As always, the weather, the market, and various parts of the business world can greatly affect the onion market. Here is the Onion Market update as of September 8, 2014:

 

Market: Packing is at full swing at most packing sheds here in the Northwest. While harvest is just beginning here in the Treasure Valley, Washington has been going hard for about a week.

 

Yields: Yields in Washington are about average somewhere in the 700-750 cwt range. Harvest is approaching the 25-30% completion at this point. Reds and whites are the bright spot in the market with prices in the double digits for whites with reds not too far behind.

Yields in Idaho/Oregon have been a bit light to start with, mostly as a result of IYSV and lack of water. Many shippers are offering smaller sized onions than what they are used to. This is adding some down pressure to the market, especially among the smaller sizes.

 

Freight: A continued lack of drivers continues to demand very strong freight prices. Prices are similar, at this point, to what they were during this time last year, but there is even less negotiation when it comes to rates. East coast rates for refers can be as high as $8-$8.50 for refrigerated trucks. If you are able, utilizing flat beds at this juncture in the season could save you as much as 15-20%.

5-6 days prior to these pictures being taken, this field was full, lush, and green. Now, after the pea plants have been cut, placed in rows, and dried by our Oregon sun, they are ready to be put through the combine to separate the chaff from the seeds.  

 

Owyhee Produce partners with farms in the mid west to provide them with the pea seeds they need to grow peas in their fields. Our climate is not conducive to growing peas, and the midwest doesn’t have a climate that can grow great seeds. Each area has been able to use their climate to the best of its ability by partnering together for the best possible result.

 

Before running the combine over the field, the moisture level is checked using the above canister to make sure the seeds have a moisture content under 14%. Anything over 14% will lead to the seeds molding during transportation.

 

As the combine runs over each row, everything is picked up by the rotating feeder at the front. As soon as the chaff and seeds enter the machine, they begin a process of separation.  The rotating, back and forth motion within the combine shakes the chaff off of the seed. The lightweight chaff is pushed over the top and out the back of the machine, while the heavier seeds are kept and compiled behind the cab.

After making a full run and filling the combine, the seeds are transferred to a truck in the field. That truck is taken to our facilities and the product is put in bins to be shipped and stored in Ontario. The seeds go through a super fine cleaning and two tests, one for germination and one for purity. Its imperative that the seeds are able to reproduce a fresh pea variety, and that  the group of seeds are of one single variety. The seeds will then be re-grown and harvested as fresh peas next season. 

For those who don’t deal with onions on a daily basis, onion contracts can seem like a foreign concept. We’d like to share our knowledge of the onion market so that you can have a better understanding of the benefits contracts offer – for your day-to-day business and your bottom line. Shay Myers, a local Grower/Shipper, and John Vlahandreas, a Veteran Onion Buyer, answer the FAQ’s regarding contracts based on their years of experience:

 

When is a good time to contract?

Shay- The best time for a customer to come to me for a contract is a month or more before my planting season even starts. There are many ways to grow an onion: you can focus on size, single centers, storability, sweetness, pungency, duration of season, or any other variable. If I know what to grow and how to grow it, I can assure the best results for my customers. That is why buying from a true grower/shipper/marketer is so important. While custom packers have volume, they have little control over the growing process.

 

John - Know what your customer’s needs are and what they are doing with their onions. Some may need onions more suitable to food service and others to the retail market. Knowing when to switch from old crop to new crop is also key. Contracts should be setup a month before the start of planting. This will assure the most consistent and competitive pricing. Contracting without the outbound business there is a gamble, but if you have committed customers you should contract year round.

 

 

Who should contract?

John - If you are in food service, processing, or other areas with consistent outbound pricing you should contract; anything with a structured retail price. Worst case scenario you should be at least 50% contracted. This will help hold you average and protect you in high and low markets.

 

Shay - I agree with John on all points except one. History has shown that the average “spot market” prices are $1-1.50 higher than the average contract price. So if you are going to error, error on the side of a contract. On average you will come out a winner. Also take into consideration that if a contract is higher than the “spot market” you are usually talking about $.50 to $1.50. On the other hand, if the “spot market” is higher than the contract you may be talking as much as $10-$15! See the graph below for a clear picture of the savings.

 

With whom should you contract?

Shay - As a Grower/Shipper, of course I think you should contract directly with the grower. Working directly with the grower you can get your onions grown the way you need them, especially if you go to them early. If you contract with a “custom packer” you won’t have the same type of control. They will bring onions in from many different growers, almost all of whom are looking at maximizing their yields, which may have an impact on your quality and length of shelf life.

 

John - Contract with the person you are the most comfortable with. You may wish to contract with a larger company because they will have more shippers to turn to cover a contract. It may also be smart to split up your contracts. You could do one with a marketer (broker) and one directly with a shipper.

