(NEW YORK) — A better-than-expected jobs report on Friday displayed the resilient strength of the U.S. economy, even after years of high interest rates and stubborn inflation.
Employers hired 272,000 workers last month, blowing past economist expectations of 190,000 jobs added, U.S. Bureau of Labor Statistics data showed. The unemployment rate ticked up to 4%, reaching that level for the first time since January 2022.
The hiring exceeded the average number of jobs added each month over the previous year, and it accelerated notably from the 175,000 jobs added in April.
The blockbuster report defies the nation’s flagging economic growth. Gross domestic product slowed significantly at the outset of this year, suggesting that the prolonged policy of high interest rates had weighed on business investment and economic activity.
“The May jobs report was strong across the board,” Bret Kenwell, an investing analyst at eToro, told ABC News in a statement.
In theory, high interest rates depress consumer demand and slow price increases. Inflation has fallen significantly from a peak of 9.1%, but it remains more than a percentage point higher than the Fed’s target rate of 2%.
That economic slowdown appeared to manifest in a dip in job openings reported earlier this week. Job openings fell in April to the lowest level since February 2021, BLS data on Tuesday showed.
However, the labor market surprised observers on Friday with a burst of hiring that improves the economic outlook but may complicate the Fed’s decision next week on a possible interest rate cut.
The Fed risks a rebound of inflation if it cuts interest rates too quickly, since stronger consumer demand on top of solid economic activity could lead to an acceleration of price increases.
Average hourly wages surged 4.1% over the year ending in May, the fresh data on Friday showed. That rate of pay increase exceeds the pace of inflation, indicating that the spending power of workers has grown even as prices jump.
The data marks a boon for workers but could give pause to policymakers, since they fear that a rise in pay could prompt businesses to raise prices in order to cover the added labor cost.
“Today’s data undermines the message that other recent economic data have been giving of a cooling U.S. economy, and slams the door shut on a July rate cut,” Seema Shah, chief global strategist at Principal Asset Management, told ABC News in a statement.
The major stock indexes fell slightly in pre-market trading in response to the jobs report.
(NEW YORK) — Jessica Morrison and Jason West, a Philadelphia-area couple with a 4-year-old daughter, stood on the verge of a financial breakthrough.
West was breezing through the hiring process to become a driver at UPS, a job that paid $400 a week and would supplement Jessica’s salary as a state employee.
“It was exciting,” Morrison told ABC News, recounting a moment that took place five years ago. “This was something that could bring us up.”
Their hopes soured, however, when they realized child care would cost them all of the added income, even as the loss of West’s flexible schedule would complicate the family’s daily life. West withdrew his application.
“It was really disheartening,” said West, who has worked gig jobs ever since.
Though their daughter has reached school age, the couple says child care costs have become even less affordable for their 5-year-old son.
As the November election approaches, inflation ranks as a top issue for voters beset by a yearslong surge in the price of essentials like gasoline, flour and housing. But less attention has been paid to the skyrocketing cost of child care, which strains the monthly budget for millions of families.
The affordability crisis in child care threatens not only strapped families but also a vast network of facilities struggling to stay in business as well as the nation’s overall economic strength, which depends on the capacity of parents to work outside the home, experts told ABC News.
Democrats and Republicans in Washington, D.C., differ significantly on the issue, amplifying the stakes of this year’s election, Rachel VanSickle-Ward, a professor of political studies at Pitzer College, told ABC News.
“Based on who wins in November — both at the presidential level and at the congressional level — it is make it or break it for child care policy,” VanSickle-War said.
Families in the U.S. spend an average of $11,000 on child care each year, which amounts to a nearly 250% increase since 1991, the advocacy group Child Care Aware found in 2022.
In recent months, the rise in prices has accelerated. The cost of child care climbed 4.1% over the year ending in April, outpacing the overall inflation rate by more than half a percentage point, U.S. Bureau of Labor Statistics data shows.
Joanne Sawicki Luszczak and her daughter Tiffany Martin, the owners of Teddy Bear College in Bensalem, Pennsylvania, say they have raised the price of tuition in recent years as a means of weathering increased costs of their own.
Teddy Bear College provides snacks and lunch for students each day, leaving its balance sheet vulnerable to the recent rise in food prices.
