Climate Extremes, Economic Pressures Dampen 2023 Harvest, Survey Finds

Farmers and millers across the olive oil-pro­duc­ing world are get­ting over one of the tough­est har­vests in recent mem­ory.

In our annual sur­vey, sent to 4,487 pro­duc­ers in 34 coun­tries, respon­dents gave the 2023 har­vest an over­all rat­ing of 51 out of 100, the low­est score since 2018.

Farmers and millers were most dis­ap­pointed with their yield, rat­ing it just 46 out of 100 – but also gave their judg­ment of the qual­ity of their pro­duc­tion the low­est score (72/100) since the sur­vey began.

The despon­dency sur­round­ing yields under­lined the widely pub­li­cized drop in global olive oil pro­duc­tion, which is expected to decline to 2.407 mil­lion tons in the 2023/24 crop year, the sec­ond-con­sec­u­tive decrease and low­est total since 2013/14.

Farmers and millers listed cli­mate change, lack of con­sumer knowl­edge and labor dif­fi­cul­ties among their biggest con­cerns, which echoed the fac­tors they cited as hav­ing most affected the har­vest includ­ing higher pro­duc­tion costs, exces­sive tem­per­a­tures and drought.

Producers believe that olive oil sec­tor stake­hold­ers should focus on stan­dards enforce­ment to reduce fraud, lobby gov­ern­ments for increased sec­tor-spe­cific sup­port and global mar­ket­ing cam­paigns to pro­mote olive oil con­sump­tion.

Climate change remains the top con­cern for pro­duc­ers

Once again, the impacts of cli­mate change remain the most sig­nif­i­cant chal­lenge for pro­duc­ers, with slightly more than 63 per­cent of respon­dents call­ing it one of their great­est con­cerns.

“Climate change, espe­cially drought, has really affected us this sea­son,” said Mehmet Taki of Bata Tarim ve Gida Urunleri in west­ern Turkey. ​“Our pro­duc­tion has dropped by 65 per­cent.”

The impacts of cli­mate change were par­tic­u­larly acute in the Mediterranean basin, respon­si­ble for about 95 per­cent of global olive oil pro­duc­tion, with unprece­dent­edly hot and dry weather dam­ag­ing groves at key moments of olive tree devel­op­ment in south­ern Europe, North Africa and the Middle East over the past two years.

After cli­mate change, pro­duc­ers cited a lack of con­sumer knowl­edge about olive oil as one of their biggest chal­lenges, with nearly 49 per­cent of respon­dents call­ing it one of their most sig­nif­i­cant head­winds.

“Consumers need to under­stand olive oil pro­duc­tion bet­ter and rec­og­nize the excel­lence of cer­tain prod­ucts,” said Adriana Saldarriaga of Lazio-based Casale delle Mille Olive. ​“Otherwise, small pro­duc­ers will not sur­vive.”

This point is espe­cially true in young olive oil mar­kets such as Brazil, where local pro­duc­ers said price is con­sumers’ num­ber one pur­chas­ing cri­te­rion, with many shop­pers unaware of the dif­fer­ences in qual­ity from a ​‘pure’ or ​‘light’ olive oil com­pared to an extra vir­gin.

“It is very dif­fi­cult to sell olive oil in Brazil as it is a coun­try that places lit­tle value on qual­ity extra vir­gin olive oil,” said Flavio Fernandes of Azeite Pedregais in Rio Grande do Sul.

Labor dif­fi­cul­ties ranked third among pro­ducer con­cerns, with 40 per­cent of farm­ers and millers list­ing it among their biggest wor­ries.

Traditional farm­ers con­sis­tently faced chal­lenges in hir­ing enough work­ers to pick the fruit in time, com­pounded by higher wage demands.

“Harvesting has become incred­i­bly expen­sive; they [con­tracted har­vesters] walk away with half of our income,” said one pro­ducer in south­ern France.

“The labor short­age is our most chal­leng­ing issue right now,” added Julio Alves of Quinta dos Olmais in Trás-os-Montes, Portugal.

