CALIFORNIA FLOODING HIKES PRICE OF PRODUCE

AMY I. STICKEL Additional reporting: JOANNA RAMEY

SACRAMENTO, Calif. -- Produce prices have begun rising with rain and flood levels in California, doubling for some commodities at wholesale amid concerns that further flooding could worsen the situation.

Price hikes were showing up at retail last week and industry executives debated how long the situation might last. The U.S. Department of Agriculture predicted that shortages and price increases would be most prevalent next month at retail. Shortfalls may also have an effect on certain value-added fresh food products and frozen items, according to observers.

When interviewed by SN early last week, Dave Kranz, spokesman for the California Farm Bureau here, said total damages to state crops had reached $363 million.

The bureau's most recent pricing

survey, March 17, shows wholesale prices for a carton of head lettuce reached $20 on that date, double what they were before rains, high winds and flooding hit California earlier this month, according to Kranz.

In addition, between March 13 and March 17, carton prices for cauliflower jumped from $13.75 to $21.50, and broccoli went from $14.50 to $17.75, Kranz said.

John Love, a produce economist with the USDA in Washington, said California is the only supplier of lettuce to U.S. stores in the early spring and the floods virtually wiped out the crop. What lettuce can be harvested will be a hot commodity, sought not just by supermarkets, but by restaurants and other food services, he said.

"There is a lot of competition for what lettuce remains," said Love, noting that modest lettuce harvests in mid-Atlantic states might help to offset the California lettuce losses. Love said the replanting of lettuce, broccoli and cauliflower will help to ease the situation beginning in about a month's time. Strawberries were also hurt by the flooding, although about 2,500 acres of damaged strawberries should be able to bear new fruit by late April, Love said.

Observers said produce shortages could create headaches for frozen food supplies down the line. Bea Slizewski, director of corporate communications for Comstock Michigan Fruit, Rochester, N.Y., said that company's Mexican sourcing could be affected.

"We do source some of our broccoli and cauliflower out of Mexico," she said. "If supplies in California are down, then some of those who traditionally source out of California will be trying to get supplies out of Mexico. So, increased demand could affect us."

The flooding's pricing effects are already trickling down the pipeline to retail, according to industry executives.

Frank Gillespie, corporate produce director for Roundy's, a wholesaler based in Pewaukee, Wis., said there has been a "drastic" change in retail prices for lettuce, broccoli, leafy vegetables and cauliflower.

"We have substantial increases in retails here," he said. He declined to offer specific figures. "We've put a halt to promotional activities," he added.

However, Gillepsie was notably optimistic about the prospects. He said he expected last week to be the worst in terms of prices and shortages, and that the outlook should improve by the end of March.

William Vitulli, vice president of community and government affairs for A&P, Montvale, N.J., was less optimistic about retail prices.

"The situation hasn't peaked yet, and the outlook isn't good," he said. "We are really in a wait-and-see mode.

"As costs go up, we have to pass those increases along to the consumers," he said. "It's bad for the consumer, it's bad for us and it's bad for the farmer."

Clark Wood, corporate produce specialist for the Salt Lake City division of Associated Food Stores, said prices in his region were creeping upward last week on commodities already in the market, and were expected to continue to climb.

"Without exception, broccoli, cauliflower and lettuce have been heavily affected," he said.