Garlic

August 1, 2018

USA
Garlic harvest started around the 7th of July, typical for the Californian season. Weather has been good in the growing area, which is quite concentrated in the Central Valley of California, versus onion which is grown throughout the State. We are experiencing higher grower costs as land rents continue to climb in the Central Valley. Many growers are switching over from row crops (onion, garlic, watermelon, tomatoes, etc.) to more permanent crops (almonds, pistachios, walnuts, etc.), which means less availability for land to grow onion and garlic crops. Farmers are looking to increase their revenue base with less water intensive growing operations. New food safety regulations plus added labor costs related to wage and insurance increases are driving up operating expenses. More information will come regarding pricing by end August into early September.

China
The Chinese garlic market is fairly quiet leading into new season compared to the excitement looking into May 2017 crop. Field research and reports coming from the growing regions are indicating 2018 will be a bumper garlic crop. Pricing at origin is on a sharp decline with the indications of a bumper 2018 crop, this has continued the prices of fresh and dried garlic to soften. It is estimated that this tendency will last through the new season. Stimulated by the prosperous markets in the past two seasons the planting areas have continued to grow and the 2018 planting capacity is outside of the regular Chinese growing patterns. It is forecasted that the yield of fresh garlic will reach 6 – 6.5 million pounds. Due to a possible abundance of fresh garlic, this will all be pushed into dehydrated production which according to the industry information the capacity of dehydration nationwide could reach 8000mt per day. This means the yield of dried garlic flake 2018 could reach amazingly high inventory levels if all remains constant during the whole harvest season. Added to this an expected carryover of 2017 crop dried garlic which is estimated to be around 0.1 million metric tons.