While cli­mate, con­sumer knowl­edge and labor dif­fi­cul­ties were by far the most promi­nent con­cerns cited by pro­duc­ers, high mar­ket prices (25 per­cent), export chal­lenges (23 per­cent), falling con­sump­tion (19 per­cent), mar­ket com­pe­ti­tion (15 per­cent) and tar­iffs (7 per­cent) were also trou­bling.

Rising costs and extreme weather ham­pered this year’s har­vest

When asked about the events that most sig­nif­i­cantly impacted the 2023 har­vest, pro­duc­ers pointed to pro­duc­tion costs, weather extremes, pests and labor short­ages.

Half of the respon­dents said high pro­duc­tion costs spurred by infla­tion and the con­se­quences of con­flict in Europe and the Middle East impacted their har­vest.

“Prices of fer­til­iz­ers have sky­rock­eted dur­ing the last two years, thus hin­der­ing the amounts used com­pared to the pro­duc­tion needs,” said Mohammed Bakkoury of Morocco-based Tierras de Marruecos.

According to the Spanish Association of Olive Municipalities (Aemo), the cost of pro­duc­ing one kilo­gram of olive oil has increased sig­nif­i­cantly since 2020, ris­ing 64 per­cent when adjusted for infla­tion.

Authorities in Spain said phy­tosan­i­tary prod­uct prices had increased by 70 per­cent since 2020. Energy prices rose by 40 per­cent over the same period.

Farmers and millers across the Mediterranean said higher inter­est rates have made ser­vic­ing pre-exist­ing loans and obtain­ing new ones espe­cially chal­leng­ing for small pro­duc­ers.

After ris­ing input costs, the 2023 har­vest was affected by exces­sive heat, drought and bad weather at piv­otal moments, allow­ing the emer­gence of pests and hin­der­ing har­vest activ­i­ties.

Nearly 43 per­cent of pro­duc­ers said exces­sive heat had affected their har­vest, a sig­nif­i­cant increase from the nearly 36 per­cent who said the same in the 2021 har­vest sur­vey.

Temperatures soar­ing into the high 30s and low 40s across the Mediterranean basin in May dam­aged olive trees as they started blos­som­ing, pre­vent­ing many trees from yield­ing fruit.

With tem­per­a­tures expected to con­tinue ris­ing in the region, farm­ers are look­ing for more resis­tant vari­eties that can with­stand ris­ing spring tem­per­a­tures.

“It is impor­tant to switch to new vari­eties that are able to cope with the ongo­ing cli­mate change,” said Eran Galili of Galili Olive Oil in north­ern Israel. ​“Varieties that can bloom in a hot sum­mer and are ready for a hot sum­mer. It will take quite a few years to adapt our­selves to the new sit­u­a­tion.”

After exces­sive heat, 40 per­cent of respon­dents said drought impacted their har­vest this year, a sig­nif­i­cant rise from the 33 per­cent of respon­dents who said the same in the 2021 har­vest.

“This year, due to the hydric stress from the absence of water in September specif­i­cally, come har­vest time a few weeks later, the olives had shriv­eled up, and the yield was abysmal,” said Albert Cohen of Jaén-based Tropicual, adding that he needed three times as many olives per liter of oil as the pre­vi­ous year.

Despite some reprieve, the United States National Oceanic and Atmospheric Administration said much of the Mediterranean basin remains in a drought due to higher-than-aver­age tem­per­a­tures accel­er­at­ing plant evap­o­tran­spi­ra­tion and pre­vi­ous hot and dry weather severely low­er­ing soil mois­ture con­tent.

While many parts of the Mediterranean basin remain in a drought, sev­eral regions have expe­ri­enced sig­nif­i­cant rain­fall, which helped replen­ish some water sources and cre­ated dif­fer­ent prob­lems for pro­duc­ers.

“In my region [the Croatian island of Šipan], we had a lot of rain dur­ing the sum­mer months, fol­lowed by exces­sive heat. That affected olive trees,” said Mato Goravica of Bonita. ​“In August and September, there was a high infes­ta­tion of the olive fruit fly, caus­ing a lot of dam­age to the olives.”