 

Why may onion contracts be more important than contracts for other agricultural commodities?

John - Onions are used in large volume across the country. Onions have a tendency to go up and stay up, unlike leafy items that go up in price, but quickly come back down. A contract will give you a steady control over the price of your onions so you don’t lose money in a time of high fluctuation.

 

Shay -Onions are not like other commodities, they are sold on a world market. Weather, draught, and disease in places thousands of miles from the USA can have dramatic impacts on the market here in the USA. On the other hand, commodities that can’t be shipped across entire oceans, and are destined to be sold domestically, tend to be less volatile over the long- term.

 

 

Some would argue that following a year with high prices, that it is a wise time not to contract as farmers like to “chase money”, but with onions that isn’t always a wise move. Like other commodities, the down swing on onions may be 20% when compared to the spot market, but the upswing can vary from many other commodities. Instead of seeing just 20-40% on the upswing of the market, as is generally the case with ag commodities, it is not uncommon to see increases of 200% or more when it comes to onions. In other words if you don’t have a contract, it doesn’t take long to wish that you did.

Supplies in the Northwest are down again with total daily shipments well below 200 loads.

That is just 70% of just 2 weeks ago. Supplies are very manageable, but higher prices and fear of the potential the downside has many buyers staying away from the phone. Instead many are buying short to avoid any potential risk. NW supplies will be available for another 2-3 weeks; after which Southern Texas and Imperial Valley California will enter the market. Prices may spike up again between now and then, but only if there is significant rainfall in either of the two areas just mentioned.

 

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Planting has just ended in the Northwest. This field E. Oregon will be ready for Harvest in Mid-August.

Onion update 3.11.2014- 

 

• All sizes and colors are up another 10-12% over last week   

• • Prices WILL continue upwards for the rest of the week
  • Mexico is crossing loads but still at much lower than normal levels 
  • As of the 10th, Mexico has crossed 678 loads. 
  • Down 2,104 loads when compared to last year.
  • Texas is getting closer to starting
  • Vidalia looks to have an April 15th start, at earliest
  • Imperial Valley Shippers should begin May 1
  • Many western shippers are finishing up for the season
  • Central Valley growers have major water problems

  In a nut shell, this wild market isn’t over yet and it may be sometime before it is.  Texas is still behind due to colder than normal growing conditions.  Recent reports in the produce news speculate that they will begin packing there within the next 2 weeks or so.  The advantage for Texas growers at this point is the lack of competition in the sweet onion markets.   This again is due to Mexico’s much lower volumes and it is also due to the Vidalia onion region entering the market weeks later than normal.  This will allow the Texas growers to market their onions over a much longer window of time.  So then, the question remains, will Texas’ entrance into the market cause prices to come down?  Probably not.  It is more likely that the prices will stagnate some when Texas first comes in to the marketplace.  Then, after buyers and sellers have the chance to assess the availability and quality of the onions, prices may change The argument some will make against lower prices and relief in the market is quite simple; just as additional growing regions come into the market, the Northwest will be getting out.  Until New Mexico and the Central Valley of California begin shipping, there simply won’t be enough availability of supply to cause prices to come down. 

This is going to be an interesting report. I want to lay out all the factors that are coming in to play with the onion market.

 

• First, supplies started out lower due to inclement weather in Idaho, Oregon, and Washington during the 2013 storage crop season. Yields were down somewhere between 15 and 20% (that is about 10,600 loads)

 

• Second, shrink is up 10-15% (that is about 7,500 loads) due to storage problems attributed to the high amounts of rain that fell on the same NW crop.

 

• Export demand to Asia and Latin-America has been higher than “normal”. NW onion exports are up 20% over last year (that is 1,357 loads).

 

• Mexican exports into the USA that normally starts in mid-late January have been virtually non-existent. As of this writing Mexico has shipped 89% fewer loads when compared with last year (that is 1,176 loads).

 

• As much as 80% (that is 1,800 loads) of Washington’s and Oregon’s over-winter crop has been destroyed due to harsh winter conditions. While these loads are not marketed until mid-late summer, they are primarily used to supply area processors. Not having this supply available will force processors, who also fresh pack, to reduce the number of onions they sell on the fresh market now.

 

Additional factors abound, but they are of a more speculative at this time. If we use the “hard numbers” above we could be short over 22,000 loads. Although this may seem too high, for argument sake we can cut the number in half to 11,000 loads and still see the ramifications. This number represents nearly 2 months of consumption of the entire USA!

Ok, we've been itching to make this Roast Beef Sandwich to try it out with our Red Onion Jam. We decided to whip up a new batch of jam and make this Sandwich for lunch!

