The North American onion supply is steady for now, but on the brink of shifting.
“In the Northwest, red and yellow onion supply is very good but supply on white onions is quite short,” says John Harris of Fort Morgan Co.-based Paradigm Fresh.
Overall, the white onion market looks slim. Harris notes the Mexican crop will likely be short the entirety of the season and the Texas white crop is also down. “I don’t think quality was outstanding in the Northwest on their white crop. So everybody moved heavier volume earlier in the season as opposed to last year when they waited too long and the market fell apart,” he says. “That left a bad taste in their mouth so they went the opposite direction this year.”
Also factoring into onion movement this season are the states of Michigan, New York, Wisconsin as well as Canada, all of which had poor crops because of torrential rains late summer and fall, says Harris.
Paradigm Fresh's new packing floor.
Demand changing
Until now demand had been steady but that’s changed recently. “As of the last 10 days, demand is very low,” says Harris. “That’s helping maintain a mostly steady market for all colors. If demand increased at all, the white market will likely go up really quickly, even higher than it already is. A $25 white market would probably go up by at least $10.” That said, demand generally slows for onions in late January-early February says Harris. “It’s cold outside and there’s usually bad weather somewhere in the country—it slows demand and movement,” he notes. Another factor in the push on domestic onions is exports—they’re in demand heavily in Mexico and the Netherlands this year.
Solid pricing
Meanwhile pricing looks in the high-middle range, although the market on whites is fairly volatile. “On reds, a crummy market this time of year is $4. A strong red market is about $7. We’re hanging out at $5.5-$6 so that’s good,” says Harris.
For now, Harris doesn’t see much change coming for the rest of February. “We will see some Mexican yellow production come up here. It’s already coming but the volume increase will be between now and the first of March,” says Harris.
On domestic yellows, he notes the storage crop reports show two million bags less than last year at this time. “And the market wasn’t very good last year,” he says. “But by the end of March, Michigan, New York, Wisconsin and Canada will all be out of onions and they’ll be buyers. They haven’t been buyers for two or three years now and they buy small yellows and reds. I think we’ll see a big medium yellow market starting at the end of late March, early April. And that will continue through to the later part of July. It’s literally almost a foregone conclusion that we’ll have a high yellow market,” says Harris.
On reds, ample supply is likely to stay that way until the end of April when the California market begins.
For more information:
John Harris
Paradigm Fresh
Tel: +1 970.775.2049
John@paradigmfresh.com
www.paradigmfresh.com