Meanwhile, the child care center has raised wages for its workers, trying to stem an exodus of entry-level employees who have sought better pay elsewhere. While pay has increased for workers the past few years, the median weekly wage in child care is $635, or about $33,000 a year, Axios reported in April.
“The challenge of actually retaining good quality staff is tricky, because what the tuition brings in is what we have to pay,” Sawicki Luszczak said. “If we raise tuition, we can give raises out. Well, there’s a limit to that.”
The squeeze faced by families and child care centers has elicited policy proposals at the state and federal level.
In Pennsylvania, a key swing state, a bipartisan measure last year expanded the state’s child tax credit.
Eligible families — those earning less than $43,000 a year with two or more children — receive a state tax credit of $2,100, delivering a 100% match to the federal tax credit. Families above the income threshold receive a tax credit of $1,200.
Democratic Rep. Tina Davis, a sponsor of the law, said it will lower the cost barrier for families and, in turn, help boost income at day care centers and other businesses.
“It just puts money in people’s pockets,” Davis said. “When you put money in people’s pockets, they’re going to spend it. It’s going to help small businesses.”
Republican Rep. Joe Hogan, who also backed the measure, said its benefits will extend economy-wide as it allows some parents to remain at their job or enjoy the latitude to pursue a new one.
“No party has a monopoly on good ideas,” Hogan said. “We’ve got to be putting families first. We need more policies so that people feel comfortable entering the workforce.”
Bipartisan agreement has proven elusive at the federal level, however. Congress has failed to renew a pandemic-era expansion of the federal child tax credit that expired in 2022.
President Joe Biden and former President Donald Trump offer dramatically different approaches to the issue, said VanSickle-Ward, of Pitzer College.
Biden has sought a role for the federal government to spend on making child care more affordable, she added. Child care subsidies were included in Build Back Better, a 2021 spending package backed by Biden that failed to garner sufficient support in Congress.
In his state of the union address, in March, Biden proposed a minimum tax for billionaires that would help fund federal support for families seeking child care.
“Imagine a future with affordable child care so millions of families can get the care they need and still go to work and help grow the economy,” Biden said.
In a statement to ABC News, the Biden campaign contrasted the policies taken up by the two major candidates.
“Donald Trump has no plan to help lower the costs of child care, in fact, his agenda raises costs on the typical American family by at least $1,700 annually, cuts Social Security and Medicare, and repeals the Affordable Care Act. President Biden knows that affordable child care lifts our economy, which is why he’s fighting everyday to lower costs and give families more breathing room,” Biden campaign spokesperson Seth Schuster said.
For his part, Trump proposed a $1,200 tax credit for child care during his 2016 campaign. A year later, Trump enacted his signature tax measure, which expanded the child tax credit from $1,000 to $2,000 per child. The expanded child tax credit was unavailable to more than 25 million low-income families, however, according to an analysis by the nonpartisan Center on Budget and Policy Priorities.
“I haven’t heard as much from Trump on childcare in this election cycle,” VanSickle-Ward said.
In a statement to ABC News, the Trump campaign touted his record on child care and faulted Biden for the price spike.
“President Trump doubled the Child Tax Credit, expanded access to quality, affordable childcare, and created the first paid family leave tax credit for job creators — easing the burden on hardworking parents and families,” said Karoline Leavitt, national press secretary for the Trump campaign. “Due to Joe Biden’s out-of-control spending, prices are up, real wages are down, and it’s harder than ever for families to make ends meet.”
“By making life affordable again and empowering parents, President Trump will ease the burden of Bidenflation, improve academic excellence for students, and strengthen our childcare system for all American families,” Leavitt added.
Regardless of what happens in November, the affordability of child care will hold major implications for the U.S. going forward, VanSickle-Ward said.
“It’s really impossible to overstate how impactful child care is to the economy,” VanSickle-Ward said.
(NEW YORK) — Prominent backers have poured billions into a new Texas-based stock exchange that aims to attract companies with what it considers more business-friendly rules than those of the New York Stock Exchange and the Nasdaq.
The Texas Stock Exchange, which boasts funding from market maker Citadel Securities and asset manager BlackRock, intends to submit filing documents with the Securities and Exchange Commission later this year, TXSE Group, the company behind the exchange, said in a statement on Wednesday.
