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Central California onion deal starts early on down market, but prices expected to firm

Being early with a crop can be a desirable thing when it hits a marketing window, but not when it comes in on top of an already glutted market. That is what happened at the start of the Central California onion deal this year, but growers were confident that it was only a temporary situation and prices would soon firm.

"We started early," as did most growers in the San Joaquin Valley, Mike Smythe, a salesman at Telesis Onion Co. Inc. in Five Points, CA, said May 29. That was a problem because "we are facing the carry-over of the Imperial Valley crops," and the Imperial Valley had high yields this year.Brian-KastickBrian Kastick, president of Saven Corp.

Telesis started shipping May 22 this year, which is about 10 days early, he said. "Quality has been fantastic this year. Size is good." But starting prices were low because of the existing glut.

"Once we get that out of the way, I really think it will be a very good market this year," he said. "But it will take about two or three weeks to get through that."

Smythe anticipates "a very good season for quality of onions and for demand for onions as well" once overlapping production from other areas cleans up. "I think you will see the market stabilize and go up, as we just boil down to a couple of places shipping onions, which would be pretty much New Mexico and the Central [San Joaquin] Valley."

"Our crop is good, yield is good, quality seems above normal and we've got good size," Duke Dodder, commodity sales manager for Country Sweet Produce in Bakersfield, CA, said May 30.

The market was oversupplied when the company's onions in the Bakersfield area were ready to harvest, so Country Sweet held off a little at the front end.

"After coming off of very high markets in the winter," he said, spring brought "an oversupply" of onions in the Southern California desert, and that 'brought the market down to the bottom, pretty much. We are holding out hopes" that the market will improve, and there "does appear to be a recovery in sight with the desert heating up and losing some of its quality."

Some other Central California onion-growing areas further north are "facing water issues," and that could affect supplies later in the summer, further strengthening markets, Dodder said. "We are hoping for a little bit of an inverted market" with supplies getting tighter rather than more abundant as the season progresses.

"We have been hearing that there may be trouble with sizing as we get further into the summer season, due to [drought-related] salinity issues of the water -- just lack of quality water," said Dodder. "That has not been the situation down here [at the southern end of the Central Valley] as of yet." So far, "growers like ourselves who have done their homework for over 50 years sit in a good position." However, "moving forward, we all need snowpack next year, or we may see further ramifications throughout the produce industry as a whole."

"The crop looks nice," said Brian Kastick, president of Savannah, GA-based Saven Corp., which grows "Oso Sweet" brand flat yellow sweet onions in California's Imperial Valley and in the Central Valley.

"We finished up a very beautiful crop out of El Centro and we are very happy," Kastick said May 29.

He expected to begin the "Oso Sweet" harvest in the Bakersfield area about mid-June. "Flat sweets have done very well in Bakersfield," he said. "There is just something about that climate in California that produces just a beautiful flat sweet onion."

The company has similar acreage this year to what it has had In the past, and "we are really happy with the quality," he said. "Year after year we have been able to put out one of the nicest onions in the marketplace."

Snow pack may be sorely needed in the mountains to provide surface irrigation and replenish water tables. But "that dry weather in California is perfect for growing a flat sweet with a real nice finish on it," he said.