As inflation grips various sectors, the onion market is experiencing historic price levels in 2024.
Factors including weather-related disruptions in key growing regions like Mexico and Texas, coupled with increased costs of production, have led to a tight supply situation, John Harris, president and founder of Paradigm Fresh, recently told The Packer newsletter.
Despite challenges, the National Onion Association says it remains proactive, advocating for the industry and launching initiatives like “Certified Delicious” to promote onion-centric culinary experiences.
With the onion market surpassing $3 billion, according to Nielsen data, adaptability and innovation remain crucial for sustained growth in this staple vegetable category.
Onion per capita consumption in the U.S. has been increasing, according to USDA data. Fresh onion retail per capita consumption in 2020 was 19.21 pounds, up from 18.22 pounds in 2019 and up from 17.74 pounds in 2000.
In The Packer’s Fresh Trends 2024 consumer survey, 60.1% of participants reported they bought onions during the past year. Those reporting the highest rates of purchases included higher-income, older consumers and households without dependent children.
MARKET OUTLOOK
Onion prices for 2024 to date have been near historic levels, first with white onions and now with red onions.
Yellows have been above market averages for the year until just a few weeks ago.
“Hurricane Hilary came through in late August of 2023 and destroyed much of the early Mexican crop that fed their domestic demand,” Harris said. “Mexico began importing from the U.S. in late 2023 and well into 2024.”
Canada and New York had a short crop due to torrential rains during their late summer harvest periods. Mexico was down in acreage this year due to water shortages.
“Texas had similar issues as Mexico, with significant water shortages when they planted,” Harris said. “All exports to Mexico created a supply shortage in the U.S., and the markets reacted.”
“It’s not a secret that input — ground, seed, diesel, fertilizer, packaging, etc., -- costs to produce these crops have skyrocketed in the last five years,” Harris said. He added that there is no question that the market average will rise to support these costs. Rather than that extra money going into the grower’s pocket, it’s simply covering the additional overhead costs to produce the crop.
SALES AND DEMAND
According to the data, volume sales of onions totaled 2.26 billion pounds, up 3.3% compared with the previous year. The average price for onions for that period was $1.27 per pound, down 2.5% compared with the previous year.
Circana data for the period showed that retail onion sales increased 0.7% compared with the previous year.
“2024 has yielded 7,000 more truckloads sold this year from last year,” Harris said. “Demand will continue to be strong through July, and it usually slows in later August as children get back to school and routines change,” he said.
EDITOR’S TAKE:
Onions are another crop that we rarely hear about or discuss when talking about major trends in agriculture. That said, onions are a big deal in our overall diet as shown by the per capita consumption data. Most people enjoy onions as part of their diet and enjoy the taste. Even when they are in short supply and prices are elevated, onions still make their way into our sandwiches and meals. Be sure to seek out onion growers as you search for the best customer prospect in 2024. By the way, they also need trucks for their operation.