In recent years, some chief executives critical of what they deem to be “woke capitalism” have moved their companies to Texas, where more Fortune 500 companies are headquartered than any other state.
The new stock exchange could indicate an effort to attract conservative-minded firms, some experts told ABC News, but others downplayed the potential role of politics. In a statement, TXSE Group said that the exchange is apolitical.
TXSE Group acknowledged but declined to respond to ABC News’ request for comment.
Here’s what to know about the Texas Stock Exchange and what it says about the corporate culture wars
How will the Texas Stock Exchange work?
Headquartered in Dallas, the Texas Stock Exchange will be a fully electronic, national exchange that allows companies to list and trade on its platform.
The new exchange also plans to list exchange-traded products, a growing category of investment vehicles that allow customers to bet on a basket of assets. An exchange-traded bitcoin fund, for instance, allows clients to invest in bitcoin without holding the underlying cryptocurrency.
More than two dozen investors have backed the exchange with a total of more than $120 billion in funds, the TXSE Group said in a statement.
The exchange plans to attract businesses frustrated by stringent listing standards and the increasing costs they impose, the TXSE group added. For instance, the Nasdaq has imposed new rules setting targets for board diversity, the group said.
“Combined with the demand we are seeing from investors and corporations for expanded alternatives to trade and list equities, this is an opportune time to build a major, national stock exchange in Texas,” James Lee, founder and CEO of TXSE Group, said in a statement.
The Wall Street Journal first reported details about the exchange.
Is this an ‘anti-woke’ exchange?
The announcement coincides with a conservative backlash against climate-friendly business practices as well as diversity, equity and inclusion policies derided by some critics as “woke capitalism.”
Analysts who spoke to ABC News differed over the extent to which the Texas Stock Exchange serves as a listing or trading alternative for conservative-leaning companies.
Some said ‘anti-woke’ branding would make up a key selling point for the new exchange, while others downplayed the role of politics for an exchange that promises lower compliance costs, as the Texas Stock Exchange does.
“Texas has a pretty clear message: ‘If you’re anti-woke, come here,’” Larry Tabb, head of market structure research at Bloomberg Intelligence, told ABC News.
As technological advances have taken stock exchanges online and lowered the baseline cost of offering high-quality services, the exchanges have sought alternative means of attracting customers, Tabb said. These days, the primary features that distinguish exchanges are listing rules, branding, and liquidity, he noted, but he emphasized branding.
When companies list with the New York Stock Exchange or Nasdaq, they draw on the credibility associated with those highly visible exchanges, Tabb added.
“They want to be affiliated with where you ring the bell or the exchange in Times Square,” Tabb said, noting that companies critical of sustainable practices or robust regulations may want an exchange affiliated with that point of view.
“The Texas exchange might draw energy companies; it might draw Tesla,” Tabb said, adding, “I’m not sure most companies want to be on the outer edge of the culture war issue.”
Christine Parlour, professor of finance and accounting at the University of California, Berkeley Haas School of Business, downplayed the role of politics in the Texas exchange. Instead, she said, most prospective clients are primarily focused on where they can find liquidity.
“All exchanges are money-making entities,” Parlour said. “At some point, people want to make money. So things can’t or won’t be completely driven by perception.”
In an aerial view, the Walt Disney World resorts and theme park sit along the Seven Seas Lagoon on February 8, 2023 in Orlando. (Joe Raedle/Getty Images)
(NEW YORK) — Disney and appointees of Florida Gov. Ron DeSantis have officially approved an agreement that could result in the company investing $17 billion into its Florida properties, as well as a potential fifth major theme park.
The news comes two months after the two parties agreed to end their drawn-out legal battle, which centered on oversight of the Disney World district that provides municipal services like fire suppression, emergency medical services, law enforcement services, environmental protection and public utilities.
The DeSantis-appointed supervisors of the Central Florida Tourism and Oversight District — formerly the Reedy Creek Improvement District — are one step closer to cementing a final agreement with Walt Disney Parks and Resorts U.S., after the appointees unanimously voted Wednesday to accept proposed revisions and approve the new development agreement. Disney is the parent company of ABC News and Good Morning America.
