Freight rates push onion pricing

Supplies of domestic onions are solid.

“We have fairly similar supplies to last year. The U.S. volume is not a concern. Mexico has concerns because they’re short on availability and are purchasing a lot of red and white onions right now. And Canada had a short crop this year so while that’s currently not a factor, it will become a factor in the spring of 2021,” says John Harris of Fort Morgan CO-based Paradigm Fresh.

YELLOWS: Medium yellows are fairly tight right now and Harris notes that that’s connected to the USDA Farmers to Families Food Box program, which relies on yellow onions, as well as the push towards Thanksgiving. “Medium yellows going into November with Thanksgiving coming up are a hotter item than usual,” he says. Jumbo and larger yellows are available, and the price has been flexible to this point. Pricing on yellows is similar to last year at this time.

WHITES: Whites are tight currently, but this isn’t connected to the food boxes. “The white shortage is coming from heavy demand for Mexico. White onions are also a holiday item,” says Harris. Compared to last year, white onion pricing is approximately 10 percent higher this year.

REDS: Red supplies are somewhere between white and yellow and seeing good movement. Like white onions, reds are also seeing approximately 10 percent higher pricing.

Adding to the pricing this year are increasing freight rates. “Most buyers are seeing a rising cost in delivered prices as freight rates continue to climb,” says Harris, though he notes Colorado freight rates are still relatively in control. “To escape those rates, you might look to find regional supplies,” he says, noting the East Coast would turn to Canadian and New York suppliers while Texas might look to Colorado.

John Harris with Paradigm Fresh's new cooler.

And as far as foodservice demand for onions, a popular foodservice item, demand is still off which means retail demand is strong—and stronger than last year at this time. What lies ahead for foodservice though is unknown. “We used to speculate as to what more lockdowns and demand would look like. But now we have some of that under our belt from last April. We have a little more education and a little less speculation as to what to expect in terms of foodservice continuing to suffer and retail continuing to be busier,” says Harris.

For more information:
John Harris
Paradigm Fresh
Tel: +1 (970) 775.2049

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