Effects on economy of global pandemic hammer Malheur County’s onion industry

The local onion industry has been hit hard by the economic impacts of the COVID-19 virus outbreak. (The Enterprise/File).

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ONTARIO – Malheur County’s industry has been nearly scuttled because of nationwide closure of restaurants and a retail grocery market that is saturated.

A one-week surge in buying in March was soon replaced by drop in demand as the impact of the COVID-19 outbreak took hold across the U.S.

The onion industry in the Oregon-Idaho region filled 28,844 rail and truck shipments during the 2018 last season. In contrast, the industry shipped 23,403 onion truck and rail loads for the current shipping season. 

Now onion packers across the valley face a dismal future as a once vibrant market appears stalled indefinitely. That means Malheur County’s biggest economic engine – onions deliver an $80 million economic impact annually – is in trouble.

An April 2 report by the Northwest Farm Credit Services projected that the 12-month outlook for onions was for “below break-even prices.”

“COVID-19 fears and onion quality issues are negatively impacting current prices,” the report said.

“The week beginning March 30 it really started to slow down and it hit a wall because the food service side is practically non-existent and the retail side is full,” said Mick Davie, a market reporter with the U.S. Department of Agriculture in Idaho Falls.

Davie said at one point in March the price of a 50-pound bag of jumbo yellow onions climbed to between $8 and $9. By April 9, that same 50-pound bag of jumbo yellow onions was priced between $5 and $6.

“There is no demand right now. Guys that used to order five to six loads a week now call up and take one load a week,” said Davie.

The preference for the type of onion also changed, said Davie.

“Mostly what the grocery stores are interested in are mediums. No one wants these colossals and supers because that is a food service item. Grocery stores are still coming in with regular orders but nothing like the frenzy the first two weeks when this (COVID-19 virus restrictions) started happening,” said Davie.

The onion market is also in danger of becoming inundated as harvests kick off in other parts of the nation.

“You have onions coming out of the ground in Texas and Georgia and then you will have Walla Walla onions coming out in June and quite a bit of onions coming out of the ground in May in California,” said Greg Yielding, executive vice president for the National Onion Association.

Shay Myers, owner of Owyhee Produce in Parma, said this is the worst economic downturn he’s seen. His onion fields straddle the Oregon-Idaho border.

“It’s done. It’s bad. I have never faced one like this in my 14 years of doing this,” said Myers.

Many local onion packers – near the end of their shipping season – still have product in storage, said Malheur County Extension Agent Stuart Reitz.

“It’s good quality. They just need somewhere to ship them,” said Reitz.

Reitz said it isn’t just the onion industry that is taking a hit from the COVID-19 virus outbreak.

“No one is going out and eating anything,” said Reitz. “So, it is pretty much the whole produce industry that is taking a hard hit.”

Myers said the fallout from the COVID-19 virus outbreak will linger.

“The onion industry in the Treasure Valley has already been challenged substantially for the last couple of years. So, we are going to see evolution and there will be some permanent consumer changes in this as well,” he said.

One change, Myers said, would be the type of onions consumers buy.

“The package business, onions in packages, will probably pick up a larger portion of the market share then they have. That’s because consumers will want to get away from anything handled by hand. The bulk bin idea of the grocery store will be smaller than before,” he said.

Myers believes his industry will still suffer even after the economy restarts.

“You can’t lose all that food service business and even when they come back, does the economy light back up? I don’t see how it can. You can’t shut a restaurant down for two months and think they will jump in and do things normally,” he said.

Grant Kitamura, co-owner of Baker & Murakami Produce Company in Ontario, said his firm is still shipping onions, but not at the rate in mid-March.

At one point, he said, his company was shipping 120 to 125 truckloads of onions a week.

“Now we are probably 20 to 40 a week,” he said.

Kitamura said the “near future” for the local onion industry isn’t good.

Long term, he said, he believes the industry will bounce back.

“We will get some normalcy back slowly. It won’t be like flipping a light switch, but I don’t predict the demise of the onion industry here locally,” he said.

The local industry appears to be banking on that return to normalcy as about the same number of acres – around 20,000 – were planted across the county and in Idaho this year, said Reitz.

“I haven’t heard anyone cutting back on acreage,” he said.

Myers said the local area produces about a third of the onions grown in the U.S.

“We’ve planted every acre we could have planted, and we could easily see at least a 20 percent reduction in onions consumed in 2020,” he said.

The economic hit to the onion industry from the virus outbreak would be unprecedented, he said.

“Life as normal will never be exactly the same as it was before,” said Myers.

Reporter Pat Caldwell: [email protected]

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