Growers and Producers in Italy Anticipate a Challenging Harvest

Rising production costs combined with lower-than-expected yields in some parts of Italy will force many olive-related companies to make tough decisions.

Cisternino, Italy
Sep. 27, 2022
By Paolo DeAndreis
Cisternino, Italy

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The resilience of Italian olive grow­ers is being put to the test ahead of the 2022 har­vest. Farmers face rapidly ris­ing pro­duc­tion costs and the con­se­quences of one of the dri­est years on record.

In its recently-pub­lished report, the Institute of Services for the Agricultural and Food Market (Ismea) warned that pro­duc­tion in the 2022/23 crop year could fall well below the 329,000 tons of 2021/22.

The dis­pro­por­tion­ate increase in energy costs is likely to make pro­duc­tion and pro­cess­ing activ­i­ties for com­pa­nies in the olive oil sec­tor finan­cially and eco­nom­i­cally unsus­tain­able.- Cristiano Fini, pres­i­dent, Confederation of Italian Farmers

Ismea attrib­uted the pro­duc­tion decrease to many regions enter­ing an off-year’ in the olive tree’s alter­nate bear­ing cycle, the effects of which have been exac­er­bated by the severe drought and intense heat waves.

Olive oil pro­duc­tion in Puglia and Calabria – the two largest pro­duc­ing regions in the coun­try, which account for more than half of the national yield – is expected to drop sig­nif­i­cantly. Ismea expects cen­tral Italian regions such as Tuscany to recover some of their pro­duc­tion poten­tial after recent rain­fall.

See Also:2022 Harvest Updates

However, the agency added that more pre­cise har­vest esti­mates would not be avail­able for a few more weeks.

Regardless of how the har­vest goes, farm­ers and millers face another set of chal­lenges posed by stag­ger­ing rises in a range of pro­duc­tion costs. For exam­ple, diesel and nitro­gen fer­til­izer prices have increased by 129 per­cent and 170 per­cent, respec­tively, a recent report found.

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The dis­pro­por­tion­ate increase in energy costs is likely to make pro­duc­tion and pro­cess­ing activ­i­ties for com­pa­nies in the olive oil sec­tor finan­cially and eco­nom­i­cally unsus­tain­able,” Cristiano Fini, the pres­i­dent of the Confederation of Italian Farmers, told Olive Oil Times.

He added that the ris­ing costs come on top of the immense pres­sure the sec­tor already faces from extreme weather events, water short­ages for irri­ga­tion, the con­tin­ued spread of Xylella fas­tidiosa and the olive fruit fly infes­ta­tions.

Coldiretti, a farm­ers’ asso­ci­a­tion, and Unaprol, an olive pro­duc­ers’ asso­ci­a­tion, warned of a 30 per­cent drop in olive oil pro­duc­tion, with at least 9 per­cent of olive-related com­pa­nies at risk of clos­ing down due to the exces­sive costs.

Lower yields and ris­ing costs have forced many olive grow­ers to invest fewer resources to main­tain their trees, which also is expected to impact future olive pro­duc­tion.

We are close to the start­ing of the 2022/23 crop year, and farm­ers need to get ready for a com­plex har­vest which could become even more dif­fi­cult given the uncer­tain­ties among olive oil millers,” Fini said.

In the last few weeks, many of them have expressed con­cern for high energy costs and the crazily high bills com­pa­nies are receiv­ing nowa­days,” he added. Some have sug­gested that they might even not open their mills at all.”

According to Ismea, Italian farm­ers have seen their costs rise 24 per­cent in the first six months of 2022, led by increases of 50 per­cent in energy and 36 per­cent in fer­til­izer. Overall, olive grow­ers have recorded a 19-per­cent increase in costs in the first half of 2022 com­pared with 2021.

In its report, Ismea said many of those unex­pected costs result from global sup­ply chain issues and ris­ing infla­tion, both of which have been exac­er­bated by the Russian inva­sion of Ukraine.

See Also:Best Olive Oils From Italy

Rising costs have spread to all sec­tors of the olive and olive oil econ­omy, from pro­duc­ers to con­sumers, many of whom have been bur­dened by ris­ing energy bills and food prices.

The Confederation of Italian Farmers esti­mates that trans­form­ing a quin­tal (100 kilo­grams) of olives will cost between €11 and €27 this year, depend­ing on the region and tech­nol­ogy.

But we are also report­ing high costs for bot­tling and pack­ag­ing mate­ri­als, with costs at least dou­bled for glass bot­tles, tin cans, card­boards and plas­tics,” Fini said. All of this will inevitably affect olive oil prices for the con­sumers.”

In its report, Ismea noted most olive oil com­pa­nies also expect extra vir­gin olive oil sales to decrease as fam­i­lies look to cheaper alter­na­tives to save money. Inflation is now at 8.4 per­cent,” Fini said. This means that fam­i­lies must make hard choices and turn to lower qual­ity prod­ucts.”

The gov­ern­ment should imme­di­ately enact pro­duc­tion cost con­tain­ment poli­cies, such as caps on nat­ural gas and elec­tric­ity prices, while also sup­port­ing fam­i­lies with bonuses or wage adjust­ments because on food and health we can­not and should not econ­o­mize,” he added.

The chal­lenges of the 2022 har­vest come as annual olive oil pro­duc­tion fig­ures con­tinue to fall in Italy. According to the International Olive Council, Italy pro­duced an aver­age of 597,000 tons of olive oil from 2000 to 2010. However, these fig­ures fell to slightly more than 350,000 in the fol­low­ing decade.

Such reduc­tion is due to sev­eral fac­tors, such as the phy­tosan­i­tary emer­gen­cies such as Xylella fas­tidiosa in Salento and cli­mate change, which is impact­ing on the main phe­no­log­i­cal phases of the olive tree,” Fini said.

“[Other fac­tors include] the reg­u­la­tory reform regard­ing the olive fruit fly, which banned the most effi­cient pes­ti­cides used to cur­tail its spread and intro­duced bio-con­trol means whose effi­cacy is often lim­ited by the effects of cli­mate change,” he added. We should also con­sider the non-renewal of the olive groves. Due to reg­u­la­tions, in Italy, it is still very com­plex to replace scarcely pro­duc­tive olive trees.”

According to Ismea, Italy’s olive sec­tor turnover reached approx­i­mately €3.2 bil­lion in 2019, rep­re­sent­ing 2.2 per­cent of the whole eco­nomic value of the Italian agri­food indus­try.

Olive farm­ing rep­re­sents a pil­lar both for occu­pa­tion and for the econ­omy, so we need to con­tinue to invest in the sec­tor at all lev­els – research, edu­ca­tion, new mills and com­pany renewals,” Fini con­cluded.



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