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Onion market settles back in after clearing out oversupply

The onion market is back on track after moving through the crossover supply season.

“Things are really good right at the moment,” says John Harris of Fort Collins, Co.-based Paradigm Fresh. “Demand is steady and typical of this time of the year and several areas are online: Mexico is pretty much wrapped up and Texas is wrapping up early. California is just getting started and it sounds like Arizona will have onions in about a week. And in about two weeks after that, New Mexico will come on a few weeks early. This is the time of year for crossover.”

Harris notes that even just as recent as a month ago, the onion market was off and had been since the middle of February. “There was a serious oversupply the Northwest had this year with historical low pricing,” he says. “There’s just so much competition between that, and Canada, New York and Wisconsin cleaning up and then Mexico and Texas coming online, it was a really difficult market. It was as difficult as I’ve seen in 15 years of business.”

Market stepping up to demand
But now with the Northwest market finishing up, Harris notes the oversupply has cleared out. “The supply is just barely keeping up with demand and the market reflects that,” he says. “These are Texas prices, but we have $10+ FOBs (freight on board) on yellow onions, high teen FOBs for whites and $6-$8 FOB for 25 lb. reds. California is similar FOBs as well.”

What’s adding to the change is a slight shift in timing. “Everything is out of slot a bit early. The weather has been really good in most growing areas,” says Harris. “New Mexico will have onions by the second or third week of May and that’s very early and could cause some oversupply. But California is also hot right now and they’re going to have a lot of onions ready at the same time over the next 3-4 weeks.” 

In turn, he expects the market to possibly slide and come off just because of the volume that’s going to need to be pushed. “But then come mid-June through the middle of July that’ll flip flop and we’ll probably be a bit short,” he says.

For more information:
John Harris
Paradigm Fresh
Tel: +1 970.775.2049

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