Low Harvest, Rising Production Costs Continue to Plague Argentina

Summary

The 2025 har­vest in Argentina is expected to yield around 27,500 met­ric tons of olive oil, with vary­ing impacts across dif­fer­ent regions due to adverse weather con­di­tions. Rising pro­duc­tion costs and lower export prices have cre­ated eco­nomic chal­lenges for pro­duc­ers, who are look­ing to diver­sify into new mar­kets like Asia to off­set losses from other regions.

Producers in Argentina are in the midst of the 2025 har­vest, with this year’s crop esti­mated to reach approx­i­mately 27,500 met­ric tons.

According to data from the Argentine Olive Federation shared with Olive Oil Times, the largest pro­duc­ing coun­try out­side the Mediterranean basin yielded approx­i­mately 35,000 tons of olive oil in 2024 (sig­nif­i­cantly higher than the pre­lim­i­nary esti­mate) and a record-high 44,000 tons in 2023 (also higher than ini­tial esti­mates).

While pro­duc­tion var­ied from region to region, pro­duc­ers in San Juan and La Rioja, respon­si­ble for the major­ity of Argentine olive oil, reported that adverse weather events, includ­ing a cold snap in May 2024, dam­aged trees in the north­west­ern provinces.

“We recently com­pleted the har­vest, and unfor­tu­nately, the over­all bal­ance was not pos­i­tive,” said Jeder Aleua, the head of olive oil pro­duc­tion at La Rioja-based Fincas de Cruz del Eje. ​“During the flow­er­ing stage, we faced adverse weather con­di­tions such as hail, hot winds and extreme tem­per­a­tures, which severely affected flower set.”

“The flow­ers that man­aged to develop showed good growth, but with low oil con­tent due to the lim­ited tem­per­a­ture range. This trans­lated into an aver­age oil yield of approx­i­mately 12 per­cent, a fig­ure lower than expected,” he added. ​“Despite this sit­u­a­tion, we man­aged to obtain good qual­ity oil, thanks to metic­u­lous work and care at every stage of the process.”

Additionally, declin­ing olive oil prices at ori­gin in Europe, com­bined with ris­ing pro­duc­tion costs in Argentina and higher table olive prices, led pro­duc­ers to divert dual-pur­pose vari­eties to table olives for export.

“There isn’t going to be much oil in Argentina this year,” said Julián Clusellas, the pres­i­dent of La Rioja-based Valle de la Puerta. ​“The har­vest was very short, and almost every­thing that could be was diverted for table olives.”

He added that in the company’s groves, frosts in May 2024 dam­aged the buds that later become flow­ers and then olive dru­pes, espe­cially in the lower parts of the trees. 

In neigh­bor­ing San Juan, Solfrut com­mer­cial direc­tor Guillermo Kemp also con­firmed that this year’s har­vest would fall short of pre­vi­ous ones. 

“We con­tinue work­ing on short cam­paigns, and start­ing ear­lier and ear­lier, to avoid cli­matic fac­tors [such as late autumn frosts] and, of course, to pro­duce the best qual­ity oils that can be obtained,” he said.

Further south in Mendoza, pro­duc­ers reported a bet­ter har­vest this year than the pre­vi­ous one. 

“On our farm, we had an aver­age har­vest. One farm had very good pro­duc­tion, while the other was slightly affected by frost,” said Miguel Zuccardi, the head of olive oil pro­duc­tion at Familia Zuccardi. 

“We had to start har­vest­ing a lit­tle later this year because we had a warm fall and delayed our plans to avoid the high tem­per­a­tures,” he added.

Meanwhile, in the cen­tral province of Córdoba, sit­u­ated about halfway between Mendoza and Buenos Aires, Sierra Pura pres­i­dent Veronica Ortega said the region expe­ri­enced a sig­nif­i­cantly higher har­vest than in 2024.

“We recorded a 50 per­cent increase in har­vest vol­ume com­pared to the 2024 cam­paign,” she said. ​“However, some cli­matic fac­tors, such as the lack of the first cold spells in May and late sum­mer rains, caused a slight delay in the ripen­ing of cer­tain olive vari­eties, which extended the har­vest period into June.”

“Not only did total pro­duc­tion increase, but we also man­aged to har­vest vari­eties such as Frantoio, Farga and Barnea with out­stand­ing organolep­tic qual­ity,” she added.

Away from eco­nomic issues, Ortega said her main chal­lenge was deter­min­ing the opti­mal moment to har­vest the olives, strik­ing a del­i­cate bal­ance that max­i­mizes oil yield while pre­serv­ing the organolep­tic char­ac­ter­is­tics.

“We had to bal­ance the need to start the har­vest early — due to the vol­ume of fruit avail­able — with the impor­tance of wait­ing for the per­fect ripen­ing period to obtain an oil with the fla­vor, aroma and nuances that dis­tin­guish us,” she said. ​“Despite these chal­lenges, the 2025 har­vest results are extremely pos­i­tive.”

Expectations of a lower har­vest arise as pro­duc­ers across Argentina face sig­nif­i­cant eco­nomic hard­ship, dri­ven by ris­ing pro­duc­tion costs and lower prices for exports to Europe.

