Texas: Exceptional Sweet Onion Harvest Soured by Low Market Prices

WESLACO, Texas (May 13, 2008) -- A glut of stored onions left over from last year has soured market prices for sweet onion growers in South Texas now harvesting the last of an exceptional crop, experts say.

“We were able to almost double our normal yields per acre with picture-perfect onions, but market prices are so low this year, growers will be lucky to break even,” said Dr. Juan Anciso, a vegetable specialist with Texas AgriLife Extension Service in Weslaco.

“Unfortunately, an abundance of cold storage onions harvested late last year in the northwest states of the country continued selling into late April at very low prices. That hurt demand and weakened prices,” he said.

Stored onions have been fetching $3.50 to $4 per 50-pound bags, dropping what South Texas growers get for their fresh, sweet onions to $5 to $6 per bag, which are barely break-even prices.

“We can’t compete with stored onion prices,” Anciso said. “Yes, our onions are of higher quality, but not so good as to justify doubling the price of the stored onions. Buyers will go with the lower, stored-onion prices.” South Texas onions are planted in the fall and produce the country’s first bulbs, usually a favorable marketing window. Harvesting here begins in mid-March, peaks in April and drops off by mid-May, when stored onions are usually long gone. But the glut this year even cut into Mexico’s U.S. market.

“Mexico also had trouble,” Anciso said. “They usually ship from January through April, but prices were so low this year, they quit their normal shipments to the U.S. in February because they couldn’t economically justify the cost of transporting them from the Tampico area, where most of them are grown, to the U.S. border.”

The weak market prevented South Texas growers from cashing in on a crop of exceptional yields and quality, Anciso said.

“We almost doubled our per-acre yields,” he said. “We usually produce about 500, 50-pound bags per acre. This year we got between 800 and 1,100 bags per acre.”

Favorable weather helped boost output, but other factors not so obvious also helped, Anciso said.

“Onions like the dry weather we’ve had because it reduces the foliar and fungal diseases that hurt onions,” he said. “Dry weather usually favors thrips, which are onion’s worst insect pests, but for some reason, they were non-existent.

“This should have been our worst thrips year ever, but there were hardly any,” Anciso said. “We didn’t have a harsh winter to knock back those populations, so I can’t explain why we didn’t have major thrips problems.”

South Texas sweet onions have been a mainstay of the state’s vegetable production, but acreage here has been dwindling the last few years.

Some 9,000 acres were planted in the Rio Grande Valley this year, compared to almost 11,000 last year. Onion acreage for the entire South Texas region, including the Coastal Bend and the Laredo Winter Garden areas, is also down by several thousand acres, according to the USDA’s National Agricultural Statistical Service.

Competition, the threat of a labor shortage and other factors are to blame, according to John McClung, president of Texas Producers Association in Mission.

“So many onions are produced in so many areas of the world now that it’s difficult to make money on onions,” McClung said. “Weather, water and labor issues all contribute to what farmers use in calculating how many acres they’re going to plant.”

Available labor is an especially important consideration for onion growers since sweet onions are hand-harvested, often by farmworkers with questionable immigration statuses, he said.

“Hot onions can be harvested mechanically,” said McClung, “but we do better with mild onions which have a low acid content and high moisture levels, which means they are soft. We have not yet found equipment that will harvest soft onions without doing excessive damage to them.”

Without adequate machines to do the work, McClung said threats of a government crackdown on illegal immigrant farmworkers also cut into onion acreage.

“The labor situation is confused,” he said. “The federal government had said that letters to growers with employees whose names didn’t match Social Security numbers would be going out last winter.

“There were legal challenges to that and those letters never went out,” McClung said. “Had they gone out, that would have forced growers to either explain that the government had made a mistake or fire employees who may have been using someone else’s Social Security numbers.”

Had those letters gone out, McClung said, the labor shortage would have been worse than it is now.

“Harvesting will continue through July 15 in the Winter Garden area (south of San Antonio), so for this year, I guess we’re OK, labor-wise. But that situation and low market prices reduced planting intentions.”