Overall, 30 per­cent of farm­ers and millers said exces­sive rain­fall affected their har­vest this year, and 33 per­cent said the olive fruit fly, pro­lif­er­at­ing in warm and wet weather, impacted their har­vest.

Along with rain, spring hail storms in parts of Turkey also con­tributed to the coun­try’s dra­matic pro­duc­tion decrease com­pared to its record-high har­vest in 2022/23.

“Poor weather con­di­tions and frosts at the end of March did a lot of dam­age to the olive flow­ers and fol­low­ing pro­duc­tion,” said Turkish olive oil pro­ducer Mustafa Safa Soydan. ​“For some elderly farm­ers, there has never been such a poor har­vest since 1990.”

High olive oil prices help and hin­der pro­duc­ers

Since the International Monetary Fund began track­ing global olive oil prices in 1990, there has never been a steeper price increase than the one expe­ri­enced over the past 12 months.

Between November 2022 and November 2023, global prices, adjusted for infla­tion, rose by nearly 65 per­cent, soar­ing from $5,145 to $8,891 per ton.

Thirty-five per­cent of farm­ers and millers said the higher prices had a pos­i­tive to a very pos­i­tive impact on their busi­ness com­pared to 21 per­cent of respon­dents who said it would have a neg­a­tive or very neg­a­tive impact. The remain­ing 41 per­cent said ris­ing prices had no mate­r­ial impact.

According to sur­vey responses, farm­ers and millers were in two minds about ris­ing prices: one camp said they help off­set higher pro­duc­tion costs and lower yields, while the other wor­ried that high prices were encour­ag­ing fraud and adul­ter­ation as well as forc­ing more price-sen­si­tive con­sumers to either buy less olive oil or switch to cheaper alter­na­tives.

Michail Athanasiou Sakellarios of Athanasios Sakellarios Farm said high prices could be a help­ful tool for pro­duc­ers to edu­cate con­sumers who take olive oil for granted.

“In Greece, olive oil is being used every day for cook­ing, so it is a prod­uct that is taken for granted,” he said. ​“Consumers were used to very low retail prices (€4.5 to €6 per liter), whereas the aver­age pro­ducer would get €2.5 to 3.5 per kilo­gram.”

“In a small-scale econ­omy like Greece’s very frac­tured agri­cul­tural sec­tor, the prices paid to the pro­ducer usu­ally did not cover the pro­duc­tion cost,” Athanasiou Sakellarios added. ​“Now that those prices have tripled, the pro­ducer finally earns some money and makes a profit, but the aver­age con­sumer has a hard time buy­ing olive oil for every­day use.”

Laurence Deprez-Zenezini of Umbria-based Cultura Viva said high prices give pro­duc­ers a unique oppor­tu­nity to inform the pub­lic about what it takes to pro­duce extra vir­gin olive oil and why it stands out.

“There is a major oppor­tu­nity around edu­ca­tion on olive oil pro­duc­tion, health ben­e­fits, and qual­ity,” he said. ​“Without this, olive oil remains a com­mod­ity, and con­sumers expect to pay €10 a liter or less. This is a prob­lem.”

However, ris­ing inter­est rates and his­toric infla­tion lev­els caused many buy­ers to reduce dis­cre­tionary spend­ing, includ­ing olive oil.

“Consumers com­plain about the high prices, and the result is for them to order lower quan­ti­ties than usual,” said Arianna De Marco of Cantasole in Puglia.

Taki of Bata Tarim ve Gida Urunleri, who expe­ri­enced a 65-per­cent decrease in his har­vest due to drought, summed up both sides of the pric­ing argu­ment:

“Higher prices are com­pen­sat­ing part of our losses,” he said. ​“However, we are afraid of their long-term neg­a­tive effects, such as increased fraud and deter­ring con­sumers from buy­ing olive oil. We hope that pro­duc­tion lev­els and prices will nor­mal­ize as soon as pos­si­ble.”

Government sup­port in fight­ing fraud cited as a top pri­or­ity

While farm­ers and millers con­tem­plated the ben­e­fits and chal­lenges of high prices, many agreed that the sec­tor’s pri­or­i­ties should be to curb some of their con­se­quences.

