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Producers in Argentina have har­vested 25,000 tons of olive oil in the 2019/20 crop year, accord­ing to the coun­try’s Ministry of Agriculture, Ranching and Fisheries.

The total is right around where indus­try ana­lysts and pro­duc­ers pre­dicted it would be when the har­vest began in April.

This year’s yield was slightly lower than the pre­vi­ous crop year, in which Argentina pro­duced 27,500 tons, accord­ing to data from the International Olive Council. Overall, pro­duc­tion in Argentina has steadily decreased since the 2017/18 crop year.

“We esti­mate that the decrease in the pro­duc­tion lev­els of the entire olive-grow­ing sec­tor could be due to a loss of prof­itabil­ity for the pro­duc­ers, a prod­uct of the eco­nomic insta­bil­ity of recent years,” Alejandro Ovando, the direc­tor of IES Consultores, an agribusi­ness con­sul­tancy, told Olive Oil Times.

“[This is] added to the lack of access to credit along with the nat­ural fac­tors of sup­ply, which would have caused a decrease in the gross har­vest of olives for the cur­rent cam­paign,” he added.

Persistently low global olive oil prices paired with the taxes imposed on Argentina’s agri­cul­tural exports in 2019 and steadily ris­ing pro­duc­tion costs have made har­vest­ing and sell­ing olive oil abroad increas­ingly less prof­itable.

Ovando said that the Covid-19 pan­demic had also pre­sented new bar­ri­ers to trade for pro­duc­ers.

“There was a decrease in both val­ues and quan­ti­ties [of olive oil exports], due to san­i­tary restric­tions that coun­tries imple­mented on global trade after the appear­ance of the pan­demic,” he said.

The prob­lem is fur­ther com­pounded by stag­nant domes­tic demand for olive oil, which has hov­ered around 7,500 tons per year for the past half decade.

Some pro­duc­ers in the coun­try also blame European Union sub­si­dies, such as pay­ments for the pri­vate stor­age of olive oil, as yet another rea­son why Argentine oils have trou­ble com­pet­ing.

“We do not have good prof­itabil­ity,” Julián Clusellas, pres­i­dent of the Valle de La Puerta olive oil com­pany and a board mem­ber of the Argentine Olive Federation, told Olive Oil Times. ​“The prob­lem with exports is that olive oil is worth noth­ing in the world. The truth is that the price is very bad.”

“The prob­lem about the price is that Europe sub­si­dizes a lot, the sub­si­dies of the European Economic Community are very high and make the price low,” he added. ​“Furthermore, the European har­vest expec­ta­tions are good for the com­ing sea­sons. The link stocks of one cam­paign with the other are high, and all this causes the price to fall.”

In 2020, Valle de la Puerta pro­duced 650 tons of olive oil, a decrease of 450 tons com­pared with last year. Clusellas attrib­uted this drop in pro­duc­tion to most of his groves enter­ing an off-year.

However, Argentina’s largest pro­duc­ers are har­vest­ing and sell­ing enough olive oil that they will get through this chal­leng­ing period. The coun­try’s small pro­duc­ers are fac­ing an even tougher uphill bat­tle.

During the 2020 har­vest, many of these small pro­duc­ers had trou­ble find­ing work­ers to har­vest their olives, a prob­lem com­pounded by the Covid-19 pan­demic.

“Even in instances prior to the pan­demic, pro­duc­ers encoun­tered dif­fi­cul­ties in obtain­ing labor from the so-called swal­low work­ers, who gen­er­ally migrate in search of job oppor­tu­ni­ties, some­thing that did not hap­pen dur­ing this crop year,” Ovando said.

Clusellas attrib­uted this to the eco­nom­ics of the labor mar­ket in Argentina. He said that small pro­duc­ers with tra­di­tional olive groves yield fewer kilo­grams of olives per tree and there­fore pay work­ers less per tree than pro­duc­ers with high den­sity and super-high den­sity groves.

“A worker does not want to go to work at your com­pany when he is not going to get the min­i­mum pay­ment that he needs,” Clusellas said. ​“If it is a few kilo­grams per plant, peo­ple do not want to go because we all pay more or less the same per kilo­gram.”

However, there is some rea­son for opti­mism among pro­duc­ers. Quality of Argentine olive oils has steadily increased and there are efforts in the coun­try to pro­mote domes­tic olive oil con­sump­tion. Not all pro­duc­ers had a poor har­vest, either.

“We had a good har­vest in 2020, greater than the pre­vi­ous year, since we had a more benev­o­lent cli­mate, which helped the flow­er­ing and for­ma­tion of the fruit,” Patricia Calderon, the direc­tor of Establecimento Olivum, told Olive Oil Times.

“Our agron­o­mists fol­low the health and nutri­tion of the plants, which helps us main­tain the qual­ity of the fruit,” she added. ​“Fortunately the cli­mate has worked with us, help­ing improve the good qual­ity of the fruit that has been har­vested.”

As pro­duc­ers across the coun­try strive to keep improv­ing qual­ity, Ovando said that pro­duc­tion lev­els in 2021 are also likely to increase.

“It is prob­a­ble that by 2021 we will observe a sta­tis­ti­cal recov­ery, as a con­se­quence of the cur­rent low lev­els, always sub­ject to an improve­ment in cli­matic con­di­tions,” he said.