Since President Javier Milei assumed office in December 2023, his admin­is­tra­tion has slashed gov­ern­ment spend­ing in a bid to lower the country’s triple-digit infla­tion rate and the deficit.

Energy sub­si­dies were among the cuts made by the gov­ern­ment, result­ing in an increase in elec­tric­ity and fuel prices.

While pro­duc­ers approved of sep­a­rate gov­ern­ment efforts to loosen restric­tions on imports, such as fer­til­izer and bot­tles, and the repa­tri­a­tion of for­eign cur­ren­cies, the effects of these mea­sures have been can­celed out by the falling prices at ori­gin.

“Olive oil prices at €3,600 per ton are not prof­itable con­sid­er­ing elec­tric­ity costs [to power irri­ga­tion sys­tems] of about $900 (€780) per hectare and an over­all oper­at­ing cost of around $4,000 (€3,500) per hectare,” Clusellas said.

Zuccardi added that prices for elec­tric­ity and fuel have risen faster than infla­tion, which con­tin­ues to decel­er­ate, and gov­ern­ment efforts to devalue the Argentine peso from its arti­fi­cially high rate.

Despite ris­ing costs, some pro­duc­ers said the government’s eco­nomic poli­cies have cre­ated more cer­tainty. 

“The sta­bil­ity of input prices was a pos­i­tive fac­tor that allowed us to plan the har­vest with greater pre­dictabil­ity,” Ortega said. 

Mario Bustos Carra, the direc­tor-gen­eral of the Mendoza-based Cuyo Chamber of Foreign Trade, added that the changes will be good for pro­duc­ers in the long term, but there will be sig­nif­i­cant short-term head­winds.

“The first chal­lenge is address­ing costs, which are off­set by tax pres­sures, labor costs, high input prices, lack of labor to har­vest the crops, etc.,” he said. 

“Furthermore, in olive oil, good European pro­duc­tion has con­tributed to the drop in inter­na­tional prices,” Bustos Carra added. ​“Since Argentina is not a price-set­ter, we must adapt to the fig­ures han­dled by the main pro­duc­ing coun­tries, which have sta­ble economies, strong cur­ren­cies and, fun­da­men­tally, favor­able eco­nomic poli­cies, includ­ing sub­si­dies.”

While chal­lenges mount at home, some pro­duc­ers and exporters agreed that the pre­vail­ing trade pol­icy in the United States may pro­vide a com­pet­i­tive advan­tage for Argentine olive oil in the world’s sec­ond-largest olive oil con­sumer mar­ket.

Even as U.S. President Donald J. Trump announced a ten per­cent tar­iff on Argentine imports as part of his wider tar­iff pol­icy, Clusellas said it was busi­ness as usual with his American clients.

“I think the sit­u­a­tion is going to improve and we will see more demand for Argentine olive oil” in the U.S., Clusellas said.

The Trump administration’s tar­iff pol­icy has been erratic, but Argentine olive oil exporters have never faced the prospect of more than the ​“base­line” ten per­cent tar­iff. 

Exporters from Tunisia and European Union coun­tries, on the other hand, cur­rently have the same ten per­cent tar­iff, but could face sig­nif­i­cantly higher rates if they can­not reach a deal with the U.S.

Kemp, from Solfrut, con­firmed that under the orig­i­nal or revised tar­iff regimes of 28 per­cent on Tunisia and 20 to 50 per­cent on the European Union, Argentine exporters would ben­e­fit, but American con­sumers might not.

“I think [tar­iffs] make the prod­uct more expen­sive for the U.S. con­sumer,” he said. ​“The issue is to see how the final pol­icy looks.”

Similarly to Clusellas, Zuccardi said his com­pany has not felt the impact of the tar­iffs. He expects that slightly higher prices will not deter most con­sumers seek­ing higher-qual­ity extra vir­gin olive oil.

Bustos Carra said the first signs of chang­ing pol­icy in the U.S. toward Argentina date back to the sus­pen­sion of the gen­er­al­ized sys­tem of pref­er­ence for cer­tain prod­ucts, includ­ing olive oil, but he is opti­mistic that Milei’s per­sonal rela­tion­ship with Trump will result in a deal for Argentina.

“Because our coun­try was the first to request a review of tar­iffs in response to the new mea­sures adopted, we are opti­mistic that, both due to polit­i­cal affin­ity and as a con­se­quence of the uni­lat­eral pol­icy pur­sued by the United States, we may gain some com­par­a­tive advan­tages over other coun­tries,” he said.

Aleua added that Fincas de Cruz del Eje was con­tin­u­ing to assess the sit­u­a­tion around U.S. tar­iffs and con­tin­u­ing its efforts to enter new mar­kets.

“When a mar­ket closes, new oppor­tu­ni­ties also open up,” he said. ​“The Asian mar­ket, for exam­ple, rep­re­sents a dis­tant but extremely inter­est­ing des­ti­na­tion, and that’s where we’re focus­ing part of our future strat­egy.”