Uruguay Anticipates Poor Harvest Amid Pandemic

Summary

Uruguay is expect­ing a sig­nif­i­cantly lower olive oil har­vest in 2020 com­pared to the record-break­ing pro­duc­tion of 2019, with the most opti­mistic esti­mates putting the total at no more than 700 tons. The Covid-19 pan­demic has impacted the har­vest process, with some pro­duc­ers like Gonzalo Aguirre adapt­ing well to the new work­ing con­di­tions, while oth­ers like Sergio Gómez have faced chal­lenges in main­tain­ing pro­duc­tiv­ity due to nec­es­sary social dis­tanc­ing guide­lines.

After a record-break­ing har­vest in 2019, in which Uruguay pro­duced almost 2,800 tons of olive oil, a sig­nif­i­cantly smaller har­vest is expected in 2020.

Climatic effects, includ­ing low tem­per­a­tures and frost at the time of flow­er­ing as well as water short­ages in the sum­mer dur­ing the fill­ing of the fruit, com­bined with many pro­duc­ers enter­ing an off-year to sig­nif­i­cantly lower the expected yield.

The most opti­mistic expec­ta­tions of pro­duc­ers and ana­lysts put this year’s pro­duc­tion total at no more than 700 tons.

Along with the rest of the Southern Hemisphere pro­duc­ers, Uruguayans have also had to under­take their olive har­vest dur­ing the coro­n­avirus pan­demic.

While the small South American coun­try has so far avoided the large out­breaks being suf­fered in many other coun­tries around the world, the gov­ern­ment has still imple­mented a semi-enforced quar­an­tine that is impact­ing pro­duc­ers and their prof­itabil­ity.

Roughly 75 per­cent of Uruguayan olive cul­ti­va­tion (about 25,000 acres) is con­cen­trated amongst a dozen dif­fer­ent pro­duc­ers. The rest of the country’s pro­duc­tion is mostly small-scale oper­a­tions, rang­ing between 25 and 60 acres in size.

Depending on their size and loca­tion, the Covid-19 pan­demic has impacted how dif­fer­ent oper­a­tions are going about the har­vest and mak­ing plans for the future.

Gonzalo Aguirre is the direc­tor and co-owner of Olivares de Santa Laura, a medium-sized pro­ducer located in the north­east of the coun­try, near the Brazilian bor­der. Aguirre cul­ti­vates olives on about 250 acres of land and has become one of the country’s most suc­cess­ful pro­duc­ers, sell­ing his oils both in Uruguay as well as export­ing them abroad.

In his case, the excep­tional sit­u­a­tion has not affected the oper­a­tion of his com­pany, mostly due to the low vol­ume of pro­duc­tion that took place in 2020 com­pared with the pre­vi­ous year.

The olive har­vest­ing and oil pro­duc­ing was car­ried out by his per­ma­nent employ­ees and mem­bers of his fam­ily. Aguirre took the pre­cau­tion­ary mea­sures rec­om­mended by fed­eral health and labor author­i­ties, includ­ing social dis­tanc­ing of 10 meters (32.8 feet) in between work­ers and the use of per­sonal pro­tec­tive gear for the hands and face.

The min­i­mum amount of labor was used in the oil mill. Aguirre said that the staff adapted pos­i­tively to the new work­ing con­di­tions and he did not have any work­place acci­dents.

Luis Repetto is a small olive grower and the direc­tor of Olivar del Bhúo. On a 27-acre farm in the province of Canelones, a few miles out­side of the cap­i­tal city, Repetto allo­cates half of his land to grow­ing three vari­eties of olives and has his own oil mill.

Olivar del Bhúo has adopted stricter san­i­tary pro­to­cols than most pro­duc­ers. In addi­tion to fol­low­ing the rec­om­mended social dis­tanc­ing mea­sures and using per­sonal pro­tec­tive equip­ment, the small-scale pro­ducer also reg­u­larly dis­in­fects the har­vest­ing and milling equip­ment.

Despite already tak­ing all of these mea­sures, Repetto said that he would have liked the fed­eral gov­ern­ment and Asolur, the Uruguayan Olive Oil Association, to send out spe­cific guid­ances for pro­duc­ers.

As a result of the pan­demic, Repetto did not hire addi­tional labor­ers for the har­vest and per­son­ally super­vised and par­tic­i­pated in all the tasks of the har­vest.

