A depressed onion market last month is showing some early signs of recovery, providing a glimmer of hope to Texas onion producers that this year’s smaller harvest will help to erase the memory of heavy losses experienced last year when the market tanked because of large inventories that exceeded demands.

“Last year was a bad year for selling onions,” reports Texas Produce Association’s John McClung. “After a strong market in 2010, producers planted heavy in hopes of another good year. But in the end, supply was greater than demand and it resulted in low market prices.”

In response, growers reduced onion acres significantly this year, as much as 20 to 30 percent across the state, bringing total acreage for the 2012 crop down to about the same number of acres planted in 2010 when demand was up and prices historically high. At last count, Texas growers planted a combined 9,430 acres of onions. That compares to last year’s 13,000 plus acres of onions.

“Onion acres in the Valley are down significantly and growers around Uvalde and the entire Winter Garden area planted very few onions because of water availability related to the drought,” says Don Ed Holmes with the Onion House in Weslaco. “This has resulted in a much smaller crop.”

Also of significance are fewer onion acres in Mexico this year. Holmes says heavy rains and storms there resulted in a much smaller crop, paving the way for Texas onions to enter the market. As the last of the Mexican onions are shipped out this month, the timing of the Texas harvest will help keep the supply of onions steady.

More promising to Texas growers is the movement of market prices. In mid February wholesale prices had dropped as low as $4 for a 40-pound box of onions, but by the second week of March prices were up to nearly $7 a box.

“And we have reason to believe that by the time Texas onions hit the market later this month and into April, the wholesale price will continue to inch up,” Holmes said, speculating that wholesale prices could reach double digits in the weeks ahead.

But, and as always, much depends on weather in the coming weeks.

“Rains last month came at a good time for onions in the Valley. But what we need now are some sunny days and drier conditions to finish off the season. We have had enough dew and if we get any significant wet weather before harvest it could begin to affect the quality of the crop,” Holmes warns.

As it stands now onions in the field are in excellent shape and yields look “very promising.” If the weather doesn’t dampen expectations, he predicts 2012 could represent a return to brighter days for the Texas onion industry.