After Bumper Harvests, a Sharply Lower Yield in Argentina

Summary

Producers in Argentina are prepar­ing for a dis­ap­point­ing 2024 olive oil har­vest, with an esti­mated 40 per­cent decrease in pro­duc­tion com­pared to the pre­vi­ous year due to an ​‘off-year’ in the nat­ural alter­nate bear­ing cycle and adverse weather con­di­tions. Despite the chal­lenges, pro­duc­ers are opti­mistic due to high inter­na­tional olive oil prices and pre­vi­ous good har­vests, but they are wary of poten­tial price drops if Spain has a suc­cess­ful har­vest in the upcom­ing year.

The start of the 2024 har­vest in Argentina is fast approach­ing, with pro­duc­ers across the country’s main olive-grow­ing regions, includ­ing La Rioja and San Juan, brac­ing for a dis­ap­point­ing crop.

While offi­cial data have not been pub­lished, the Argentina Olive Federation (AOF) esti­mated that the most sig­nif­i­cant olive oil-pro­duc­ing nation out­side the Mediterranean basin pro­duced 35,000 tons of olive oil in 2023.

Some antic­i­pated this year’s yield to fall in line with the aver­age of the pre­vi­ous ​‘off-year’ har­vests – about 27,000 tons – while oth­ers expected it to drop even fur­ther.

“The 2024 har­vest will be a short one, with an esti­mated 40 per­cent decrease in pro­duc­tion com­pared to last year,” Julián Clusellas, pres­i­dent of Valle de la Puerta and an AOF board mem­ber, told Olive Oil Times.

Based in La Rioja, the country’s largest olive oil-pro­duc­ing region, Clusellas cited many groves enter­ing an ​‘off-year’ in their nat­ural alter­nate bear­ing cycle as the main rea­son for a lower expected har­vest.

“There were three con­sec­u­tive years of good har­vests, so this year will be a bad har­vest,” he added.

In neigh­bor­ing San Juan, Guillermo Kemp, the com­mer­cial direc­tor of Solfrut and another AOF board mem­ber, agreed with Clusella’s har­vest pre­dic­tion, adding that some olive-grow­ing regions in Argentina had also faced adverse weather con­di­tions.

“This har­vest is likely to be worse than the pre­vi­ous one due to cli­matic fac­tors and because this should be an ​‘off-year’ com­pared to last year, which was very good,” Kemp said. ​“The cli­matic fac­tors have basi­cally been the lack of cold hours in the north – for exam­ple, in Chilecito, La Rioja – and on the con­trary, we have had frost prob­lems in San Juan.”

Victoria Mercado, the gen­eral man­ager of El Mistol, another San Juan-based pro­ducer, agreed that the lack of chill hours in parts of Argentina had exac­er­bated what was already expected to be a low har­vest.

“With this issue of global warm­ing, we had a few hours of cold in the win­ter, with lit­tle ther­mal ampli­tude,” she said. ​“As a result, the olive trees could not pro­duce enough fat to achieve the best yields this year.”

Farther south in Mendoza, the sit­u­a­tion is slightly dif­fer­ent. The province syn­ony­mous with wine pro­duc­tion is respon­si­ble for less than a tenth of Argentina’s olive oil, with pro­duc­ers antic­i­pat­ing the 2024 har­vest to be sim­i­lar or supe­rior to 2023.

Mario Bustos Carro, the gen­eral man­ager of the Mendoza-based Chamber of Foreign Commerce of Cuyo, told Olive Oil Times that the province pro­duced about 2,500 to 2,800 tons of olive oil in 2023.

“[The sit­u­a­tion in the olive groves is] a lit­tle bet­ter than last year, so far,” he said. ​“In Mendoza, the olive har­vest for oil begins at the end of April, the begin­ning of May, but January and February are the time of storms with hail.”

“Some very strong ones have already been recorded, and if repeated, they could affect the quan­tity and qual­ity of pro­duc­tion,” he added, empha­siz­ing that it is too early to tell how the har­vest will play out.

Along with cli­matic chal­lenges, olive oil pro­duc­ers antic­i­pate an increase in pro­duc­tion costs ahead of the har­vest as Argentina’s recently elected gov­ern­ment removes sub­si­dies on elec­tric­ity and fuel to reduce ram­pant infla­tion and cal­i­brate the econ­omy.

While the pro­duc­tion decrease and ris­ing costs will make pro­duc­ing olive oil more dif­fi­cult in the short term, Clusellas said pro­duc­ers will man­age after another poor har­vest in Spain and high inter­na­tional olive oil prices.

Consumption in Argentina remains quite low, with the International Olive Council esti­mat­ing domes­tic olive oil intake to reach 7,500 tons in the 2022/23 crop year (which ended in October), or about 250 mil­li­liters per capita.

As a result, most of the country’s pro­duc­tion is exported to Brazil, Europe and the United States from the port of Buenos Aires. The IOC antic­i­pated ship­ments of Argentine olive oil abroad at 26,500 tons in 2022/23.

“Luckily, we had a very good har­vest in 2023 with good olive oil prices,” Clusellas said. ​“Therefore, olive grow­ers are in pretty good health.”

However, he warned that an aver­age or bumper har­vest in Spain in the 2024/25 crop year would be dis­as­trous for Argentine pro­duc­ers. ​“If the har­vest goes very well in Spain, prices will fall, and Argentine pro­duc­ers will lose prof­itabil­ity,” Clusellas con­cluded.