Onion shipments from southeastern Oregon and southwestern Idaho are down double-digit percentages from a year ago, and prices for more than a month have hovered just above many producers’ breakeven points.
The area produces about one-third of the country’s fall-winter storage crop, to which about a dozen states contribute.
“With the cold snap we’ve had and other weather conditions, we have been waiting for the market to react and it just hasn’t,” Mick Davie with USDA Agricultural Marketing Service in Idaho Falls, said Nov. 7.
Some customers “could be waiting to make Thanksgiving buys,” he said. Hopefully, business will pick up next week (Nov. 11-15).” The holiday falls late this year.
“We would always hope it goes up a bit, but at the moment it’s not trending that way,” said Jason Pearson with Eagle Eye Produce in Nyssa, Ore. “Eventually it will go up, and I think stabilize. Everyone has got a lot of onions, and they are just trying to push them out and get rid of them.”
He hopes to see jumbo yellows selling for about $8 per 50-pound sack by year’s end, roughly a dollar and a half above breakeven.
AMS Nov. 6 reported demand as moderate and prices at mostly $6.50 to $7. Shipment volume to date was down 17%. Prices were about 50 cents lower in the Columbia and Umatilla basins, in Washington and Oregon, respectively, reflecting lower transportation costs.
“At the price we are at today, it’s pretty darn mediocre,” said Kay Riley, general manager at Snake River Produce in Nyssa. “Nobody’s getting rich. It’s not terrible, either. We’re at a level where we are covering expenses and making a little bit, but we are not cutting a fat hog by any means.”
He expects the market to stay mostly unchanged through the rest of the year — except for a possible pickup in the two weeks before Thanksgiving — and then improve as 2020 starts. During the holidays, foodservice business often concentrate on apples and other products at the same time dining and meal-prep activity depletes onion inventory.
The Northwest this time of year accounts for about 80% of volume, but other markets are still active and contributing to supply, said Grant Kitamura, partner in Baker & Murakami Produce in Ontario, Ore.
“It has been slow, so maybe people feel like they haven’t moved enough,” he said. “Movement has been off thus far and maybe people feel pressure to sell at these lower prices.”
Weather delayed harvest and caused other problems with this year’s onion crop in southeastern Oregon and southwestern Idaho.
“We don’t know if it had an effect on price,” Kitamura said. “If there was reduced volume or inventory, nobody is acting like it.”
Paul Skeen of the Malheur County Onion Growers Association said the number of unharvested onions is not yet known but could be between 700 and 1,200 acres out of the approximately 22,000 in southeastern Oregon and southwestern Idaho.
“That’s not a high percentage initially, but everybody had a few.”
Breakeven varies based on growers’ land and other costs, “but there’s not much left over at these prices for growers,” he said Nov. 7.
Movement, possibly dragged by greater international competition, appears to be picking up ahead of Thanksgiving.
“I am anticipating the market to go up and at least get a little stronger,” Skeen said.
Price-wise, “you are only as strong as your weakest link, and we have got to figure out more closely what our cost of production is,” he said.