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Texas’ spring onion market opens down from last year’s near record

The Texas spring onion market has begun to rebound after a slow start as storage onion supplies begin to dwindle and supplies from Mexico and Chile taper off.

The market started slow despite a lower USDA acreage estimate of U.S. spring onions, says Jose Pena, Texas Extension economist at Uvalde.

“Onion markets have been weak since last fall,” Pena said, “as supplies increased from more storage onions planted last summer.” That increase likely resulted from “sky high prices last spring and summer.”

The mid-to-late March onion market opening was off significantly from last year.

Pena said red onions were showing more strength than yellows.

The April USDA spring onion planted estimate indicated 31,600 acres — a 2,200-acre, 6.5 percent drop from last year and down 9,200 acres from the 40,800 acres planted in 2006. Acres for harvest this year are 29,400, down 1,600 from last year (5.2 percent).

Pena says estimates put the 2008 crop at 1.03 billion pounds, up from last year’s 1.02 billion pounds, “when early and late-season spring onion prices in Texas reached record highs.”

Pena said those prices were short-lived after harvest moved into the Winter Garden region. “Prices recovered by early June, before Winter Garden harvest ended.”

Texas farmers reduced plantings by 12 percent for 2008 — 11,000 acres compared to 12,500 last year. Estimated harvested acreage is off 8.7 percent — 9,500 compared to 10,400 in 2007.

The Lower Rio Grande Valley harvested an estimated 7,200 acres of spring onions this year, off 8.9 percent from 7,900 harvested in 2007. The Laredo/Winter Garden region harvested 2,300 acres, down 8 percent from 2,500 last year.

Pena says Arizona spring onion acreage increased by 25 percent this year, up from 1,200 acres to 1,500. Georgia cut back from 12,500 to 11,500. California onion acreage was unchanged at 7,600.

Pena said Lower Rio Grande Valley onion harvest began in mid-Mach with above average yields and excellent quality.

“Production is up, but it appears they have a higher proportion of jumbos, compared to mediums and re-packers, as some farmers delay harvest and continue to irrigate, hoping for markets to improve.”

Pena says Texas average yields will be up, at 730 bags (50-pound) per acre. That’s 21.7 percent better than last year. Production forecast is 346.8 million pounds, a 10 percent increase from last year’s 312 million, but off 15.5 percent from the 410.4 million produced in 2006.

“Texas will lead the nation in spring onion production, ahead of California’s 339.9 million pound estimate,” Pena said. Texas was second to California last year. Texas accounts for about 33.6 percent of the U.S. spring onion crop estimate of 1.03 billion pounds.

Pena says Georgia onion production was hampered by hard freezes in December and January. “Production estimate is 275 million pounds, down 17.8 percent from 324 million pounds last year. Georgia’s harvest competes with the Winter Garden of Texas crop.”

Overall onion supplies are up, according to the National Onion Association estimates, Pena said. “Storage onion production during the 2007-2008 season, 92.9 million 50-pound equivalents, was up 14 percent from 81.5 million from the 2006-2007 season.”

Carry-in storage onion estimate as of March 1 was 13.4 million 50-pound equivalents, almost three times higher than carry-in stocks on March 1, 2007. Pena said storage onion shipments from the Utah-Oregon region are up 32 percent from last year.

“By April 1, estimated storage onion stocks were 6.2 million 50-pound equivalents, still close to twice the size of carry-in stocks of 3.59 million last year, when prices were at record high levels.”

Pena said current carry-in stocks are at more manageable levels. “Increased carry-in stocks and a slightly higher spring onion production estimate may mean the market could remain at very competitive supply levels, but the market should improve as supplies taper off.”

In late April jumbos and mediums out of storage were trading at $3.50 per 50-pound bag. “Spring onion shipments from Mexico and Chile are almost exhausted. Spring onions were trading for $4.50 to $5.50 per bag of jumbos and $6.00 to $7.00 per 50-pound bag of mediums/pre-packers.

“Overall, the spring onion industry remains optimistic that the market will improve as reduced supplies come in balance with demand,” Pena said.

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