Onion markets should strengthen

03/06/2012 04:47:00 PM
Andy Nelson

The combination of inclement weather in Mexico and Texas, a smaller Texas crop and the end of South American imports are expected to strengthen sluggish sweet onion markets in March.

Rain and fog in Mexico and Texas are reducing onion volumes and should give prices a boost, said Don Ed Holmes, owner of Weslaco, Texas-based The Onion House.

Markets have been so depressed, with per-box prices as low as $4, that many Mexican growers chose not to treat fields hit hard by rain with fungicides to prevent disease, Holmes said.

That reduced Mexican volumes even more, he said, and with 15-20% of the early Texas crop lost to rain and other inclement weather, markets were looking up the week of March 5.

“The market’s starting to react, and I think it will climb back out over the next two weeks,” Holmes said March 5.

On March 6, the U.S. Department of Agriculture reported prices of $6 for 50-pound sacks of jumbo Mexican granos, down from $7 last year at the same time.

On March 5, Peru, Chile and Mexico were all still shipping, and Texas was slated to begin later in the week, said John Shuman, president and director of sales for Reidsville, Ga.-based Shuman Produce Inc.

“There are a lot of sweet onions available right now, and everything looks good,” Shuman said.

That said, Peru was scheduled for an early March finish, and Chile is expected to follow suit the week of March 19 or the week of March 26, Shuman said. The Mexican sweet deal will likely wind down by late March or early April, Shuman said.   

Texas volumes should begin hitting in earnest in April, Holmes said. Early reports on quality and size were good, he said. Texas volumes are expected to be about 30% lower than last year, Holmes said, which could further buoy markets as the deal progresses.

About 4.14 million cwt. of Texas spring onions shipped in 2011, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service.

The Texas deal is running a week or two late for Shuman Produce, with volume shipments expected about March 15-20, Shuman said. An early start to the Vidalia deal, meanwhile, should mean abundant volumes of domestic onions beginning in early to mid-April, when Vidalia shipments begin ramping up, he said.

“Retailers will be in a very good position to promote, and there should be favorable pricing,” Shuman said. “There are going to be a lot of onions, but I think demand will be good.”

While it was still early, Vidalia quality in early March looked outstanding, said Marty Kamer, vice president of Greencastle, Pa.-based Keystone Fruit Marketing Inc.

Mexican late-season volumes were lighter than usual this year, Kamer said. The Mexican deal will wind down in April, he said, and steady movement of Northwest storage product should mean an April end to that deal, too, clearing the way for domestic sweet onions later in the spring.



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