In his opin­ion, it was very impor­tant to raise aware­ness among the work­ers who par­tic­i­pated in the har­vest, since many come from rural areas and may not under­stand the sci­ence behind how the virus spreads.

In spite of the set­backs, Repetto man­aged to com­plete his col­lec­tion and pro­cess­ing activ­i­ties in a few days.

Overall, he pro­duced 50 per­cent less olive oil this year than he did in 2019. However, his agro­nomic advi­sor said that Repetto obtained one of the high­est-qual­ity yields that he has seen yet this year.

While some pro­duc­ers have been min­i­mally impacted by the dis­rup­tions caused by Covid-19, oth­ers have had tougher times man­ag­ing the logis­tics of their oper­a­tions.

Sergio Gómez is the owner and direc­tor of Onoser (Olivo Noble), one of the largest logis­tics oper­a­tors in the coun­try. With his fleet of har­vest­ing machin­ery, Gómez serves about 30 dif­fer­ent pro­duc­ers in the cen­tral and east­ern regions of the coun­try.

His main dif­fi­culty has been the trans­fer of per­son­nel between the dif­fer­ent sites where he pro­vided his ser­vices. For this, he had to pro­vide each mem­ber of his team with their own vehi­cle.

Even though Gómez only assists in mechan­i­cal har­vest­ing and the trans­porta­tion of the fruit to the mill, fol­low­ing the nec­es­sary guide­lines for social dis­tanc­ing has slowed down his team’s pro­duc­tiv­ity.

However, the big drop in pro­duc­tion across the coun­try this year has meant that he is not behind sched­ule. Gómez expects to fin­ish har­vest­ing in April, before tem­per­a­tures drop and the rain comes.

Meanwhile, the main olive agribusi­ness of Uruguay, Agroland SA, which makes up 60 per­cent of the country’s olive groves, began har­vest­ing a few days after the coro­n­avirus was first detected, on March 13.

The com­pany is still har­vest­ing and press­ing their olives, but they expect to have a sig­nif­i­cantly lower yield than in pre­vi­ous years.

This com­pany, which has a highly-devel­oped tech­ni­cal infra­struc­ture and labor set up, has three plan­ta­tions in the east of the coun­try and is an impor­tant tourist attrac­tion along with the neigh­bor­ing winer­ies.

The week lead­ing up to Easter Sunday (known as Tourism Week) is one of the most pop­u­lar times for trav­el­ing in Uruguay. However, this year, no tourists flocked to the country’s east­ern seaboard as a result of the government’s pro­hi­bi­tion on open­ing up tourist attrac­tions.

While this will lead to a sig­nif­i­cant decrease in the company’s income, it is expected to sim­plify the col­lec­tion and oil pro­duc­tion work of the estate, since there will be no mem­bers of the pub­lic vis­it­ing the groves and mills.

From a com­mer­cial point of view, the out­look for the future is dif­fi­cult in Uruguay. Sales are prac­ti­cally par­a­lyzed by inac­tiv­ity in the tourism sec­tor, which is one of the main sources of income for Uruguayan pro­duc­ers.

Likewise, the great pro­duc­tion of 2019 has led to a vol­ume close to 600 tons of sur­plus oil, some of which will help feed domes­tic demand but the rest of which is usu­ally exported to neigh­bor­ing Brazil.

The world’s third largest olive oil importer is cur­rently being crip­pled by a rapidly ris­ing Covid-19 infec­tion rate, and as a result, the olive oil trade in the coun­try has been par­a­lyzed, with no clear time­line on when it will restart.

A sig­nif­i­cant num­ber of pro­duc­ers had either a very small or non-exis­tent har­vest this year. They will have to face main­te­nance costs, employ­ment and tax oblig­a­tions with almost no income in 2020.

After a year of low pro­duc­tion, the fol­low­ing sea­son gen­er­ally sees a sig­nif­i­cant rebound, which may pro­vide a life­line to pro­duc­ers who strug­gled in 2020.

The work for the 2021 har­vest will begin in July, at the begin­ning of win­ter, with prun­ing and fer­til­iza­tion. These will require a con­sid­er­able eco­nomic effort and there is no cer­tainty that all pro­duc­ers will be able to effi­ciently per­form these tasks in order to reap the ben­e­fits of a rebound­ing har­vest in 2021.