Both sides had agreed to negotiate this new agreement after a March settlement, which ended their previous lawsuits against each other.
Final action for the development agreement will take place with Walt Disney Parks and Resorts in another public board meeting on June 12.
During a livestream of the first of the board’s two public hearings on the agreement on Wednesday, Katherine Luetzow, manager of planning and engineering for the district, highlighted details of the 15-year development agreement, which covers nearly 17,000 acres of land within the district that is currently owned by Walt Disney Parks and Resorts and its subsidiaries.
“Disney is currently planning up to $17 billion of capital investments within the district in the next 10 to 20 years, with a commitment of $8 billion in the next 10 years,” she said. “There are provisions for by local initiatives, including a minimum of 50% of goods and services related to the design, development and construction, to be retained with Florida businesses. There is $10 million going to attainable housing projects, and there are provisions for land, as well as wetland and threatening endangered species mitigation credits being donated to the district.”
The members of the Central Florida Tourism Oversight District board welcomed public comment from two small business owners that operate at Disney Springs, who both urged the board to approve the new deal.
Luetzow said their staff reviewed this agreement and recommended the board review and approve this development agreement.
The members of the Central Florida Tourism and Oversight District board welcomed public comment from two small-business owners who operate multiple food establishments at Disney Springs. Both urged the board to approve the investment from Disney, which they said would benefit thousands of restaurant workers, their families and anyone who lives and works in this district.
Woody Rodriguez, director of external affairs for Disney Parks, spoke at the meeting and thanked the board for considering the agreement.
“I especially thank your district administrator who definitely hit the ground running,” Rodriguez said. “The development agreement will enable us to continue to invest significantly in the district to benefit all parties. We hope that the board votes to approve it at your next public hearing. Thank you.”
As ABC News reported previously, DeSantis has been at odds with Disney since the company publicly criticized a DeSantis-backed controversial Florida law that restricts content concerning sexual orientation and gender identity in grades kindergarten through third grade. The Parental Rights in Education Law was dubbed by critics as the “Don’t Say Gay” law, with opponents arguing it painted LGBTQ topics as taboo or inappropriate.
DeSantis subsequently took control of Disney’s special tax district, which allows the theme park to govern itself, and the Florida Legislature voted to dissolve the former governing board of the district, creating the DeSantis-appointed Central Florida Tourism Oversight District in its place.
Disney sued DeSantis and various Florida officials in April 2023 over the decision, alleging the move was “patently retaliatory, patently anti-business, and patently unconstitutional.” The lawsuit took aim at the state oversight board’s decision to void “publicly noticed and duly agreed development contracts which had laid the foundation for billions of Disney’s investment dollars and thousands of jobs,” according to the legal filing.
The company called the move “a targeted campaign of government retaliation — orchestrated at every step by Gov. DeSantis as punishment for Disney’s protected speech” and said it “threatens Disney’s business operations, jeopardizes its economic future in the region, and violates its constitutional rights.”
A federal judge in Florida dismissed the lawsuit in January this year, stating at the time that Disney had not shown standing to sue the governor. Disney subsequently appealed the ruling.
In March, Disney agreed to end litigation in light of the proposed development agreements, which were approved on Wednesday, with Walt Disney World President Jeff Vahle stating at the time, “We are pleased to put an end to all litigation pending in state court in Florida between Disney and the Central Florida Tourism Oversight District. This agreement opens a new chapter of constructive engagement with the new leadership of the district and serves the interests of all parties by enabling significant continued investment and the creation of thousands of direct and indirect jobs and economic opportunity in the State.”
Disney is the parent company of ABC News and “Good Morning America.”
(NEW YORK) — AT&T has resolved the “interoperability issue between carriers” customers were experiencing on Tuesday, the company said in a statement.
Customers began reporting a “nationwide issue that is affecting” their ability to call non-AT&T users, AT&T said at the time.
The company later clarified the network “did not experience a nationwide outage,” but some users across the country were affected.
“The carriers are working as quickly as possible to diagnose and resolve the issue,” AT&T said.
The company later said that it erroneously sent out a “wireless impact notification” to 911 call centers during the outage.
“Nationwide 9-1-1 Services are operating normally at this time and our customers are not affected,” AT&T said in a statement around 5:20 p.m. ET.
