk buyout brouhaha: As of 3 p.m. New York time, more than 50,000 federal employees — about 2% of the workforce — had signed on the dotted line, including an unknown number of CIA agents. But a judge will assess the legality of the deferred resignation program next week.

The FBI, meanwhile, is being a bit more shameless about lightening its load. Barbara McQuade says acting FBI Director Brian Driscoll received a memo with a very original subject line — "Terminations" — that told him to fire eight senior officials and to collect the names of FBI personnel "assigned at any time to investigations" relating to the Jan. 6 riots.

Read between the lines, Barbara says, and this is a loyalty test. "The administration appears prepared to retaliate against the public servants who worked to bring the Jan. 6 offenders to justice. Firing FBI agents and analysts just because they worked on these cases is not only illegal — it violates the civil service protections afforded to federal employees — but it would also be dangerous for a number of reasons," she writes.

Conor Sen is watching all of this federal employment drama unfold from the sidelines and is worried about the job market. "Openings in government fell 12.4% from a year ago, and that was before the Trump administration took office and began looking to cut seemingly every job it can," he writes. "Unless we get a pickup elsewhere, employment prospects for job seekers will weaken in 2025."

Telltale Charts

In 2022, after Gucci parted ways with its creative director Alessandro Michele (who, fun fact, is best friends with Harry Styles), Andrea Felsted wrote a prescient column about how the label needn't fix what isn't broken. Sadly, it did not heed her advice: Sabato De Sarno — Michele's replacement — is already headed out the door. Not only did his stint at the fashion house "coincide with the worst luxury downturn since the great financial crisis (excluding pandemic disruption), but his designs never really seemed to be in sync with top-end buyers," she writes. Now Gucci is in the gutter yet again, creating a major headache for its parent company Kering.

Meta may be the golden child of the Magnificent Seven now, but Dave Lee says Wall Street ought to exercise some caution. Zuckerberg's swagger is "seeping into investors' outlook," he writes. "They see the gold chain, curly hair and closer relationship with President Donald Trump and the right and think this can all be good for Meta's prospects. … But a company can't get by on 'masculine energy' alone. The question that hangs over Meta is how its AI forays will meaningfully drive revenue in the future."

Further Reading

Stopping bank criminals need not cost customers. — Bloomberg's editorial board

Trump's "Iron Dome" must succeed where Reagan failed. — James Stavridis

Delaware lets managers do a lot of stuff, but not everything. — Matt Levine

Trump is weaponizing US aid in South Africa. — Melanie Verwoerd

Europe is smart to replenish its gas stockpiles. — Javier Blas

Trump's economic strategy: Bring the 10-year yield down. — John Authers

ICYMI

A DOGE staffer resigned over racist posts.

Lara Trump lands a gig at Fox News.

"No tax on tips" will harm workers.

Thousands of earthquakes hit Santorini. 

Tech's hot new buzzword is "high agency."

Kickers

How to speak cow.

Lab grown dog treats.

A swimming vacation.

Notes: Please send protein shakes and feedback to Jessica Karl at jkarl9@bloomberg.net.

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