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Auerbach looks for ‘very good year’ in garlic business with orderly marketing

Garlic prices over the past 18 months or so, not only in the United States but globally, have been “at a very high level” according to Paul Auerbach, president of Maurice A. Auerbach Inc. in South Hackensack, NJ.

California growers see a fairly normal crop for the season just underway. But China has a larger crop than it has had in two years, with an increased volume coming into the U.S. market. “We foresee it is going to put a little downward pressure on an elevated market,” Mr. Auerbach said July 25.

“We are hoping it is not going to be a bad market” such as those occurring several years back when an excess of Chinese garlic flooded the U.S. market. Rather, as prices come off the prolonged high levels, he looks for and hopes for not a sharp decrease but “just … a normalization and stabilization to an orderly market,” he said.

“Specifically in the California [garlic], we are looking forward to a good year,” Mr. Auerbach continued. The harvest of California early garlic was nearing a completion and the late garlic harvest had begun. “From what I have heard, the later varieties are a little nicer in appearance than the earlier varieties,” he said. “We expect the late varieties to be of better quality, and we look forward to a much more orderly marketing as [the season] goes along, coming off a period of 18 months of extremely high garlic pricing for pretty much all types and all countries of origin.”

The California crop “will always bring a premium over the Chinese,” but with more garlic in the world market in the year ahead, they won’t be as high as they have been. “I just hope the fact that there is a little more Chinese around won’t terribly affect the market. I hope it is more a case of back-to-normal levels, normal pricing, normal supplies, more so than oversupply,” he said.

“But with China you never know what they are going to put in the North American market,” he added. “They are such a big factor that if they steer a little more or a little less of their product here, it could have a geometric effect on us.”

Auerbach Inc. handles garlic from all producing areas, including not only California and China but also Argentina and Mexico. “We are coming off an Argentine season where procurement costs were not only higher than usual but the highest for … the whole Argentine season that I have ever seen,” Mr. Auerbach said. Prices have spiked higher at times, but never for sustained periods, and that was due to strong demand from markets around the world, he said.

“We as a company … also had a good Mexican purple [garlic] deal this year,” he said. Prices for that also were at “a high level,” and the product was “very high-quality. The growers we work with are a family in Mexico we have worked with for 30 years, and the product from Mexico continues to be excellent.”

The second half of July was a transition time for the garlic market “from old crop to new crop” and from a “tight market” into “an expectation of more product, Mr. Auerbach said. Currently, there is “a big shortage in the market here,” not only in whole fresh garlic but in peeled garlic as well. “Everyone is scrambling for product.” But with the California season under way and the Chinese product just starting to arrive, and with more Chinese garlic, both fresh and peeled, on the water, he expected reasonably normal volumes to be available on both coasts by the end of the first week in August.

Auerbach Inc., which handles a wide assortment of specialty products, is “a many-faceted business,” Mr. Auerbach said. In the “whole northeast quarter of the United States,” the company is “one of the leaders in foodservice supply, one of the leaders in retail supply, and one of the leaders in wholesale supply. We sell most of the terminal markets in the Northeast.”

In recent years, “we have expanded our area,” he said. “We used to just be in New York.” Now the company has customers from Chicago and Canada to Atlanta.

The company has operated out of the same warehouse and distribution facility for the last 17 years, but late this fall will be moving into a newly renovated facility with “double the square feet and five times the refrigeration,” better docks and a new packing area, Mr. Auerbach said. The new facility is located in the same general area as the existing one.

“We are excited about our place in the garlic industry,” he said. “As we move forward with our new facility, we just think that will put us in … a better strategic position to service the northeast quarter of the United States with our specialty produce items” and most particularly with garlic, which is still “what we are known for and what we grew up with.”