It is 3:30 a.m. and most of Washington is still asleep, but the "produce city" that supplies about half of the area's fresh fruit and vegetables is humming.

Miniature hydraulic lifts dart among the corridors of crates filled with everything from apples to zucchini on the loading platforms at the massive wholesale market near here.

The heavy-sweet smell of cantaloupe hangs in the air as buyers cluster to negotiate purchases for scores of restaurants like Chez Camille and The Greenery, hotels like the Hyatt Regency and Capital and Washington Hiltons, roadside stands and co-ops, stores ranging from Magruder's to mom-and-pop operations, and even huge chains like Safeway if it has to fill special orders.

The deals they make here and in the back rooms of the concrete-block warehouses -- hundreds are struck every day in this obscure 38-acre Howard County compound -- help determine the food bills for 6 million consumers in the District of Columbia and parts of Maryland, Virginia, Pennsylvania, Delaware and North Carolina.

The food cascades through here -- 4 1/2 tons of potatoes in one month, for example; 500,000 tons of produce for all of 1980. All of it is brought in by rail and truck, moving through 101 warehouses and 30 wholesale vendors who lease space from the Maryland Wholesale Food Authority, a state agency that developed and maintains the premises.

The market is a miniature city, with traffic jams from trucks waiting to load and unload, and a security force to keep order and prevent theft. It even has regulations dictating such things as the 3 a.m. opening time for buyers. Those who arrive early wait in line outside the market until the guard raises the entrance gate.

Walter Nicholson, a gray stubble on his face and a ring of keys dangling from his belt loop, was seventh in line on a recent morning. "We got here at 2:15 a.m.," says Nicholson, who drove with his wife from their home near Laurel to buy nectarines, plums and tomatoes for their roadside stand.

They always go to market early because "otherwise, the vegetables are all picked over," he says.

Mrs. Nicholson, wrapped in a red sweater to protect her from the damp morning chill, says they grow much of the produce they sell at their stand, "but not enough has come in yet, so we buy some here as fill-in for what we have."

At another vendor's station, Greg Ernst is squeezing tomatoes to see if they are fit to join the array of fruit already stashed in his black van for the trip back to his Ernst Market in Camp Springs.

And at yet another station, vendor Tony Testoni is maneuvering around boxes of lettuce, scribbling orders on a receipt pad and dodging the honking miniature lifts as he shouts like a short-order hash-slinger above the clamor: "Give him a bag of carrots" (a 50-pound sack), a "lettuce and a large onion."

Produce sold by Jessup wholesalers comes primarily from the West Coast and the South. Less than 20 percent is from Maryland and Virginia farms, according to market records.

A breakdown based on one 10-day period in July showed that 17 percent came from Maryland and Virginia; 35 percent from California and 48 percent from other areas such as Pennsylvania, New Jersey, Texas, Ohio, New York, Washington state, Idaho and the Carolinas.

The source of supply varies according to the time of year, however.

During the winter, about 50 percent of the market's fruits andvegetables comes from Florida, 35 percent from Texas and Mexico and 15 percent from California, according to wholesaler Lou Weinstein. During the summer, when it is too hot for most Florida production, Jessup increases its purchases from West Coast packers.

Most of the Washington-area produce that does not move through Jessup comes directly from packers to the major supermarket chains -- Giant, Safeway, Grand Union, A&P -- but they, too, shop at Jessup when their own shipments are insufficient.

Maryland agriculture officials said local farmers have increased sales to the Jessup market because of improvements in the packaging of local produce. Jessup wholesalers, because of the volume of business, need boxed and crated foods to withstand the rigors of movement from truck to warehouse to retail buyer. Efforts are now under way to help farmers do a better job of packaging and improve their sales opportunities.

Built at a cost of $9.2 million on what was once state prison farmland, the market opened in 1976. It is one part of the 398-acre Maryland Wholesale Food Center, which now includes the Giant Foods Inc. grocery warehouse, Smelkinson Brothers' frozen foods distribution center, Keebler Co.'s warehouse and atrucker's inn.

Efforts to create the food center date back to the 1960s when Baltimore wholesalers saw they soon would be displaced from theirwaterfront locations by the urban renewal program for the Inner Harbor and by highway construction plans.

After a slow beginning, the market has leased all available space and 18 wholesalers are on the waiting list trying to get into the two long terminal buildings.

Annual sales now total about $150 million, a five-fold increase since the opening year, according to Weinstein. The market employs 320 workers, from warehouse laborers to administrative secretaries, and has become one of the 25 most important centers of its kind in the nation.

Supply and demand largely dictate the wholesale prices in the big wholesale markets like Jessup. To help farmers in distant growing areas keep track of what is happening at Jessup and in the other 24 major terminal wholesale markets around the country, the U.S. Agriculture Department keeps a representative on duty at the markets to talk to buyers and sellers about their latest deals and then compile a daily market price report.

Richard S. Hallinger, the USDA man in Jessup, publishes a one-page summary each weekday and makes tape recordings that can be heard by dialing a special telephone number. Jessup price information also is sent by teletype to the other markets staffed by USDA. They include Philadelphia, Atlanta, New York and Chicago.

Hallinger says he knows the buyers and sellers do not always tell him the whole truth when he asks them about prices. As a seasoned produce price reporter, he says he has learned how to identify price trends by talking to the wholesalers and their customers.

"I listen to both sides," he said, "and I know the price is somewhere in between."