US

The 2023 US onion crop harvest is now 75% complete. The extremely wet winter California experienced this past winter impacted plantings in the Central Valley, requiring acreage to be moved to the Tulelake region. The cooler temperatures during the season slowed maturity rates by approximately two weeks. Despite the delayed maturity of some early varieties, year-to-date yields have caught up. Harvest in the Kern area and the Central Valley of California finished at the end of September. Harvest recently
started in the Tulelake region, Oregon, and Washington.

Due to California’s record snowfall and rain this past winter, most reservoirs are at historic capacity levels, and water allocations for agricultural contractors in the CY24 season are starting to improve. The Westland’s Water District declared a 100% water allocation for agriculture this coming season. While this past season resulted in improved water availability, the wet conditions curtailed plantings of row crops in the Tulare Lake Basin, which
experienced flooding this past year, resulting in higher prices for crops such as processing tomatoes, which experienced a +32% increase in grower returns (California Tomato Growers Association). A larger crop is expected next year due to limited plantings, also reducing acreage for other row crops such as onion; therefore, competitive crop pressure is expected to intensify next season. 

Meanwhile, the groundwork for CY24 planting season is taking place. Growers and processors continue to manage higher labor costs and evaluate competitive crop returns for onion compared to other crops. Inflationary conditions experienced in utilities stabilized over the early summer months but started climbing in July. The 2024 outlook for natural gas is pointing to an uptick, potentially impacting CY24 processing costs and fertilizer, but it’s too early to tell. Diesel rates started to climb in July, with another jump in August. Overall inventories across most fractions and quality levels adequately support demand.

Egypt

Due to last year’s increase in production costs combined with overall inflationary pressures, many growers moved to other crops with higher returns and strong demand, such as wheat.

Yellow Onion: The CY22-23 winter onion crop planting decreased sharply over last year due to weak pricing during 2022 and poor fresh onion exports. CY23 onion prices have increased, driven by spikes in farming costs, which have almost doubled. Packaging costs are up 25%, and inland transportation costs are up 15%. Labor costs are also seeing sharp inflationary increases. 

White Onion: Harvest started in May 2023. The CY23 crop has been planted in an inflationary cost environment with higher labor, fuel, and input costs and hikes in ocean freight rates, leading to firmer prices than last year. The Egyptian government has increased grower subsidies and price support for wheat, adversely impacting planted acreage for onion.

Other Markets (India, China, Europe)

India: The CY23 winter crop is reduced compared to earlier indications, leading to a slightly reduced crop for dehydration. Crop year costs are higher, primarily driven by higher input costs, labor and utilizes, and weaker yields. A delayed monsoon and a dry August led the government of India to impose a 40% duty on onion exports through the end of the year to improve domestic
supply in the wake of rising food prices, impacting India’s trading partners. 

China: An upward price correction is likely to happen in the coming months in sync with other origins. This is driven by lower inventories from the last crop. The farmer sentiment for the CY23 crop planting is uncertain as enhanced wheat subsidies could impact grower pricing and acreage.

US

The US CY23 garlic crop harvest began mid-July and is roughly 90% complete. CY23 planted acreage is similar to the previous year. Like onion, crop maturity slowed down due to an unusually wet season and cool spring, leading to a 2 week delay in processing. As with onion, California’s wet winter, and above average snowfall this past winter, water allocations for agricultural contractors are improving.

At this time, the overall crop is forecasted to be slightly down from planned levels due to the excessive rain and wet winter and spring California experienced this past season. Overall inventories across most fractions and quality levels adequately support regular domestic demand. Like US onion, US garlic has also been impacted with similar challenges to growers - with higher labor costs and competitive crop returns. 

China

Garlic planting for the 2023 crop was 15–20% lower than last year – driven by COVID conditions, slow demand for fresh garlic, weak prices, and higher support prices for wheat. Local demand increased once China relaxed its COVID policies in early 2023. Processors face higher labor and processing costs with a continued tightening of environmental regulations. 

Vietnam Spices

Pepper

The 2023 harvest is completed in Vietnam and Cambodia. Harvest started in Brazil in the middle of July. There are concerns regarding the overall production of Brazil as the crop was damaged due to heavy rains and labor shortages. Harvest has begun in Indonesia, and the crop looks to have decreased compared to previous years. Until July 2023, Pepper exports by Vietnam improved by 16% due to the resumption of shipments to China, whereas overall shipments to EU and US were down by 12% and 32%, respectively.

Cassia, Nutmeg & Ginger

Cassia: Vietnam cassia harvest (spring crop) finished in mid-May. Prices were slightly lower than last year. The next harvest (autumn crop) will start in October 2023. YTD July shipments from Vietnam in 2023 are higher than last year. As farmers move to alternative crops, the Indonesian crop has continued to decline over the last few years.

Nutmeg: Nutmeg prices are stable. Unseasonal rains and poor harvest practices may have caused quality issues in 2023.

Ginger: Harvest is completed in Nigeria.