Ingredients

• 1 sun dried tomato & herb 1lb. loaf , split horizontally, toasted
• mayonnaise
• ½ Lb Thickly Sliced Roast Beef
• Red Onion Jam
• 3 large romaine lettuce leaves

Directions

1. split horizontally sun dried tomato & herb  loaf 2. butter bread, toast in *500 oven for 5 min 3. spread mayonnaise, about 2tb per side 4. layer on roast beef 5. add warmed red onion jam 6. lettuce leaves 7. cut sandwich, serves 4        

This is a must for your next grilled sandwich or burger. We loved how fast and easy this was to make. This is definitely a new staple for us on the farm! P.S. Watch for the next blog post we used this jam to make a mean Roast Beef Sandwich with Red Onion Jam!!!

Ingredients

2 tablespoons olive oil 1 red onion, thinly sliced 1/2 cup sugar 1/4 cup red-wine vinegar 1/2 cup beef broth

Directions

1. Place oil in a medium saucepan over medium-low heat and thinly slice 1 red onion 2. Add onions, and cook until they begin to soften and become translucent, 8 to 10 minutes. 3. Add sugar and continue cooking for 1 minute. Carefully add vinegar and beef broth. Increase the heat and bring to a boil, and immediately reduce to a simmer. Cook until liquid has evaporated and onions are caramelized, about 3 minutes. 4. Keep warm until ready to serve on favorite sandwich or burger.  

