Croatian olive growers are reporting a stronger harvest than last year, despite months of intense heat and drought. Yet as mills process the new crop, producers say high operating costs and a 25 percent value-added tax on milling services are eroding their returns.
The prolonged harvest remains underway in parts of Dalmatia, with growers generally reporting satisfactory yields and healthy fruit. The final production figures will not be known until milling is complete.
“Better than last year,” Ante Vulin, an olive grower from Pakoštane who cultivates about 1,000 trees near Lake Vrana, told Olive Oil Times.
Vulin recalled that Croatia imported more olive oil than it produced last year, a difficult season for growers in Zadar County. There, 6,450 metric tons of olives were harvested and 1,906.5 hectoliters of oil were produced, nearly 40 percent less than the previous year, according to figures cited by the grower.
“Those who pruned and irrigated this year will not be short of oil, despite the weather extremes,” Vulin said.
Local agronomists, including the late Ante Medin of Zadar, have long emphasized the importance of pruning. Agronomist Šime Marcelić and colleagues also highlighted the benefits of maintaining open, well-managed canopies.
Marcelić said properly pruned trees can bear fruit throughout the canopy rather than mainly along its outer branches. Favorable spring conditions supported flowering and fruit set, but prolonged summer heat subsequently disrupted fruit development.
Zadar received 38 millimeters of rainfall in June and only a little more in early July. From then until mid-September, much of the region experienced virtually no rain. The drought delayed pit development and reduced olive flesh growth, leaving many groves with smaller fruit.
Heat slows oil accumulation
Oil begins accumulating in olives as the pit hardens, generally in late July and August. Extreme heat interrupted that process in unirrigated groves, particularly where temperatures reached 40 ºC. Some fruit shriveled, dried out or fell before welcome rains arrived in the second half of September.
Vulin noted that a higher oil-extraction percentage does not always mean that the fruit has produced more oil. As olives lose water, the proportion of oil by weight can increase even when the absolute quantity of oil changes little.
Growers with irrigation, including Vulin, could begin milling in early October. He said the early-harvest oils showed desirable sensory characteristics, including fruitiness, pungency, and balance, along with high polyphenol concentrations.
The unusually hot summer also had a favorable consequence: reduced pressure from the olive fruit fly, a pest that can seriously damage crops.
Toni Družijanić, an agronomist and president of the Zadar County Olive Growers Association, agreed that high temperatures slowed ripening and oil accumulation. He also said groves with more organic matter in the soil, particularly on rocky terrain and islands, were better able to withstand heat and water shortages.
Družijanić owns Orkulo, a business whose crews have provided professional harvesting services over the past month.
According to local specialists, July and August heat suppressed two generations of olive fruit flies, leaving relatively little visible damage. A third generation has not appeared in significant numbers, they said, although growers still need to harvest promptly.
More immediate concerns are autumn rains and strong winds, including the northeasterly bora and southerly jugo, which can knock ripe olives to the ground.
Agronomist Zvonimir Vlatković, of the Agriculture Ministry’s agricultural advisory service, estimated that Zadar County has about one million olive trees carrying roughly 10,500 metric tons of fruit this season.
“If everything can be harvested, we should produce around 13,500 hectoliters of olive oil,” Vlatković said. He expects national production to reach approximately 55,000 hectoliters, substantially more than last year.
The economics of a better harvest
A good crop does not necessarily translate into a comfortable profit. One local producer offered a breakdown of the costs of harvesting 2,136 kilograms of olives and producing about 250 liters of oil, with an extraction yield of about 12 percent.
His direct production expenses totaled €2,040, including €750 for milling at €0.35 per kilogram of olives. Selling the oil at €20 per liter would generate €5,000 in revenue, leaving €2,960 after those direct expenses.
That figure does not account for the grower’s labor or family members’ work over several months, which substantially reduces the effective return.
For consumers, olive oil prices in Zadar County are expected to remain near last year’s levels, although some producers anticipate 10 to 15 percent increases to offset rising input and labor costs.
