Mexican sweet onion volumes low, should increase soon - The Packer

Mexican sweet onion volumes low, should increase soon

02/10/2010 10:32:40 AM
Andy Nelson

Mexican sweet onion supplies were light the first half of February, but shippers expected volumes to increase and prices to adjust accordingly later in the month.

“Mexico’s going fairly well — there’s some rain right now, but we’ve still got supplies,” Delbert Bland, president of Bland Farms LLC, Glennville, Ga., said Feb. 9 “We hope it clears up and we get some more volume in the next week or so.”

Volumes the second half of February could even make up ground for some of the lighter shipments season-to-date, Bland said.

Supplies have been tight in the U.S. also because of very strong domestic demand for sweet onions in Mexico, said Don Ed Holmes, owner of Weslaco, Texas-based The Onion House LLC.

Onions have been selling for $14 in Mexico, which is equal to or more than they’re selling for in the U.S., Holmes said Feb. 8. With the added costs of shipping to and selling in the U.S., the choice for Mexican grower-shippers is an easy one, he said.

“$14 in Mexico looks a lot better than $14 here,” Holmes said.

On Feb. 9, the U.S. Department of Agriculture reported a price of $16 for 40-pound cartons of colossal and jumbo sweet onions from Peru, down from $24-26 last year at the same time.

In a typical year, about 5-10% of the Mexican sweet crop stays in Mexico, Holmes said. This year, it could be as much as 50%.

That said, the Mexican market can change rapidly, he said. In the short term, shippers could be targeting the Mexican market for three or four days, switching to the U.S. market for three or four when prices spike, then switch back again when they fall, Holmes said.

By March, though, the deal should switch back to business as usual, he said, with more regular volumes and steady pricing.

With lower volumes early in the deal, early February prices could theoretically have been higher than they are, Bland said, but the company didn’t raise prices on regular customers “just because of rain,” Bland said.

On Feb. 9, he quoted prices in the $14-16 range. Those would likely “come off a little” when volumes ramp up later in the month, Bland said.

Quality and size profile on the Mexican crop were good, with a mix of about 60% jumbos, 30% colossal and 10% mediums ex-pected when volume shipments start hitting, Bland said.

Holmes said there “mostly jumbos, very few mediums” in early February.

Next on the sweet onion schedule for Bland Farms is the com-pany’s Texas deal, which will likely begin about March 10, Bland said.

“Texas looks real good,” he said. “I think we’re right on course.”

But Holmes said that because of winter temperatures that have averaged close to 10 degrees lower than normal, the start date in Texas could be closer to March 20-25, about 10 days later than normal.



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