|
Click to listen to this article
|
Northwest Farm Credit Services’ 12-month profitability outlook calls for “breakeven returns” on onions. The drivers behind this prediction include demand for remaining large onions, rising input costs and weather.
Following a shortage of large onions in the 2021 onion crop, producers with large onions in storage are well positioned to capture higher prices, according to the January report.
However, rising input costs are adding pressure to producers’ breakeven costs. Headline inflation was 6.8 percent in the last year. Nitrogen fertilizer prices skyrocketed from under $225 per ton in November 2020 to $570 per ton a year later. Machinery and drip irrigation costs reached an all-time high in November.
Profitability in 2022 will also depend on growing conditions; ample rainfall is needed to make up for shortages in last year’s onion crop.