Nurseries in Spain Are Running Low on Olive Tree Seedlings

Summary

Spain’s olive cul­ti­va­tion area increased by 0.73% in 2023, but nurs­eries in Andalusia are strug­gling to meet demand for new olive tree seedlings due to high olive oil prices and inter­est from investors. The shift towards high-den­sity olive groves is attrib­uted to water scarcity in the region, with farm­ers replac­ing water-inten­sive crops with olive trees that require less water and labor.

The 2023/24 har­vest is already in the rearview mir­ror, and farm­ers in the world’s largest olive oil-pro­duc­ing coun­try are prepar­ing to plant new olive trees.

While recently pub­lished data show that the olive-grow­ing sur­face area in Spain con­tin­ued to increase in 2023, nurs­eries across the south­ern autonomous com­mu­nity of Andalusia are hav­ing trou­ble meet­ing demand for new olive tree seedlings.

In a new report, Spain’s Ministry of Agriculture, Fisheries and Food said olive cul­ti­va­tion rose to 2,788,084 hectares in 2023, an increase of 0.73 per­cent com­pared to last year, slightly above the aver­age for all woody crops.

However, nurs­eries across Spain’s largest olive oil-pro­duc­ing region say they do not have enough new seedlings to meet ris­ing demand, with some telling local media that reser­va­tions for new olive trees run through 2025.

La Conchuela, a well-known nurs­ery in Córdoba, the sec­ond-largest olive oil-pro­duc­ing province in Andalusia, told EFE Agro that high olive oil prices at ori­gin, falling almond and pis­ta­chio prices and grow­ing inter­est from pri­vate equity groups and invest­ment funds were behind the short­ages.

A wet start to 2024 com­bined with higher pro­duc­tion in the 2023/24 crop year than pre­vi­ously antic­i­pated has seen olive oil prices fall from their his­toric highs, but prices remain well above any pre­vi­ous time.

Olive oil pro­duc­tion in Spain rebounded from the his­toric low of the pre­vi­ous sea­son to 831,0000 tons in 2023/24, abat­ing fears from some experts that the har­vest would once again fail to exceed 700,000 tons.

As a result of the rain and bet­ter pro­duc­tion, a kilo­gram of extra vir­gin olive oil now sells for €7.000, down from the record-high €8.988 in mid-January. However, cur­rent prices are still more than dou­ble what they were in April 2022.

Nurseries across Andalusia also attribute the seedling short­age to the rise of high-den­sity and super-high-den­sity plan­ta­tions.

They are observ­ing a shift in Spain away from tra­di­tional olive groves – where pro­duc­tion costs reach about €4.50 per kilo­gram of oil pro­duced – to high-den­sity and super-high-den­sity, which often have pro­duc­tion costs of less than €1 per kilo­gram.

Nurseries see this shift due to the vari­eties of olive tree seedlings that are now in the high­est demand, includ­ing Picual.

The vari­ety respon­si­ble for roughly one-third of global olive oil pro­duc­tion is widely used in irri­gated, high-den­sity olive groves. Along with local demand, nurs­eries report increas­ing sales to farm­ers in France, Portugal and Italy.

Some offi­cials in Andalusia attribute the ris­ing demand for olive tree seedlings to the his­toric drought expe­ri­enced by the Iberian penin­sula and chang­ing demo­graph­ics.

As reser­voir lev­els remain well below aver­age, farm­ers in south­ern Spain are sub­sti­tut­ing water-inten­sive crops, such as toma­toes, corn and rice, for high-den­sity olive groves, which con­sume less water and require less labor.

• EFE Agro