Drama in onion deal

11/08/2013 10:15:00 AM
Andy Nelson

Andy Nelson, Markets EditorAndy Nelson, Markets EditorHere’s a scene from a Cormac McCarthy novel, or maybe a Coen Brothers movie: a man crosses the border with a briefcase full of cash, returns with the “product.”

We use the term “product” in the fresh produce industry quite a bit as a synonym for apples or potatoes or beans or whatever commodity we’re talking about, so I’ll use that as a segue into the McCarthy/Coenesque quote I scribbled down recently while talking to a shipper.

“In western Colorado, the Mexicans have been showing up with cash and buying up all the whites.”

Now, I should just stop right there and leave the rest up to your imagination. Kind of like these books my kids check out that give you an illustration and an opening sentence, and you write the story.

But the stories proceeding from that quote could wind up in some pretty dark places, so I’ll just kill the suspense and say that the subject was onions.

The speaker was Don Ed Holmes — I’m sorry, permit me just one more aside: is “Don Ed Holmes” not the perfect McCarthy/Coen-esque name? — and he painted that extremely vivid image of Mexican buyers storming up the Heartland toward Colorado in search of onions to give me a sense of the state of the storage onion market this fall.

“It’s an interesting time to be in the onion business,” said Holmes, owner of The Onion House LLC, Weslaco, Texas.

I guess so, with prices reaching into the mid-$20s for a 50-pound sack and higher, as buyers burn through the available whites. The past two years, they’ve been closer to $10 at this time of year.

When the whites run out, they’ll start gobbling up the medium yellows, then the jumbo yellows, likely sending those markets up and up, Holmes said.

Through Nov. 3, about 50.3 million pounds of onions had shipped from Colorado year-to-date, down from 83 million pounds last year at the same time, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service.

Year-to-date U.S. and import totals also are down from last year.

Colorado and import volumes also were lower for this time of year than they were in 2010 and 2011. U.S.-wide volumes were higher in 2011 but slightly lower in 2010.

Abroad and at home

It’s not just the Mexicans who are buying.

“Utah onions are going to Long Beach, then on to Central America.”

OK, now I have an image of a Utah onion peeling off his ski jacket, strapping on some shades and pointing the Trans Am west. More “National Lampoon’s Vacation” than “No Country For Old Men.”

In addition to strong Latin American demand, states like Washington were shipping a lot of onions to the Pacific Rim.

But it wasn’t just people in other countries clamoring for U.S. storage onions.

“The domestic business is just as good,” Holmes said. “And we’re dealing with less supply. Business is really good, and movement is really good.”

Demand for sweet onions also is strong right now. Importers told me they wish they had more Peruvian sweets to keep up with demand.

Mexico could provide some relief when growers start shipping sweets in January, but the 2014 Texas sweet crop that follows on Mexico’s heels could be down because of scarce water supplies and, Holmes said, because more Texas growers are switching from onions to higher-margin cotton.

“Between Mother Nature and Big Cotton, those poor little onions don’t stand a chance.”

OK, that’s my quote. “Little House on the Prairie,” I guess.

anelson@thepacker.com

What's your take? Leave a comment and tell us your opinion.



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left

Feedback Form
Leads to Insight