So far this year what was forecast to be one of the most active Atlantic hurricane seasons in years has been kind to Florida citrus groves, prompting futures markets to give back part of the “weather premium” priced into orange juice contracts a few weeks ago.

November New York frozen concentrated orange juice futures prices on the Intercontinental Commodity Exchange were trading mostly in the $1.36@1.42-a-lb range from mid-August into early September. But the threat of damaging tropical weather sent prices surging $1.65 a lb on Sept. 22. Since then, prices eased to around $1.50 a lb last week, maintaining about a 10c weather premium but giving back about 15c from the apex.

With the hurricane season past its peak, although not over, and the Florida orange crop intact, traders may better focus on actual supply and demand, the latter of which has been trending bearish.

In its first citrus forecast for the 2010-11 crop year, which began Oct. 1, the U.S. Department of Agriculture forecast Florida orange production at 6,570,000 tons (146 million 90-lb boxes) in its Oct. 8 Crop Production report, up 9% from 6,012,000 tons produced last year and down 10% from 7,313,000 tons in 2008-09. California’s orange production was forecast at 2,420,000 tons (60.5 million 80-lb boxes), up 14% from 2,119,000 tons in 2009-10. Total U.S. orange production was forecast at 9,062,000 tons, up 10% from 8,201,000 tons in 2009-10.

Florida accounted for 65% of total U.S. citrus production in 2009-10 while California accounted for 31% and Arizona and Texas combined for 4%, the U.S.D.A. said in its Citrus Fruits 2010 Summary issued in September. More than 90% of Florida’s production is processed into juice, while most of California’s crop is sold as fresh oranges.

Despite remaining mostly safe from significant hurricane damage the past few years, Florida’s bearing orange acreage has declined for the past decade, to 483,418 acres in 2010, the U.S.D.A. said in its Sept. 23 Citrus report. Florida’s 2010 orange area was down 2% from 2009, down 27% from the 2000 high of 665,529 acres and the smallest area since 466,252 acres in 1986.

Florida’s orange area dropped 15% from 2004 to 2006 following hurricane losses in 2004 and 2005, but in recent years more gradual losses have mostly resulted from a combination of diseases including canker, greening and black spot.

U.S. 2009-10 orange juice production was forecast by the U.S.D.A. in its July Citrus: World Markets and Trade report at 603,000 tonnes (1,329 million lbs or 208 million gallons), down 20% from 2008-09 and down 27% from 2007-08. U.S. domestic consumption was forecast at 838,000 tonnes in 2009-10, down 4% from 2008-09 but up 1% from 2007-08.

Orange juice imports from Brazil, the world’s largest orange grower, have generally covered the deficit between U.S. demand and supply for several years. Concerns about a forecast 8% reduction in Brazil’s 2009-10 orange crop supported U.S. orange juice futures prices earlier in the year, but a higher juice yield actually resulted in a 4% increase in juice output from the 2008-09 five-year low and a 1% increase from 2008-09 in Brazilian exports to the United States.

Orange juice demand has been a concern for U.S. growers and processors for several years, sinking to a multi-decade low in 2007-08, the result of consumers concern about carbohydrates and resistance to strong prices, especially in years of tight supply.

The average retail price of a gallon of orange juice for the past two years has been below the prior two-year average most of the time, according to data from The Nielsen Co. reported by the Florida Citrus Commission, although current prices were above year-ago levels. After selling about 7% below year-earlier values in January 2010, the average four-week price climbed above year-ago prices in May and has held at about 4% above year-ago since July.

Meanwhile, gallon sales in 2009-10 have been below the prior three years since February, with volume down about 7% to 9% since May 2010, according to the Nielsen data.

Major U.S. processors announced retail orange juice price increases of 5% to 9% in April and May of this year.

While sagging demand will likely remain a worry for the industry for the foreseeable future, once the Atlantic hurricane season ends, the next period of concern for Florida citrus will be the threat of a winter freeze, which was the major cause of the smaller 2009-10 crop.