Market prices keep suppliers smiling as Peruvian deal kicks in
Onion markets have had suppliers smiling throughout 2019, and the happy mood is bound to continue as the Peruvian deal kicks in this fall, marketers say.
“Actually, it’s a pretty good market because the national onion market is pretty good,” said Delbert Bland, president of Glennville, Ga.-based Vidalia onion grower-shipper Bland Farms LLC, which grows its own sweet onions in Peru. “We’ll be done with Vidalias early in September, and that’s in the low $20s now.”
The high market will “entice the price” for Peruvian product, Bland said.
According to the U.S. Department of Agriculture, 40-pound cartons of jumbo-sized yellow granex Vidalia sweet onions were $21-22, as of Aug. 23. The same item was $15-18 a year earlier.
That’s good news for suppliers, Bland said.
“I see a decent market is $18 f.o.b.,” he said.
A “solid” sweet onion market should continue into the fall Peruvian season, said John Williams, sales director with Lyons, Ga.-based Vidalia onion grower-shipper L.G. Herndon Jr. Farms Inc.
“It has been for the last four months,” he said in mid-August. “It’s been at the right place, and I think we’ll go into that with prices in the low $20s for a 40-pound carton.”
That likely won’t change, once the Peruvian deal hits full stride, Williams said.
Demand for sweet onions is up, and that dictates the market, said Mike Blume, sales and marketing director with Greencastle, Pa.-based Keystone Fruit Marketing Co.
“As long as there is demand, the market will stay strong,” he said. “We have some strong promotions, and we’ve got a lot of retailers promoting the onions. As long as we have plenty of promotions through the holidays, demand stays strong.”
Weather patterns over much of the last year across many global onion-growing regions led to shortages, which fed higher markets, said Barry Rogers, who owns a Grant, Fla.-based consultancy, RogersAgro, Inc.
“I’m not at all sure the onion market will remain strong through the whole season,” he said. “We had a true shortage for the last 12 months. We are in a new growing cycle. We will know more in late October.”
Higher markets are helpful in a deal that involves “fixed costs” to grow, transport, import and store product, said Mark Breimeister, sales director with Idaho Falls, Idaho-based Potandon Produce, which markets Peruvian sweet onions under the Green Giant label.
Other markets outside the U.S. factor into the deal, as well, but sizing assures that the U.S. will have ample supplies, Breimeister noted.
“They export product to Europe, although the demand there is the large medium, while the demand here is the jumbo,” he said. “I think the European market doesn’t necessarily affect what goes on here. We take jumbos and colossals.”
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