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Onion Market Update 1/21/2025
By John Harris
Happy 2025. I haven’t posted an update since before the holidays, and this is overdue, considering we are already in the back half of January. The onion market has been extremely stable for the last several months across the board on all colors and sizes. The white market has moved around a bit from week to week, but not enough to create much anxiety. The red market has been incredibly stable for a couple of months now except for a deal here and there, which is usually being given on onions with some mild quality issues, namely neck rot that is all but impossible to sort out, even for the sheds that have optical sorting equipment. Unfortunately, the yellow market has seen no improvement and is, in my opinion, holding on by a thread. With Mexico upon us and volume ramping up on yellow and white onions over the next three weeks, it will undoubtedly add pressure to our domestic market.
With this being said about Mexican products being at our doorstep, on Trump’s first day of office, he set in motion a plan to put 25% tariffs on all products coming from Mexico and Canada starting February 1. If this happens, it could be a blessing for our domestic market. With the already razor-thin margins in this market, the price of marketed Mexican products on the U.S. side of the border will simply have to be higher to support this tariff cost.
The debate on this subject is very complicated, and I’m not interested in stirring the pot on the politics of the matter. Ultimately, the consumer will end up paying more for onions, albeit not a lot more. And let’s face it; if this tariff can somehow help prop up a yellow onion market that is already being sold under the cost of production, then I’d say in the short term for the American farmer that this is a victory that we will take.
My crystal ball for forecasting what is in front of us from a market standpoint for the next several months is murky. Our storage levels are basically identical to what they were at this time last year, yet we are currently selling yellow onions below the cost of production. Global supplies are in far better shape than they were at this time last year, and that must be taken into account on some level, but why this yellow market is not a little better is a bit head-scratching. Adding more product from Mexico to a market that is already underwater isn’t going to help things. We shall see how the red and white markets are impacted as well. My guess is those markets are going to fare better than the yellow market.
As always, I look forward to your feedback and responses. We have some challenges to navigate over the next several months. Still, history has taught us that there is likely a surprise around the corner that we haven’t thought about or identified yet that will somehow shake things up.
Have a great week and I’ll do my best to get another update out in a couple of weeks.
Editors Note: John Harris is the president and founder of Paradigm Fresh and Colorado Cold Connect in Fort Morgan, Colorado. He can be reached at John@paradigmfresh.com.
