Texas onions looking at 'perfect storm'
Weslaco, Texas-based grower-shipper Onion House LLC, which ships mostly Mexican and Texas onions, is now in its 23rd year of operation. The company has about 500 acres of onions in the Rio Grande Valley, according to Owner Don Ed Holmes.
The Texas onion season typically starts at the beginning of March. This season, however, will begin a few weeks later than usual," Holmes said.
“Our season will start in mid-March and end in mid-May. The crop is a little less than a year ago because we have some water issues,” Holmes said. “The volume of onions coming out of South Texas will be lower this year.”
Texas isn’t the only state with lower volumes, though.
“On the back end of the Texas deal, we compete with Georgia and Imperial Valley [in California]. Sounds like they could be lower due to weather issues,” Holmes said.
When volume goes down, prices go up. When demand goes up, prices go up, too. That’s good news for shippers.
“This is probably going to be one of the better years we’ve had in a long time. The market is so high because other states have light supplies,” Holmes said. “Plus, people are getting back to restaurants and grocery stores. The demand has increased as a result. It’s almost a perfect storm for Texas onions.”
With a hopeful market ahead for Texas onions, Holmes also feels hopeful that labor and freight issues will not be as problematic as last season.
“The labor situation looks like it’s going to be much better this year,” Holmes said. “It’s been hard to find and keep people. Now that some of the social programs are ending, I think people will come back to work and things should go a lot smoother.”
Holmes expects freight rates to come down to a new normal. He explains how the freight situation developed over the last few years.
“When freight got really cheap several years ago, truckers left because they couldn’t make enough money,” Holmes said. “Then, gas prices went up, making it harder to make money in trucking. It made for a hard season last year. We could hardly get our onions trucked last year on top of the price more than doubling.”
Transportation may not be as big of an issue this year, but it’s not solved. For now, that’s good enough for Holmes.
“Even though this year looks good, we know it’s unlikely to happen again next year. That’s what I’ve learned from 45 years in this business,” Holmes said.