The Federal Communications Commission said in a post on X that it was “aware of reports that consumers in multiple states are unable to make wireless calls and we are currently investigating.”
Verizon said its network is working normally but some of its users, mostly in the Northeast and Midwest, “are experiencing issues when calling or texting with customers served by another carrier.”
This is the second time in three months that AT&T has experienced an outage.
In late February, AT&T customers across the country experienced a similar outage following a a software update, according to the company.
The February outage temporarily affected 911 services in several states.
The FCC opened an investigation into that incident.
Priceless Pets volunteer Mary Green of Chino Hills, places new collars on some of the 200 beagles who were among 4,000 dogs freed from a Virginia breeding facility, moments after the dogs arrived in two trailers at Priceless Pets, a nonprofit rescue, in Chino Hills on July 23, 2022. (Mark Rightmire/Orange County Register via Getty Images, FILE)
(WASHINGTON) — The Department of Justice and Environmental Protection Agency announced the largest ever fine under the Animal Welfare Act on Monday, totaling more than $35 million in criminal fines, donations and costs to upgrade their operations to be paid by a company that surrendered 4,000 beagles from a dog breeding facility in Virginia in 2022.
In 2022, the DOJ secured the surrender of more than 4,000 dogs from a facility that bred and sold animals for research, saying the operators failed to meet minimum standards for humane treatment of the animals.
“Envigo compounded the heartbreaking nature of its animal welfare crimes by committing egregious Clean Water Act violations that undermined public health and the wellbeing of the animals in their care,” David M. Uhlmann, assistant administrator of EPA’s Office of Enforcement and Compliance Assurance, said in a statement.
“Everyone victimized in this precedent-setting animal welfare case deserved better: the workers, the beagles, the environment and the community,” he said. “Envigo deserves every dollar of its record fine.”
The Animal Welfare Act is a federal law that sets minimum standards of care for animals in captivity, being used for research or educational settings, or being sold to the public. The dog breeding facility in Cumberland, Virginia, which is now closed, was cited for failing to provide adequate veterinary care to the animals in its facility as well as failing to meet requirements for adequate housing, food, and sanitation.
Many of the dogs rescued from the breeding facility in 2022 were adopted into new homes.
The parent company, Inotiv Inc, will now pay $35 million and be subject to a compliance monitor and increased standards for their operations, according to an EPA press release. One of the companies responsible for the facility, Envigo Global Services, pleaded guilty to conspiracy to violate the Clean Water Act for failing to operate wastewater treatment at the dog breeding facility and exposing dogs and people working in the facility to water that was contaminated with fecal matter and was released into a local waterway.
Another company, Envigo RMS, pleaded guilty to conspiracy to violate the Animal Welfare Act by failing to provide veterinary care, adequate staffing and safe living conditions for the animals in the facility.
Inotiv Inc. is a company that provides services to support “nonclinical and analytical drug discovery and development services,” including animal breeding, according to its website. In a statement on its website, the company said the agreement announced Monday will resolve the investigation into the facility.
“Inotiv’s top priority has always been — and remains — practicing appropriate standards of animal welfare for our animals, while supporting the scientific objectives of the studies conducted. We strive to maintain facilities that are compliant with applicable federal, state, and local laws and regulations and consistent with our core value to always do the right thing. That is why we worked to reach this agreement, and why we have agreed to go above and beyond those legal requirements,” the company said in the statement.
About $22 million of the payment is a criminal fine, about $3 million will be given to the Humane Society of the United States and Virginia Animal Fighting Taskforce, $3.5 million will be donated to the National Fish and Wildlife Foundation for ecosystem restoration and another $7 million will be used to update their facilities to higher standards than required under the Animal Welfare Act.
(NEW YORK) — Shares of GameStop climbed more than 75% in early trading on Monday, triggering a halt in markets multiple times on account of the volatility. The rally softened over the ensuing hours, but the price remained up 30% into the late morning.
The surge followed the reemergence on Sunday of a Reddit account associated with Keith Gill, the trader known as Roaring Kitty, whose online posts helped send the stock soaring in 2021.
Shares of the movie theater chain AMC, another pandemic-era meme stock, vaulted more than 10% on Monday morning.