Proposed regulations could bring an end to PNW onion crop By SEAN ELLIS Capital Press NYSSA, Ore. -- Growers in the nation's largest onion-growing region worry proposed federal rules on agricultural irrigation water could put them out of business. The rules would impact many produce growers, but onion growers in particular are concerned about the Food and Drug Administration's proposed limits on allowable microbial levels in agricultural water that were issued as a result of the Food Safety Modernization Act. 'Scary deal' If the rules governing irrigation water used on fresh produce pass as currently proposed, "onions will not be grown in Idaho and Eastern Oregon," said Shay Myers, general manager of Owyhee Produce in Nyssa, Ore. "It's a scary deal." Nyssa is in the heart of the Idaho-Eastern Oregon growing region, the nation's largest in terms of volume. More than 20,000 acres of big bulb onions are grown annually in the Snake River Valley in southwest Idaho and Malheur County in Eastern Oregon. There are 40 packing sheds in the valley and the region supplies about 25 percent of the nation's total onion consumption. Farm-gate receipts for onions in the region totaled $122 million last year and the industry's impact on the regional economy is estimated at $1.3 billion. While more than 200 commodities would be affected by the FDA's proposed rules governing agricultural water -- water likely to come into contact with produce -- the onion industry is a prime example of how they could impact farmers. Concern among onion growers is the impetus for a congressional effort to defund the proposed rules. Growers in the region express great fear over the rules, which limit the amount of coliform bacteria that can be present in agricultural water and apply to all fresh produce that could be consumed raw. "If (growers) are not concerned, they should be," Oregon onion grower Reid Saito said. "It's a pretty critical issue in terms of our ability to produce vegetables, in our case onions." The proposed rules include two numerical standards on the amount of generic E. coli bacteria that can be present in agricultural water. Generic E. coli is widespread and the standards serve as an indicator there might be a bigger problem. One standard allows no detectable amounts of E. coli when the water is used in a manner that directly contacts produce during or after harvest. The other standard applies to irrigation water and requires E. coli levels to be under 235 colony forming units of generic E. coli per 100 milliliters for any single water sample. That standard also requires five consecutive samples to have a rolling geometric mean of under 126 units. Surface water woe Virtually all onions in this region are irrigated with surface water and almost none of this water will meet the new standards, said Kay Riley, manager of Snake River Produce in Nyssa. "Most of the surface water in this area will never meet those standards," said Riley, chairman of a National Onion Association ad hoc committee that is studying the issue. Using well water is not an option for most growers in the region and would be a costly alternative because of increased power costs, Idaho onion grower Ron Mio said. Bacteria levels in surface water are so variable that it's pointless to speculate on a level that might be acceptable to onion growers, Riley said. While some surface water close to reservoirs might pass the standards, that's a big gamble, said Clint Shock, director of Oregon State University's Malheur County research station. "There is a tremendous risk to start growing something when your water might not meet those standards," said Shock, who is advising the local onion industry on the issue. "If you can't continually use your water source, you're done." Groundwater has much lower E. coli levels than surface water because soil serves as a filter and groundwater is isolated from E. coli sources such as people, livestock and other animals and rodents. Growers who irrigate with surface water would be required to test weekly during the irrigation season under the new rules, at a cost of about $40 a test. If they fail a test, the only option is to quit using the water. Under the current proposal, "if your water doesn't meet the limits, you cannot use it," said Byron Shock, Clint Shock's son and a researcher and analyst with Scientific Ecological Services, a consulting firm that is helping the onion industry wade through the proposed rules. "If it doesn't meet the standards -- and most water here cannot meet the standards -- then what do you do?" Byron Shock added. "You have to stop using that water." While treating water could be a costly option, any chemicals used in the treatment of irrigation water would require Environmental Protection Agency registration under the Federal Insecticide, Fungicide and Rodenticide Act. However, no such registration process for chemical treatment of irrigation water currently exists, a fact that FDA officials confirmed. "It's not clear that there is any legal way to treat the water," Byron Shock said. Shelly Burgess, FDA team leader for food, veterinary and cosmetic products, said the agency anticipates the produce industry will have adequate time to address that issue before the rules are implemented. But as the proposed rules currently stand, the region's onion industry could not exist and that is alarming to farmers, said Craig Froerer, who manages Owyhee Produce's farming operations. 'Scared to death' "This is huge. We are scared to death," he said. "To me, this issue has the potential to be the most detrimental to agriculture since I started farming here in 1978. Because if this goes into place, it changes the whole world we live in." Clint Shock said the proposed regulations could create winners and losers by favoring farmers who get their water from wells. "Growers who depend on irrigation wells and less on shared public irrigation systems might be given a competitive advantage," he said. The rules could also favor small farmers -- growers who sell less than $25,000 in crops annually and some who sell mostly directly to consumers or local restaurants would be exempt -- and large corporate farms, which can better shoulder the cost of testing, he adds. "It's not a scale-neutral regulation," he said. Burgess said the FSMA, passed by Congress in December 2010, has given the FDA a legislative mandate to require comprehensive, prevention-based controls across the food supply. She said the rules represent a paradigm shift from reaction to prevention and are designed to be flexible for small and medium size growers, "focusing only on those practices that pose a potential food safety risk.... FDA is focusing on farms that account for the greatest amount of production and that grow produce most likely to cause food-borne illness." The FDA evaluated data from 2003-2008 to estimate the public health risks and benefits of the proposed new regulations. It created six commodity groups based on this evaluation: herbs, leafy greens, melons, sprouts, tomatoes and other. According to comments on the proposed rules sent to the FDA by the National Onion Association, the first five groups have a history of food-borne illnesses, while the "other" category represents more than 200 agricultural commodities. The association's letter said the vast majority of food-borne illnesses in the "other" group during the evaluation period were traceable to hot peppers and onions that came from Mexico, according to the FDA's own data. Onion growers believe hot peppers and green onions should be covered under the proposed rules, "but we do not see how the FDA can justify regulating the other 200-plus commodities that collectively pose little risk of food-borne illness to Americans," the association's letter states. "We believe that the commodity group 'other,' with hot peppers and green onions excluded, is safe and should not be regulated." FDA officials confirmed that there has never been a food-borne illness outbreak associated with bulb onions reported to the agency. However, they also pointed out that a research study cited in the proposed rules demonstrates that E. coli contamination of onions can occur through contaminated manure compost and irrigation water. Some commodities have little or no history of links to food-borne illness and exempting them from coverage could reduce costs to farmers, Burgess said. "However, because food-borne illness outbreaks have regularly been associated with commodities that have previously not been linked to outbreaks, this approach carries the risk of failing to prevent future outbreaks," she adds. The FDA recently extended the comment period on the proposed rules another 120 days, to Sept. 16, and Burgess said the agency will "carefully consider those comments in crafting final rules." The proposed rules allow farmers to propose using alternative protocols to achieve the same results if it can be scientifically shown that they are at least as effective as the FDA rules in controlling microbial bacteria levels. If the proposed rules are adopted as currently written, developing an alternative protocol appears to be onion growers' best avenue to comply with the regulations, Byron Shock said. The proposed rules also allow states to request variances for individual commodities. But, Riley said, any request for variances or alternative protocols "is subject to the FDA's whims." Idaho Republican Sens. Mike Crapo and Jim Risch and Michigan Republican Rep. Dan Benishek have introduced legislation in the Senate and House that seeks to defund the proposed fresh produce rule. The congressmen will try to include the provision in the new farm bill through the amendment process but will run the bill as stand-alone legislation if that attempt fails, said Crapo spokesman Lindsay Nothern. "The situation the onion guys are facing is a big part of why we are doing this," Nothern said. "It just doesn't make any sense to include them...." FDA's "assertion that even minimum risk commodities should be subject to the same rules based on evidence that has not materialized is particularly concerning," Crapo said.   The Food Safety Modernization Act * The Food Safety Modernization Act aims to ensure the safety of the U.S. food supply by shifting the focus from responding to contamination to preventing it. According to FDA, it's the most sweeping change in U.S. food safety laws in more than 70 years. * Proposed FDA rules related to the FSMA include new regulations covering agricultural water that apply to most fruits and vegetables that can be consumed raw. * FDA estimates all of its proposed rules would cover an estimated 97,600 farms and cost the industry $460 million annually. * The comment period for the proposed rules has been extended 120 days, to Sept. 16.