Multiple factors are weighing into a very current tight supply on onions.
“In May and very early June, there was inclement weather in the central San Joaquin Valley in California. There was hail and it affected onions and a lot of other crops,” says Michael Davis of Tex-Mex Sales LLC in Weslaco, Tex. That weather led to lost acreage, a higher throw away rate on harvested onions and some quality issues. “When you get onions hailed on, the leaves get hit and so does the bulb,” adds Davis, adding that bruised bulbs can lead to quality issues down the line. “It puts an indention in that plant.”
At the same time, plantings in heavy onion markets including Washington and Idaho were delayed by as much as two to four weeks. “They normally start around the first of August but they won’t have many supplies until the first of September,” says Davis. Local deals out of regions such as New York are also affected. “New York also had a lot of weather and they couldn’t plant on time,” says Davis. “And the growers there tell me that hemp is becoming a big crop that’s moved in and taken up some onion acreage. The onions we've planted are coming along but it’s a long way off and I think it will be mid-August to September for them as well.”
The Mexican factor
Then, add Mexico’s role into the supply issue. “The white onion market in Mexico is higher than it is in the U.S. so the white onions that were coming in via imports are not coming,” says Davis.
With strong demand for onions (and demand that looks even stronger in the face of tight supplies), not surprisingly, the market is up considerably. “We were $12-$14--which is a very good market--at the beginning of June. Now it’s $20-$22 in New Mexico where I’m selling onions out of. It’s made the market very short,” says Davis. He notes that while the price climbed regularly by $2 increments, in the last two weeks it’s held in that $20-$22 range. “We’ve never seen this kind of market sustained,” he says.
Looking ahead, Davis doesn’t see much change until September. “The market is very solid. It’s at high numbers and usually it doesn’t take much for it to come off,” he says. “But with what happened in California and the supply situation in general, I don’t see the onion market coming off until September. Then it will come off real quick.”