HURRICANES CAUSE PRODUCE PRICE HIKES

TALLAHASSEE, Fla. -- Wholesale tomato prices have more than doubled, fresh grapefruit prices are likely to do the same, and produce buyers are facing disrupted supplies of these and other items as a result of Florida's recent spate of hurricanes. Growers and produce buyers agreed supply may not return to normal until early 2005.Some retailers have taken a proactive approach to letting customers know

TALLAHASSEE, Fla. -- Wholesale tomato prices have more than doubled, fresh grapefruit prices are likely to do the same, and produce buyers are facing disrupted supplies of these and other items as a result of Florida's recent spate of hurricanes. Growers and produce buyers agreed supply may not return to normal until early 2005.

Some retailers have taken a proactive approach to letting customers know why they're seeing higher prices in the aisles.

"There are lots of things being affected," said Brian Gannon, director of produce and floral for Big Y, a Springfield, Mass.-based chain of 49 stores. "In addition to tomatoes, there have been rising prices and low supply of most of the soft vegetables from the East Coast, such as peppers, cucumbers and yellow squash. We're letting customers know the reasons, reminding them about the hurricane damage by putting signs up in our produce departments. But the feeling is that there's not going to be much relief until after January."

Florida's growers have suffered extensive losses on crops ranging from peppers to blueberries, said Barbara Wunder, spokeswoman for the Florida Fruit and Vegetable Association, Orlando. As far north as Virginia, tornadoes spawned by Hurricane Ivan caused significant crop losses in apple orchards. Growers throughout the East Coast have struggled to cope with the heavy rains left in the aftermath of the storms.

Notably, while the Sunshine State is better known for its citrus industry, it also produces about 90% of the tomatoes consumed in the United States between October and May, according to the Florida Tomato Committee, Orlando.

"The hurricanes have caused significant increase in prices for produce, and not just for fresh citrus," said Denis Bridwell, produce supervisor for Ragland Bros., Huntsville, Ala. "Tomatoes especially have been hard hit. We're trying to educate our produce managers and have them talk to our customers. That's about the best you can do.

"It's probably going to be early 2005 before we see any increase in supply," he added, noting that heavy rain in Northern California had been causing problems with some crops there as well.

Arriving in August before many growers had begun planting tomatoes, Hurricane Charley had little impact on the state's crop. However, even for the growers who managed to avoid a direct hit, the powerful wind and rain delivered in quick succession throughout the state by hurricanes Frances, Jeanne and Ivan destroyed seedlings and ruined pre-planting activities, costing individual growers hundreds of thousands of dollars.

The resulting combination of planting delays and damaged crops could lead to the loss of more than 50% of the state's tomatoes. Prices have already begun to balloon in anticipation. Wholesale prices for 25-pound cartons of tomatoes from Mexico and Virginia were hovering between $23 and $25 last week, up from $10 during the same period a year ago, according to the U.S. Department of Agriculture.

"The tomato crop that would typically come into production in late October or early November is coming in two weeks later than normal, and it's going to be much smaller than normal," explained Reggie Brown, president of the Florida Tomato Committee. "It will probably be almost Christmas until we get back to what we'd view as normal production."

Steep spikes in the price of fresh grapefruit are likely as well. The U.S. Department of Agriculture last week released its official estimate of crop damage from the four hurricanes, indicating that Florida's grapefruit crop would be down 63% from last season as a result of damage caused primarily by Hurricane Jeanne.

As a result, prices may start this season at $15 per wholesale carton -- twice what the fruit commanded last year -- Tom Spreen, agricultural economist at the University of Florida, said in a published report prior to USDA's estimate. Spreen could not be reached for additional comment.

USDA also said in the estimate the state's orange crop would be down by 27% this year, to 176 million 90-pound boxes.

SN reported earlier that the damage caused by Hurricane Charley was unlikely to raise orange juice prices due to flat demand, low commodities prices, and large existing inventories.

The damage caused by the three subsequent hurricanes has resulted in the smallest crop estimate in a decade.

Yet commercial processors have a 40-week supply of frozen and chilled concentrate on hand, which should ease or possibly prevent a wholesale price spike for conventional orange juice brands.