Unbranded olive oil sold directly by family farms generally costs €13 to €15 per liter, while premium branded oils can command €20 or more. Prices in specialty shops range from €20 to €25 per liter, with some Istrian oils selling for €25 to €30.
A short break during the olive harvest
Mill owners also face higher electricity, heating oil and replacement-part costs. One owner of a Zadar-area mill, who asked not to be identified, said he had kept processing fees unchanged for two years.
“Out of solidarity with growers, we have not raised milling prices since the year before last,” he said. “This year’s rate of €0.35 per kilogram of processed olives would be even lower if the state did not impose the full 25 percent VAT rate.”
The tax treatment contrasts with reduced rates applied to olive milling in other Mediterranean countries. An Italian mill lists a 4 percent VAT rate, Portugal restored a 6 percent rate for olive-to-oil processing in 2026, and Spain applies a 10 percent reduced rate to qualifying agricultural services.
For the Croatian growers interviewed, the difference adds to an already difficult cost structure. The 25 percent VAT applies to the milling charge, not the value of the harvested olives or oil.
Quality depends on timing and storage
Stjepan Dević, an agronomist and executive committee member of the Zadar County Olive Growers Association, described the season as generally successful, particularly for the local Oblica variety.
“Despite the dry year, in our part of Dalmatia we can generally speak of a good olive-growing season with a large crop,” he said.
Conditions were less favorable on some islands and poorer sites, where drought caused limited fruit drop. Pest damage along the coast, however, remained relatively low.
Dević said the abundant crop has also prompted some growers to sell olives before milling because they lack sufficient space to store the resulting oil.
He emphasized that the optimal harvest window varies by cultivar. Citing Italian olive specialist Giorgio Pannelli, Dević said Leccino has a relatively short period for producing top-quality oil, roughly from mid-September to early October, while Istrian Bjelica can yield excellent oils later, from late October into early November.
Proper handling after milling is equally important. Freshly extracted oil may contain moisture and small particles of olive flesh that settle in storage. If the sediment is not removed within roughly 30 to 45 days, unwanted fermentation can produce the defect known as muddy sediment (borra), affecting aroma and flavor.
Growers are therefore advised to use clean containers, rack the oil when needed and consider filtration to protect quality during storage.
International awards face customs charges
Growers raised another complaint unrelated to the harvest: charges imposed when international olive oil awards are shipped to Croatia.
Croatian producers have won Gold and Silver Awards at the NYIOOC World Olive Oil Competition, but some say they have been required to pay customs-related charges on trophies shipped from the United States.
The issue arises when customs treat a trophy’s declared production value as the value of an ordinary imported good. Producers say contesting the charges can be time-consuming, and some pay rather than risk having the shipment returned.
Nino Brajković, a physician from Šibenik, said he paid €55 in charges to receive an award from New York. Zlatko Burić, an award-winning grower and president of the Zlatna Šoltanka olive growers association on the island of Šolta, urged him to appeal.
“Nino, you should not have paid customs duty,” Burić told him. “You need to file an appeal. We go through this every year because international honors are exempt from customs duty under the law.”
European Union rules provide relief from import duties for qualifying noncommercial honorary awards, including certain cups, medals and symbolic articles, when the required conditions and documentation are met. Whether a particular shipment qualifies can depend on its circumstances and the import procedure.
Branimir Šunić, secretary of the Zadar County Olive Growers Association, called for a consistent procedure that would recognize eligible award shipments without individual disputes.
“It is unacceptable for every olive grower to have to fight a private battle with bureaucracy,” Šunić said. He urged the authorities to establish a clear process for recognizing official shipments from international competitions.
Growers call for tax reform
The growers and millers interviewed said lower processing taxes could free up money for grove management, irrigation, and equipment improvements, helping smaller farms remain competitive.
For now, many Croatian producers expect a healthier crop and more oil in 2025 than in 2024. Their concern is how much of the financial benefit will remain after they pay the costs of cultivation, harvesting, and milling.