Analysts who spoke with ABC News said the price movement resembles the previous frenzy centered on GameStop and AMC, saying it may once again deliver returns for some investors. However, they cautioned, investors face considerable risk if the momentum peters out before they sell their shares.
Here’s what to know about the skyrocketing price of GameStop.
Why is the price of GameStop soaring? The Reddit account associated with Gill posted a screenshot on Sunday of an apparent portfolio holding five million shares in GameStop, purchased for $21.27 each, amounting to a stake valued at about $115 million when pegged to the closing price of GameStop on Friday.
The portfolio also featured 120,000 call options in GameStop at an exercise price of $20 per share.
ABC News has not confirmed the Reddit post was authored by Gill.
In addition to the post on Reddit, an X account associated with Gill posted an image of the reverse card from Uno, a card game, suggesting to some observers that Gill intended to rejuvenate the price of the stock.
In 2021, the price of GameStop climbed nearly 700%, driven in part by traders discussing the company on a Reddit chatroom called Wall Street Bets, most notably Gill. The rally did not coincide with a major strategy shift or executive shakeup for the ailing chain of video game stores.
“People think that guy was right last time and he must be right this time,” Michael Pachter, a managing director at the financial research firm Wedbush, told ABC News.
The apparent posts from Gill on Sunday follow a similar flurry of activity last month. On May 12, an X account associated with Gill returned from a nearly 3-year hiatus by posting an image of a man sitting up in his chair. The post set off a 180% spike in the stock price over the ensuing days, before shares plummeted to a level near where they stood before the surge.
Should investors buy GameStop while it’s rising? Analysts said GameStop may continue to rise in the short term but they noted differences in the trade this time around and sounded alarm about the risk of sustaining losses if others unload the stock first.
In 2021, the surge in trading was driven in part by investors’ attempt to achieve a short squeeze. Under that scenario, investors drive a sudden spike in the price, forcing a surge of additional share purchases from others who want to cover their previous bet that the price would fall.
Back then, Gill and other investors identified a massive short position in GameStop — a dynamic that eventually catapulted the stock upward as short sellers aimed to cover their losses.
In this case, however, the short position no longer exists, Pachter said. Meanwhile, he added, the company faces a difficult business environment as it weathers a transition toward downloadable games and away from its specialty of in-store purchases.
The current circumstances heighten the level of risk faced by prospective investors, he added.
“A stock is worth what somebody’s willing to pay for it,” Pachter said. “If you want to buy it at $30 because you think some fool will buy it at $40, that’s a Ponzi scheme.”
Mark Hackett, chief of investment research at asset management firm Nationwide, echoed concern about the risk involved.
“Even for those who get paid to do this every single day, timing the market is incredibly difficult,” Hackett told ABC News. “You have to be right getting in and right getting out.”
Still, both analysts said the latest spike in GameStop marks an example of the considerable role everyday investors can play in the price movement of individual stocks.
It is difficult to forecast the near-term outlook for meme stocks like GameStop and AMC, in which stock performance is divorced from a business’ financial health, they added.
“This shows the incredible power of the retail investor,” Hackett said. “But it’s incredibly unpredictable.”
(NEW YORK) — Live Nation, the parent company of Ticketmaster, revealed Friday evening that it was the victim of a cyber attack that compromised user data.
The company said in a filing with the U.S. Securities and Exchange Commission that it discovered an “unauthorized activity within a third-party cloud database,” on May 20 and promptly launched an investigation.
A week later, “a criminal threat actor offered Live Nation what it alleged was user data for sale via the dark web, according to the filing.
“As of the date of this filing, the incident has not had, and we do not believe it is reasonably likely to have, a material impact on our overall business operations or on our financial condition or results of operations. We continue to evaluate the risks and our remediation efforts are ongoing,” Live Nation said in its filing.
The investigation is ongoing. No suspects have been officially identified.
The FBI declined ABC News’ request for comment. The Cybersecurity and Infrastructure Security Agency (CISA) didn’t immediately respond to a request for comment.
The data stolen in the breach does not appear to be that serious, experts told ABC News.
No financial or medical information appears to have been stolen, according to the experts.
