Garlic glut sparks spice plant closure. 275 jobs gone forever?

Olam America will shut its Firebaugh spice plant and warehouse by Aug. 30, according to a notice posted with the state Employment Development Department in the past week. The facility is the former De Francesco dehydrating plant purchased by Olam in 2009. The notice says the closure is permanent and that 275 workers will be laid off.

But Firebaugh City Manager Ben Gallegos says the Olam plant manager has told him the closure is temporary and the Western Fresno County food processor would close only for a year and then reopen. The idea, Gallegos was told, was to clear a surplus of ingredients that has built up. The plant processes local vegetables like onion and garlic to make spices used by food manufacturers.

For how long?

Whether the layoffs are permanent or last for a year, “the news is devastating for our community with the loss of so many jobs,” says Gallegos.

Olam, based in Singapore, is one of the world’s leading suppliers of agricultural products and food ingredients, sourcing 14 products from more than 52 countries.

No one from the company would comment.

UC Cooperative Extension farm advisor Tom Turini says he works “with OLAM personnel on production issues frequently (as I do with the other garlic/onion producers/processors) and I was unaware of the plant closure. Vegetable production in the westside was up by more than 20% from 2021 to 2022 and yields were very good in 2023, but this is the first time that I had heard mention of a surplus.

Garlic is an important commodity in California, where almost all of the U.S. garlic is grown. Garlic has been in the top 10 commodities in Fresno County for several years. “However, there could be more involved in any creation of a surplus (if that is the case) than higher levels of domestic production,” Turini says.

“There are several very large sources of garlic internationally, but I am not aware of any issues globally specifically creating an issue for garlic. The US International Trade Commission extended the antidumping duty order on fresh garlic from China in May 2023 for an additional five years, so that has not changed” says Turini. The import duty was placed on Chinese garlic that had been drastically undercutting domestically grown garlic until the duty was put in place.

Globally, the U.S. accounts for a small percentage of garlic production. In 2022, China produced about 79% of the global garlic supply, and the U.S. less than 1%, according to the The Food and Agriculture Organization of the United Nations.

Global stage

“Garlic production has been high in California the last couple of years, but because of the relatively small role we play globally, I would suspect that if there were a surplus, which I am not aware of, it is likely to have something to do with global markets,” Turini says.

Indeed, farmers here stand tall in garlic, with the annual garlic festival now set in 2024 for September.

California grows all of America’s production of garlic and Fresno County — not the well-known Gilroy area — grows 77% of all U.S. garlic.

Onions too are a big crop in Fresno County with over 15,000 acres planted in 2021, valued at $113 million but falling to 10,780 acres in 2022.

In 2022 — the latest year data is available — the total value of Fresno-grown garlic was $352 million. While we grow plenty of garlic in Fresno, China grows 73% of all garlic worldwide at 21.3 million tons compared to Fresno County’s 185,000 tons of the pungent vegetable.

Fresno garlic acreage is 23,230 acres while Santa Clara County — home of Gilroy — grows only 400 acres. Nearby Monterey County has 3,200 acres.

But Olam still has a large garlic processing plant in Gilroy.

In 2021, the U.S. imported about 225 million pounds of garlic, both fresh and dried, mostly from China. But that converts 112,500 tons — an amount less than California’s production.

Reason enough to celebrate

A local agricultural promotion group has stepped forward to organize the 2024 California Garlic Festival, this year in Los Banos, in western Merced County.

The Noceti Group, led by Danica Noceti, is a third-generation farmer whose family turned event organizers, and will carry the mantle of the beloved festival.

Scheduled for Aug. 30-31 and Sept. 1, the California Garlic Festival promises to be a celebration of community and agriculture, inviting attendees to indulge in a variety of delicious garlic-infused dishes.

But there will not be much celebration in Firebaugh.

Olam Spices made the news in 2023 when they agreed to pay $4.5 million as part of a settlement to resolve claims it didn’t pay its California employees minimum and overtime wages. The settlement benefits individuals who worked as a non-exempt or hourly non-exempt employees at Olam West Coast Inc.’s Fresno, Firebaugh, Hanford, Lemoore, Gilroy or Williams locations in California between July 7, 2011, and Sept. 22, 2021.

Olam Spices — which rebranded in October 2021 as olam food ingredients, or ofi — is a spice distributor that partners with farmers and manufacturers around the world to sell spices to consumers.