Onion market on the upswing as California harvest looms

by Tim Linden | April 06, 2012

The California onion deal includes a mix of varieties. (Photo courtesy of the National Onion Association)

With Texas moving toward full production and California’s harvest on the near horizon, the onion market is finally showing some life with some upward price movement.

Ken Stewart, sales and operations manager for L&M Cos. in Raleigh, NC, who specializes in onions, said the sweet or yellow onion market “has been really, really tough all winter. The market has been at historic lows for a long time, but we are seeing signs that it is rebounding a bit.”

He told The Produce News on Wednesday, March 28, that the “white market is good right now, the red market is strong and the yellow market is doing OK. We’re breaking even, which is much better than it has been.”

Don Ed Holmes of The Onion House LLC in Weslaco, TX, said the culprit over the past several months “has been an oversupply with movement not being as good as we hoped.”

Mr. Holmes said Idaho and Oregon had big crops and Mexico came in early, making the January, February and early March volume greater than sales. “The silver lining is that all that volume has passed through and it looks pretty good from here on out.”

On Friday, March 30, he said Mexico’s production was winding down and appeared as if it would end early. Mr. Holmes said the yellow market was up to $8 for a 50-pound sack and $10 for a 40-pound carton of larger sweet onions, “and we think it will go higher next week.” He said very small onions were still at a bargain price but he expected that to strengthen as well. He characterized the white market as “very good” and the red market as “red-hot.”

Mr. Holmes said the Southern California district, which is the next area to come into production, did not plant a lot of reds or whites this season so the strong market for those two categories should only get better.

The longtime Texas grower-shipper also opined that both the economy and the winter export market for the more voluminous yellow onion exacerbated the marketing problem this year.

“Movement just hasn’t been as good as expected, so I have to think the economy is playing a role,” he said. “The export market to the Pacific Rim has been OK but we [the industry] needed a very strong export program this year and we just didn’t get it.”

But Mr. Stewart reiterated that as California’s Imperial Valley prepares for the beginning of its two-month harvest window in late April, the marketing situation looks good. He said the market should continue to improve throughout April putting those grower-shippers in good shape as they dig their first onions.