In its latest assessment of global trade, USDA estimated fiscal year 2009 agricultural exports at $98.5 billion, down $17 billion from last year's record high. U.S. agricultural imports are forecast at a record $81 billion.
These days it seems that everything from textiles to technology is imported, and as cheaper, foreign goods grow in popularity, many domestic industries struggle to maintain market share.
A case in point can be found in the U.S. garlic industry, where a flood of Chinese imports over the past decade has driven more than 50 percent of the nation's large-scale growers out of business. But America's largest producer and processor is taking steps to regain its share of the domestic market. David Miller explains.
Referred to as everything from the stinking rose to an essential ingredient for life, garlic has grown in popularity over the past 30 years. Its strong flavor has been used by chefs around the world for centuries but it fell out of favor for many years in the United States. Over the past few decades, garlic has returned to its role as a common cooking ingredient in American cuisine.
One of the companies benefiting from the resurgence is the Gilroy, California-based producer and processor, Christopher Ranch. Since 1956, the family owned business has been spreading the word about garlic.
Bill Christopher, President and CEO, Christopher Ranch: "The coolest things about working in the garlic business you know garlic is fun. People have fun with garlic. ...and it's just, it's a little niche of a vegetable market. There's not a lot of competitors because it is, it's not cheap to get into this market. You have to grow your own seed, there's very few buyers, so there's it's a very tight industry and there's four of five other guys that we work, that we know that are in the garlic business and that's fun. You know we're friendly competitors."
According to USDA, of the approximately 400 million pounds of fresh garlic sold in the United States annually, California producers were the dominate source until 2004. That year, Chinese growers, who have been steadily increasing their market share since the early 90s, finally moved past the 200 million pound mark in U.S. sales. Today, China controls 75 percent of the world's garlic production.
In an attempt to keep Chinese farmers from dumping cheaper product on the U.S. market, the federal government imposed a 377 percent tariff on garlic imports in the mid-90s. And attempts by Chinese growers to circumvent the tariff do not sit well with American growers and processors like Christopher.
Bill Christopher, President and CEO, Christopher Ranch: "...there's a tariff that was put in place ah they brought in garlic through Vietnam and through Chile through other countries to get around that. There's some new shipper review laws that if they get one shipper at zero percent then they'll all ship under the same number. Their persistence of trying to get into our market at you know at unlawfully low prices is something that has surprised me."
Despite Chinese penetration in the market, the Christopher Ranch staff is always working to increase sales and awareness of the small vegetable. One venue has been the Gilroy Garlic Festival. Co-founded in the late 70s by Don Christopher, the company's founder, the festival now attracts more than 100,000 people each year.
Bill Christopher, President and CEO, Christopher Ranch: "Well the garlic festival was started 30 years ago to kind of promote the city of Gilroy and the fact that they brought more garlic into this city than any other place in the United States and it just kind of steam rolled from there where people would come to the first festival and taste the garlic and taste all the different things you can do with garlic and it just became a fun place to be..."
What began as a luncheon for food writers and chefs from around the country in 1978 has become a premiere event for the industry. Activities include the crowning of a garlic queen and a cook-off where regional chefs compete for a $5000 purse with dishes that include both garlic and another secret ingredient.
The celebration, held midway through the garlic harvest also gives back to the community. Over the past three decades the festival's Volunteer Equity Program has donated more than $8,000,000 to local Gilroy charities.
When Don Christopher started farming more than five decades ago he grew garlic on just a small portion of his operation along with other fruits and vegetables. As Don has backed away from his role as CEO, Bill Christopher, his son, has taken over an operation that now owns 3,000 acres, rents 3,000 more and has a line of fresh, chopped and pickled garlic products that can be found everywhere from grocery stores to white table cloth restaurants across the United States.
Christopher Ranch proudly claims the title of the largest packer of the multi-million dollar fresh garlic industry in the United States by processing 60 million pounds annually. Christopher Ranch employees also pack other vegetables including bell peppers, shallots, and ginger shipped-in from Hawaii.
Though it's not his preference, Christopher will satisfy customer requests for less expensive Chinese products but he includes his own warning.
Bill Christopher, President and CEO, Christopher Ranch: "When you see our Christopher Ranch label that's just California garlic. Some of our customers will take Chinese bulbs and then take our chopped and fresh garlic in jars. So we, we're not going to turn the business away but we do inform them that it is an inferior product and let them make the choice."
To ensure the quality of the garlic coming to the processing plant the Christopher Ranch staff closely controls every phase of production. They choose the land, supply the seed, and tell contracted land owners when to irrigate and when to harvest. The company then relies on an employment agency to find field hands to bring in the crop.
When the harvest is in full swing, the 500 regular employees at the processing plant can be joined by up to 500 more seasonal workers depending on the load. Because of the opportunities and benefits offered by the company many of the full-time employees have been with Christopher Ranch for decades.
Bill Christopher, President and CEO, Christopher Ranch: "What's the lure of staying here at Christopher Ranch? Well we've been in business for 52 years now and you know I took over for my dad the last couple years. It's a family business so I think people kind of have to feel a little bit closer to the ownership if they have problems or things they would like to talk about it's real easy to come to us and get things taken care of. We're also able to make decisions quicker than bigger corporations. It doesn't take us a board of directors and four or five months to get a change."
And Christopher remains dedicated to taking the company into the future with a vision of what markets to pursue and how to maintain what he already controls.
Bill Christopher, President and CEO, Christopher Ranch:"...it's just about doing things better and marketing our product and just getting more information at the consumer. Where as before consumers just knew there was garlic. Now they have to know that there's California Garlic and everybody else."
For Market to Market, I'm David Miller.