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Onion demand difficult to predict consistently

With good supplies of onions across the country, demand for them is still challenging to determine.

“With the crop on hand, the numbers look good. If it were a normal year, we’d say we’re a bit short. But it’s an unusual year from a marketing perspective so the supply looks okay,” says Jared Gutierrez of Columbia Basin Onion LLC., a grower/shipper based in Hermiston, OR.

Currently, significant volumes of storage crop onions are coming from the Northwest, which carries into May though some growers stretch that to June. Supplies are also coming from Nevada, the Midwest, the Eastern states and Eastern Canada. “A new market coming on now is Mexico. They’re coming in full swing because it sounds like they had a good crop. And then south Texas will come off in March. Those regions come into play in the next couple of months,” says Gutierrez.

Mexico coming on
While there’s a balance of colors available, Gutierrez notes that Mexico began last week with whites and this week with yellows and reds. “Their main onion is white. When they start sending their crop across, that usually cuts off our market a bit because they hit other regions closer than we do,” he says. “And if they have a good crop with good quality, people will buy it.”

Storage crop onions are coming from the Northwest, Nevada, the Midwest, the Eastern states and Eastern Canada.

Rather than color, the issue for onions right now is around sizing. “Everything shifted to retail business after the pandemic started. And the medium profile or small jumbo kind of became the new item,” says Gutierrez. “Jumbos are still moving but that medium to small jumbo profile is popular, especially with the USDA Farmers to Families Food Box program.”

In fact, the program has been very helpful to onion growers. “It’s really kept the onion industry and other crop industries going,” says Gutierrez. Particularly in light of the drop in foodservice demand—onions are a key foodservice item. “It’s come back somewhat—restaurants are coming back but sports venues for example, are not quite there yet. Some are back at maybe 20 percent capacity? And we’re not sure what kind of food they have because menu items have been reduced.”

Hot and cold demand
As for current demand, it’s been somewhat inconsistent. Gutierrez says it has had hot and cold pockets of demand. “One minute we’re going crazy and the next minute things are moving more calmly. It’s hard to gauge,” he says. He notes that demand in retail is stronger especially in smaller pack sizing—two, three, five and even 10 lb. bags of onions. Demand is also coming now from meal kit programs which have picked up in popularity with consumers throughout the pandemic given the lack of dining out options.

All of this would indicate a higher price in the market, but unfortunately there are fluctuations, says Gutierrez. “Sometimes as grower/shippers, we get nervous thinking we have to keep the crop moving. Then we hit a cold pocket of demand and drop our price a bit thinking that will do it. And that’s not necessarily the case,” he says. “Then when it’s hot again, we build back up so we have some fluctuation happening.”

As for predicting movement, it remains challenging. “Historically February is more of a pace month versus the heavier demand we see in March or April. Right now, demand is good. But January was better,” says Gutierrez, noting there may be more movement in price as inventory crops become shorter in supply weekly.

For more information:
Jared Gutierrez
Columbia Basin Onion LLC.
Tel: +1 (541) 667-9472
Jared.Gutierrez@columbiabasinonion.com 
http://www.columbiabasinonion.com/ 

 


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