May 27, 1995 in Nation/World

Wet Spring Boosts Produce Prices California Flooding Blamed For Big Hike In Cost Of Veggies

From Staff And Wire Reports
 

Patricia Murrell had her shopping cart half-loaded, but one item was taking more than its share of space.

Murrell, who works as a housekeeper in Manhattan, was buying a head of iceberg lettuce. Price: $2.99. Its expense compared with other foodstuffs was stark. Murrell’s same $2.99 would have bought a pound of London broil, 1 1/2 pounds of hamburger and almost 2 pounds of chicken.

“My friends are always complaining I eat too much salad,” she said, “so I worry about the price of lettuce and tomatoes.”

From the commodity pits of Chicago, where traders buy and sell huge amounts of food, to grocery store companies and everyday shoppers, more than a few people are noticing it’s getting more expensive to eat.

Torrential rains blanketing central California in February and March caused flooding and an estimated $652 million in crop damage. That is being reflected in higher produce prices at the grocery store today.

According to components of the government’s Consumer Price Index, fresh fruit and vegetable prices in April were 19 percent higher than a year ago. Lettuce was up a stunning 162 percent from last April and tomatoes were up about 34 percent.

In contrast, overall consumer prices are rising at a 3.6 percent annual rate, adjusted for seasonal variations.

“Prices are terrible, aren’t they?” said Doug Grodt, produce supervisor at Yoke’s Pac ‘n Save, a Spokane-based supermarket chain. “We sure hope they cool off.”

There are signs, Grodt says, that produce prices are dropping as new crops get harvested. Iceberg lettuce, which once commanded $2.99 a pound, currently can be found in some Spokane stores for $1.49 a pound. Leaf lettuce is selling for as little as two for $1.

“Relief is in sight,” he said.

A sustained jump in food prices would be a first in many years, said Yoke’s chief financial officer Jim Clanton. Food prices have been flat since 1990, and he doubts that the produce shortage will spark a long-term trend of higher food prices.

“We don’t pay that much attention to these seasonal fluctuations,” Clanton said. “We know that if they spiked up, they’ll soon reverse themselves.”

While many are aware of the California flooding’s impact, storms now hitting the Midwest bode poorly for the grain and soybean crops that will be harvested this summer and fall.

Prices of futures contracts for those commodities, which are simply agreements to buy and sell large amounts of the foodstuffs at a future date for a specified price, have been rising as the weather has worsened. Rain and unseasonably cold weather could hurt the crops by harvest time.

“It means an upward pressure on food prices in the grocery stores,” said Richard Feltes, director of commodity research at Refco Inc. in Chicago. “So people should hope for a return to normalcy in their summer weather.”

Increased prices for grain and soybeans could translate into higher costs for goods like bread, breakfast cereals and items like salad oils, which often use soybean oil as a component.

Higher corn prices initially would mean cheaper meat, since producers will tend to send their animals to market rather than pay higher prices for corn, which is used as feed, Feltes said. Eventually, however, prices would rise as supply declines.

Meat prices this year have been a spot of sunshine amid the clouds.

As of April, overall meat prices were a little less than 1 percent lower than a year ago, with bacon down 5 percent, sirloin steak down more than 1 percent and whole chicken up greater than 1 percent.

Annette Clauson, an agricultural economist with the Department of Agriculture in Washington, said the relatively cheap meat prices are due mostly to large supplies created in reaction to strong export demand last year.

“Most meat items are really a good buy this year,” she said.

A BLT at the corner diner, thus, might be more cheaply made today with extra bacon and less lettuce and tomato.

No one, however, has suggested higher prices will keep them from tossing their salads, steaming their vegetables or packing fruit in their lunch bags. Shoppers aren’t even shying away from lettuce.

“You have to eat, you know,” explained New York shopper Margaret O’Connor.

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