Dr. Greene's Answer
Orange smudges are usually urate crystals. They are normal, soft, like tiny cubes of Jell-O — sometimes smushed, and sometimes confused with drops of blood in the diaper.
These are more common when kids are a bit dehydrated, but they can show up in healthy babies at anytime.
It just comes from having lots of urate in the urine. Sometimes orange food or some medications (such as rifampin or phenazopyridine (Pyridium)) can also be the culprit for orange smudges in the diaper.