Texas onion growers were riding high in 2010. Demand was strong and market prices for the season averaged $20-$40 for a 40-pound box for sweets throughout the deal. In 2011, growers put more onions in the ground, bringing Lone Star State onion production to 13,064 acres. Predictably — at least in hindsight — overproduction led to plummeting prices and Texas growers suffered through two difficult years, despite a 30 percent reduction in 2012 acreage.
For 2013, Texas onion growers reduced that even further, shaving about another 20 percent off total acreage and are heading into a fairly strong market for their season window.
Along the way, though, several growers have dropped out of the deal. Some quit altogether, others decided not to plant this year and instead sold their water rights to other growers in the parched and drought-plagued state.
So what does the future hold for Texas onions, especially sweets? There was a time not too far gone when Texas began to establish a consumer reputation as a favorite for deep-fried colossal onions. Chain restaurants competed to have the biggest “blossoms” in town and many touted the Texas roots of their offerings. As locals are fond of saying, everything is bigger in Texas.
But Texas growers were unable to capitalize on that momentum. The novelty wore off and the window of opportunity to brand gigantic sweet onions with an unforgettable Texas trademark disappeared. Meanwhile, the Texans’ counterparts in Vidalia, GA, were having a heyday as their product rose to a prominent spot in consumers’ minds.
“Texas has been packing the 1015 sweet onion since the early 1980s and yet here we are still struggling,” said Mike Martin of Rio Queen, which markets its 1015s as “Rio Sweet” and is the state’s largest grower. “I think we have some reputation among retailers; I just don’t think we have enough of a name among the ultimate consumer, the housewife. I don’t know if we’re ever going to get there, we’re not investing the dollars as an industry to get there. Individually, as a producer, Rio Queen is trying to do it with quality, with packaging, with service. Retailers are going to carry sweet onions, we know that, so our job is to be sure they’re ours — we need to be the winner. As a state, I’m afraid we’re never going to get consumer notoriety and I really don’t think we will because we’re not spending the money as an industry.”
“Eighty percent of the dang onion market is psychology to begin with,” said Don Ed Holmes, head of Weslaco, TX-based The Onion House.
Unseen market forces drive consumer behavior, Mr. Holmes explained. The faith of buyers, not sellers, plunges economies into recession or lifts them to boom times. Marketing or luck creates demand for certain items while others of equal quality and/or value fall by the wayside. Often, success is all about timing.
There are other factors in play in the Texas onion deal. Persistent water worries are a fact of life. Competition from other growing areas is increasing. Instability in Mexico is a threat, though one that could actually benefit Texas growers — fewer Mexican onions would mean more room for the Texans on the market.
“The window has changed for Texas,” Mr. Martin said. “I think Texas is still an important part of the onion industry but the window is different compared to what it used to be. With today’s technology — and that means genetics, the ability to store, yields, mechanical harvesting, all these things that have happened in the Northwest that make them much more competitive in the traditional onion market, not the sweet onion market — it’s almost impossible for the fresh crop onions to compete based on the quality [the Northwest] is able to produce and store after mechanical harvesting. They’ve got phenomenal yields so their cost of production is excellent, many have invested in highly mechanized harvesting and in their packing process. They have a long season and can afford to do that. The Texas guys can’t do that with a fresh crop.”
It does not help matters that the Texas sweet onion deal is bookended by the Northwest storage crop and the Mexican deal, and the April start of the Vidalia season. While the Texas season runs from January-May with good volume, it is nigh impossible to compete with the Vidalia brand once that season gets underway.
“What we have to focus on in Texas is doing specialty packaging, focus on quality, focus on fresh, focus on sweet and mild onions, it’s a combination of all those things,” Mr. Martin said. “We can’t take the whole sweet onion category, there are sweet onions all over the place so we can’t control the category and if anybody has control it’s Vidalia when they start. What we can do is do a great job servicing our customers, give them a fantastic product and we’ve got to do it in a competitive way. The days of just doing 50-pound sacks in Texas are gone.”