"Practically all green onions for the US market are now grown in Mexico," observed Dave Johnson of Gold Coast Pack in California. "The US just can't compete anymore with the lower labor costs in Mexico and therefore most commercial production has ceased in the country. The only exception is some organic and localized crops."
"Mexico struggled during the summer months with heat and heavy rains affecting plantings and yields," he continued. "Summer is always a tough time and everybody expects it. Therefore, our growers even planted more acreage this year in anticipation for this."
Major supplier goes out of business
If summer always presents a challenge for green onion supply, then what caused the severe shortage and high prices this year? The answer lies in the fact that one major green onion supplier went out of business during the summer. Apart from the supplier ceasing operations, it also caused havoc among green onion growers who were supplying this business. Essentially, those growers were not being paid for their product and promptly finished up with green onions and turned to other crops.
"Many companies start off with a crop they specialize in and then branch out from there," Johnson explained. "Green onions were the primary crop of the major business that ceased operations this summer. Before they stopped the business, growers were saying that they were paying them terribly and by the time they closed their doors, this company owed many people a lot of money. Therefore, a lot of these growers quit growing green onions, taking with them a lot of the supply. This is why we have been seeing prices of $30 a case and more. The disruption caused by the closure of this company and subsequent consequences has affected the market more than any other factor."
Currently, supplies are still very tight and prices remain elevated. Quality is also okay but less than perfect. However, with summer over now, things are likely to improve.
Convenience packs and meal kits changing packaging focus
As more consumers seek out ready-to-eat products as well as smaller, single use portions, some green onion producers are adjusting packaging to suit this category. Additionally, the last few years has seen an increase in the number of companies that make meal kits. These companies are also seeking out more green onions in specially designed bags.
"Growers have noted there is an increased demand for convenience packs," Johnson said. "Many are also getting involved with the meal kit/home delivery companies that want 2 - 3g of green onions in small bags that they present along with the meal. Retailers are buying out companies that are willing to do this on their behalf."
Gold Coast Pack will be exhibiting at the PMA Fresh Summit next month in Orlando. Johnson shared what the company's plans are for the show. "There will be some of our newer items on display at our booth and we will also be launching a few new products. More information about these new products will be presented at the show."
