RAIN STILL DAMPENING OUTLOOK FOR PRODUCE

SACRAMENTO, Calif. -- Supermarket chains can count on an unstable market for California produce at least through May, according to the latest accounts of damage from the spring rains in major growing areas.Sources from the California Farm Bureau here, as well as other industry observers, said revised estimates of the damage offer some better news regarding major salad crops such as lettuce, broccoli

SACRAMENTO, Calif. -- Supermarket chains can count on an unstable market for California produce at least through May, according to the latest accounts of damage from the spring rains in major growing areas.

Sources from the California Farm Bureau here, as well as other industry observers, said revised estimates of the damage offer some better news regarding major salad crops such as lettuce, broccoli and cauliflower. However, the damage for strawberries and almonds is now estimated to be far worse than was predicted last month by the state department of agriculture.

Overall crop damage estimates have nearly doubled, said Dave Kranz, spokesman for the California Farm Bureau. At the end of March, with water still standing in some fields, damage estimates were set at $666 million statewide, he said.

The news is improving for some important commodities, however. "There's going to be a staggered return to the market for some of these crops," Kranz said.

Damage to the head lettuce crop, originally set at $67 million, has been revised to $40.6 million, Kranz said. Broccoli damage estimates, originally set at $65 million, have been lowered to $15.5 million. Cauliflower damage has been revised to $10.6 million, from $65 million, said Kranz. Those numbers indicate supplies of those commodities should recover more quickly.

Almonds and strawberries are another story. Originally, almond damage was set at $33 million, a figure that has now rocketed to $208.4 million. Strawberry damage estimates have more than doubled, to $63.1 million from $29 million. Damage to the almond crop is particularly severe, since losses of almond trees will be felt far into the next season, he said.

Retail prices for affected major commodities, meanwhile,

are expected to remain at higher than normal levels for the time being, according to retailers.

"Prices for head lettuce won't be normal for probably about another six weeks," said Mike Genuardi, director of produce operations for 27-unit Genuardi Super Markets, Norristown, Pa.

Genuardi said wholesale prices for lettuce were coming down in early April, although they were still about twice as high as normal for this time of year.

Fred Romley, produce buyer and merchandiser for Bashas' Markets, Chandler, Ariz., said that prices are starting to stabilize, but not normalize.

"It's starting to taper off now," he said. "I don't think it will get down to what it would have normally."

Romley said he usually puts head lettuce on ad at three for $1. He won't do that this spring, he said.

However, he is putting lettuce on ad for 89 cents a head in mid-April. "I'm feeling pretty confident in the market," he said.

Broccoli and cauliflower have both come down drastically in price, he said.

Romley and Genuardi both said they took losses by capping head lettuce prices, Bashas' at $1.79 a head and Genuardi at $1.99.

"I'm not very optimistic that you'll see retail prices lowered anytime in the near future," said Rusty Horton, manager of the Central California Lettuce Producers Cooperative in Salinas, Calif. The Salinas area, which is a major producer of lettuce and other commodity vegetables, was one of the areas hardest hit by the March rains.

Horton said wholesale prices are the highest she's ever seen, fluctuating from the low $30s to high $40s for cartons of lettuce. At press time, prices were ranging from $32 to $35 a carton, she estimated.

Horton said most growers and shippers are still calculating the long-term damage, in terms of both dollar and acreage loss. She said production is about half of what it normally is this time of year.

"I think production will be down through the fall," she added.

Horton said she expected retailers, meanwhile, will keep prices as high as they can.

"Retailers have found the consumer will pay a certain amount, and I think once retailers have found they can get that amount, they're reluctant to lower the price," she said.

Head lettuce was retailing for $1.99 in the Sacramento area, and Kranz predicted that to be one of the lower prices in the United States, since Sacramento is close to the production source.

Indeed, across the country in New York City, iceberg lettuce was retailing for $2.29 a head in some stores, for the second week in a row.

Commodity vegetables are not the only produce being affected. Ken Lanhardt, director of produce and floral operations for the 13-unit Georgia division of Cub Foods, based in Lithia Springs, Ga., said one prepackaged salad manufacturer has asked that he not run products on ad, since prices are so high. "They have discouraged ads," said Lanhardt.