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TX grower-shippers set for solid spring with onions leading the way

Though wild winter weather was still leading to strange events like sub-freezing temperatures as far south as Houston in late March, Texas grower-shippers on the whole are set up for excellent onion, melon and tropical deals this spring.

The onion deal looks to be especially promising for Texas.

Northwest storage supplies are lighter than they have been in years and there are very few onions still coming out of Mexico.

“We are looking at one of the shortest markets for storage crop onions we have seen in several years,” Tracy Fowler, general manager of L&M Cos. Inc. of Raleigh, NC, said in late March. “The storage market in Idaho, Oregon and Washington is below the levels from four seasons ago when we hit record f.o.b. prices in Texas and California.”

According to Mr. Fowler and others (though there are growers who disagree) there are 10 million pounds less of storage onions than there were four years ago when market prices temporarily topped $50 before settling in and staying around $40 for much of the deal.

That in turn prompted Texas growers to overplant in 2011, with disastrous results that year and next. Over the past few seasons, Texas onion acreage has dropped a cumulative 40 percent from 2011 levels, setting the stage for a solid season.

“It should be a darn good year but not a crazy one like 2010,” said Don Ed Holmes of The Onion House LLC in Weslaco, TX.

Mr. Holmes said the 2013 deal reminds him of the 2007 season, when “supplies from Mexico were short and we had a good market all season.”

In late March, red onions in 50-pound units topped $40, white onions were in the $25 range and yellow onions were being quoted from $12-14.

“We should see these type markets continue into the April and May shipping of Texas and California onions,” Mr. Fowler said. “I am not going to say that we are definitely going to have a $40 market, but it sure does look that way. It looks very promising. We need this after having $5-6 f.o.b.s for much of last year. Most people will be happy if we are just in double digits all year.”

Mr. Holmes is more cautious — he believes there are more onions still in storage than some estimates suggest — but still optimistic. “I think we will see some markets in the upper teens or low-$20s with whites a bit higher,” he said.

As for melons and tropicals, January rains and freezes in Mexico hampered the flow of product from that country through Texas early in the spring. Mexican supplies of honeydew and cantaloupe were light in late March, with demand far exceeding supply. Watermelon rallied, with 4,901 loads crossing the border into Texas at Otay Mesa, Pharr, Progreso and Rio Grande City the week of March 21, compared to 3,902 for the same time frame last year. As of March 27, demand was good and the market was steady, with seedless watermelon fetching between 22 and 24 cents per pound and tending toward the higher side.

That bodes well for Texas-grown product. Many, if not most, growers in Texas also have operations, partnerships or contracts in place across the border to bolster homegrown product and supplies should be ample with decent markets as Texas and other Mexican growing areas comes on throughout the spring.