Onion growers see impact of inflation
The onion category has not escaped the perils of inflation that have challenged the produce industry as prices of inputs and other necessities have skyrocketed over the past couple of years.
“It’s tough,” said Josh Frederick, CEO at Snake River Produce, Nyssa, Ore.
“There isn’t anything that has become cheaper to offset any cost that continues to climb,” he said. “Everyone thinks I have lost my mind when I say we need to charge a minimum $15 a sack on jumbos because the cost of goods to grow and pack onions today just continues to exceed.”
The impact is especially severe in Oregon, he said, “with labor issues and such.”
Costs at Snake River Produce were up nearly 40% last year compared to the year before, he said. So far this season, costs are up 45% and counting.
Related news: Onion volume expected to increase after slow start
Jeff Brechler, salesman at Edinburg, Texas-based Little Bear Produce, said he has seen some overall improvement as the COVID-19 pandemic winds down.
“We’re not dealing with as many supply chain issues as we were earlier,” he said.
But prices for materials, including boxes, fertilizer and water, have not gone down to pre-pandemic levels.
“All of the inputs needed to produce a package are still at historic levels,” he said.
And that’s a major problem for onion grower-shippers.
“Now more than ever, as a grower, your margin of error is razor-thin,” Brechler said. “If there’s any hiccup as far as your yield goes, you can end up underwater or upside-down really quickly.”
The good news, at least for now, is that onion prices are fairly strong, he said.
On May 8, fob prices for 50-pound sacks of yellow onions from California’s Imperial Valley were mostly $17 for colossals, mostly $15 for jumbos and mostly $14 for medium sizes, according to the USDA.
Two years earlier, they were mostly $8 to $9 for colossals and mostly $7 to $8 for jumbos and medium sizes.
Related news: Consumer packs rising in share of onion sales
