Onion oversupply eases as seasons change, marketers say - The Packer

Onion oversupply eases as seasons change, marketers say

05/10/2012 10:17:00 AM
Jim Offner

Onion marketers had plenty of product to showcase by the end of April. Perhaps too much, according to some.

Storage crop was still moving out of warehouses in the Northwest, while production was still peaking in Texas and just beginning to pick up in California, with New Mexico not far behind, marketing agents said.

Prices were reflected in the ample volumes.

“It’s all overlap,” said Steve Smith, owner and president of Las Cruces, N.M.-based National Onion Inc.

As of May 7, according to the U.S. Department of Agriculture, 50-pound sacks of yellow grano onions from Imperial Valley, Calif., received $9-10 for supercolossals, $6-7 for colossals, $5-5.50 for jumbos and $4.50-5 for mediums.

Red globe-type onions in 25-pound sacks received $16 for jumbos and $12 for mediums.

Onions from Columbia Basin, Wash., and Umatilla Basin, Ore., received $3-5 for 50-pound sacks of yellow hybrid jumbos, and $3-3.50 for mediums.

In new crop from the Lower Rio Grande Valley, 50-pound sacks of yellow grano onions were $10 for colossal, $8-9 for jumbo and $6-7 for medium.

Fifty-pound sacks of whites from the Lower Rio Grande Valley were $16 for jumbos and $10-14 for mediums.

Twenty-five-pound sacks of red globe-type onions from the same area were $18-20 for jumbo and $10-12 for medium.

Following the larger volumes from late 2011, prices continue to be weak even as quality is reported as good, according to the USDA.

Smith said prices had persisted in “flat, very low” ranges until recently.

“The transition into Texas has risen pretty high in whites and reds, which has been encouraging that there’s money to be made on reds and whites,” he said.

The remaining storage volumes mitigated his excitement, though, he said.

“Texas seems to be pushing them out, but the price can’t seem to go up,” he said.

He added the situation was bound to improve as Texas gave way to California in early May.

“You’ll see onions coming from more places, but there won’t be as many available when storage is cleaned up,” he said.

Chris Woo, sales manager in the Ontario, Ore., office of Idaho Falls, Idaho-based Potandon Produce LLC, said his storage supplies were just about exhausted.

“We’ve had adequate production from all areas, and other areas we compete against,” he said.

“The economy has had a limited role.”

Weather has sparked a few worries in certain areas, Smith said, citing spates of 60 mph winds in New Mexico as potentially problematic.

“It doesn’t help the crop any, but it hasn’t done any damage, really,” he said.

By mid-May, prices were expected to have risen to more acceptable levels, Smith said.

“You should have things sorted out, with a minimum amount of storage onions left,” he said.

A few weather and disease problems in Texas, including some heavy rains, cut into the Texas crop, said Marty Franzoy, manager and owner of Skyline Produce in Hatch, N.M.

“Here, it has not been too bad, but in other areas, it’s been drastic — hail and lots of rain and mildew and disease in Texas,” he said.

Tommy Whitlock, salesman with Pharr, Texas-based Grasmick South LLC, said his supplies were adequate but demand had been relatively light.

“The biggest problem is there hasn’t been a big demand because too many areas are going at one time,” he said.

Oversupply won’t be anything new this year, said Wayne Mininger, executive vice president with the Greeley, Colo.-based National Onion Association.

“There were periods during this last winter when prices were very low because the supply chain was full,” Mininger said.

That problem is on its way to being corrected, Mininger said.

“Prices have rebounded some and there’s a feeling of optimism among the guys that are producing and marketing the crop,” he said.

The outlook was positive, “at least for the short term,” he said.

Scott Adams, owner of Hatch-based Adams Produce Inc., shared that optimism.

“It looks better than a month ago,” he said in late April.



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