The experts said that customers can protect themselves from these types of online attacks by frequently changing their passwords, using two-factor authentication if available and keeping financial information private from any online solicitors.
The alleged data breach took place three days before the Justice Department and dozens of state attorneys general filed a lawsuit to break up Ticketmaster.
The suit alleged the company created a monopoly over ticket prices for live entertainment and hurt consumers.
Live Nation dismissed the suit’s allegations and said other factors are the root of higher prices, including scalpers and higher production costs.
(NEW YORK) — Orange production in two top growing regions has been plagued by diseased fruit and bad weather, a combination that’s prompted all-time high prices and left juice makers to consider other citrus varietals to supplement in the widely consumed breakfast beverage.
Along the citrus belt of São Paulo and Minas Gerais in Brazil, both factors have impacted orange production, significantly reducing overall crop yields, according to the latest forecast from Fundecitrus, the Fund for Citrus Protection.
The institution reported that Brazil, the world’s largest producer and exporter of orange juice, was set to produce 232.4 million boxes of oranges in the 2024 to 2025 season, a 24% decline from the same time last year.
“Should this production forecast hold true, this will be the second-smallest crop since 1988-1989,” the report stated.
Amid more frequent and intense heatwaves, Fundecitrus cited climate change as a key factor in the dramatic orange crop reduction.
Much like the South American agricultural powerhouse, orange output from Florida growers has also continually declined for U.S. production.
All Florida orange production is down 5% from April, according to the U.S. Department of Agriculture’s May citrus forecast.
As a result, the benchmark frozen concentrated orange juice futures have escalated to record highs, closing at nearly the double price per pound earlier this week on the Intercontinental Exchange.
“This is a crisis,” Kees Cools, president of the International Fruit and Vegetable Juice Association, said in a statement. “We’ve never seen anything like it, even during the big freezes and big hurricanes.”
The issues with orange production first made headlines in 2022 after a hurricane followed by a deep freeze devastated some Florida groves.
As a result of the shortages over the last three consecutive seasons, which also dwindled reserves of frozen product for blending, orange juice makers have been forced to consider incorporating other juices to supplement the citrus and help cut down on cost.
According to Cools, using “a different species of fruit” such as mandarins may be the only option “without touching the naturalness and image of the product.”
The IFU has considered starting the regulatory process that would allow the drink to contain citrus fruits other than just oranges, according to Cools. But that would require a legislation change in the Codex Alimentarius food standards code established by UN bodies and the U.S. Food and Drug Administration.
A sign is displayed on a wall at the former Anchor Brewing Company brewery on May 31, 2024 in San Francisco, California. (Justin Sullivan/Getty Images)
(NEW YORK) — Beer drinkers rejoice, Chobani CEO Hamdi Ulukaya has officially acquired Anchor Brewing Company in a move that will save the 127-year legacy business.
Craft beer fans everywhere collectively gasped last summer when the iconic San Francisco beer brand — fondly referred to as America’s first craft brewery — announced it would cease operations after generations of support.
Shepherd Futures, the family office of Chobani CEO, announced the acquisition of the assets of Anchor Brewing Company on Friday for an undisclosed amount, according to a press release.
“What an exciting time for San Francisco and Anchor Brewing,” Hamdi Ulukaya said in a statement. “Both are experiencing the magic of rebirth. I have fallen in love with this city, its history, grit and charm. I believe brands born in places like this are incredibly special and must be treasured, respected and loved.”
Anchor’s history dates back to the California Gold Rush in 1896 and is beloved by beer aficionados, best known for its Anchor Steam beer and renowned brewery and Public Taps taproom in the Potrero Hill neighborhood, which closed last July.
“San Francisco is at the heart of Anchor Brewing, and Anchor embodies so much of what makes this city great,” the Chobani founder continued. “I am humbled and excited to be part of this city and its rich community of people, who have a spirit that is special and unique. I have learned so much about Anchor and its role in San Francisco’s journey, and I look forward to doing whatever I can to support this amazing story of revitalization.”
Ulukaya said he intends to bring back the iconic brand that so many in San Francisco and around the world have loved for so long.
He also took the opportunity to share the news on Instagram, writing, “I am honored to work with the people of San Francisco to bring Anchor Brewing, this dream, back to life.”
