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Texas onion deal should have strong finish

The Texas sweet onion deal hasn’t gotten started yet but it appears to be poised for a very good second half.

Acreage is down an estimated 10 percent and the crop is trending two weeks to three weeks early, with a mid-March start expected. That could mean that by mid- to late April, supplies will be short and a very good market could be the result.texas-onions-from-onion-house

Don Ed Holmes, owner of The Onion House in Weslaco, TX, and a longtime observer and participant in the Texas onion deal, said growing conditions this year are very much out of the ordinary. “The temperature is high and dry,” he told The Produce News on Feb. 17. “Average temperature at this time of year is about 74 degrees. Today it’s 84.”

He said that has been commonplace throughout February, causing the crop to come on very early. Currently, Texas onion shippers are sourcing from south of the border, which has also been very early. By this date in February, Holmes estimated that 30 percent of the Mexican crop had been shipped. He anticipated that the remaining 70 percent would be marketed over the next month causing just a little bit of an overlap with Texas’ Rio Grande Valley production.

He said when the Mexico deal started the market was pretty low but “it’s been getting a little better recently. It’s not what I’d call a hot market, but it is getting better.”

He noted the market on sweet onion cartons ranged from $5 to $8 depending upon size, with the larger onions commanding the larger returns. The reason Holmes anticipates a stronger market developing over the next two months is the lack of supplies from competing areas. On this mid-February day, he said that the Peruvian onion deal would be finished up by the end of the month and that the Idaho-Oregon storage deal had snow issues this year with several sheds collapsing under the pressure of too much snow. That unfortunate weather calamity is reducing the availability of spring supplies.

“Texas is down from a year ago and our early varieties are at least two weeks ahead of schedule,” he said.

With the devastating storage shed collapses in the Northwest, he said that area could be out of onions by April. “Once you get to the backside of our deal, the markets are going to get a lot better.”

Holmes predicted that the strong market will carry through the spring and could be especially good for California’s Imperial Valley sweet onion deal, once it gets under way in late April. California has had lots of rain this spring, which may very well delay that production a bit. “That crop hasn’t been made yet,” he said. “I don’t think they will start until April 15 to 20. And by May 1, we [Texas] could be out of the deal. California guys could inherit a pretty sweet deal.”

A bit perplexing is the 10 percent decrease in Texas onion acreage this year. In 2016, Texas growers and shippers had what Holmes characterized as a “really good year.” That typically means growers plow that money back into the ground creating an oversupply the following year. “Maybe we’re learning,” he quipped, noting that onions are an expensive crop to grow and apparently everyone was a bit gun-shy on plantings knowing the traditional pattern all too well. “It seems like everybody cut back thinking others were going to overplant. The result is less acreage, which should be a good thing.”