Sixty-three per­cent of respon­dents said stan­dards enforce­ment to reduce fraud in the mar­ket­place should be a pri­or­ity for pro­duc­ers and other stake­hold­ers.

“Fraud reduc­tion would be a huge asset and help the California indus­try sur­vive here in the United States,” said Karen Tallent of The Groves on 41.

While high prices are one fac­tor that encour­ages fraud­sters to act, other pro­duc­ers worry that this year’s drop in pro­duc­tion will result in ris­ing lev­els of adul­ter­ation to meet the demand for extra vir­gin olive oil.

“It’s to our dis­ap­point­ment that due to short­ages in extra vir­gin olive oil pro­duc­tion world­wide and espe­cially in Greece, pro­duc­ers and traders inten­tion­ally offer low-qual­ity olive oil or blended and adul­ter­ated ones,” said Dimitris Katsanos of Alpha Pi in north­east­ern Greece.

Along with stan­dards enforce­ment, 50 per­cent of pro­duc­ers said the sec­tor should receive increased gov­ern­ment sup­port.

“The reduc­tion of pack­ag­ing costs and bureau­cracy such as organic label and offi­cial analy­sis, spe­cific for small or tra­di­tional rain­fed farms [should be a pri­or­ity],” said Marije Passos of Passeite in Portugal.

Gian Luca Buscaglia of Umbria Tellus in Italy added that author­i­ties should con­sider ​“state sub­si­dies for ship­ping costs; sub­si­dies for pro­cess­ing costs (mills)” to help keep small-scale farm­ers oper­a­tional in the chal­leng­ing macro­eco­nomic envi­ron­ment.

Meanwhile, Zeynep Belger of Zayto believes that gov­ern­ments have a role in pro­mot­ing the organolep­tic qual­i­ties and the health ben­e­fits of extra vir­gin olive oil.

“As a high-end extra vir­gin olive oil pro­ducer, the main chal­lenge is to define my prod­uct as a high-qual­ity food and not just a com­mod­ity,” Belger said.

“Consumer infor­ma­tion and edu­ca­tion will play a role,” she added. ​“Governments should sup­port olive pro­duc­ers that respect sus­tain­abil­ity as it is good for peo­ple and the planet.”

Belger’s com­ments tie into the need for a world­wide pro­mo­tional cam­paign to increase olive oil con­sump­tion, which 45 per­cent of respon­dents said must be a pri­or­ity for the sec­tor.

“The con­sumer needs to appre­ci­ate the dif­fer­ence between high-qual­ity olive oil and olive oil,” said Jeff Martin of California-based Frantoio Grove.

Beyond these, 32 per­cent of pro­duc­ers said car­bon credit pro­grams should reward olive grow­ers, while 22 per­cent called for more pro­grams to attract work­ers to rural regions.

Amid the trade ten­sions over the past five years and his­toric infla­tion lev­els in the past two, only 13 per­cent of pro­duc­ers called for tar­iff reduc­tions and other mea­sures to reduce prices at retail.

Rising role of tourism in the olive oil busi­ness model

Olive oil pro­duc­tion is a low-mar­gin busi­ness, and every way to cut costs or increase rev­enue is nec­es­sary to pre­serve the eco­nomic case for small-scale and tra­di­tional pro­duc­ers.

Perhaps as a result of mak­ing the math work, not to men­tion the nat­ural beauty of an olive grove, two-thirds of respon­dents said they wel­come tourists to their mill, grove or facil­ity.

Forty-five per­cent of respon­dents described the impor­tance of tourism to their over­all busi­ness as impor­tant to extremely impor­tant, with 12 per­cent say­ing it was extremely impor­tant.

Meanwhile, more than 37 per­cent described tourism as less impor­tant or unim­por­tant to their busi­ness. About 18 per­cent described it as some­what impor­tant.

For pro­duc­ers wel­com­ing tourists, tast­ings were the most com­mon activ­ity, with 87 per­cent of respon­dents offer­ing the expe­ri­ence. Separately, 61 per­cent offer estate or har­vest tours and nearly 39 per­cent run courses or work­shops.

Taking advan­tage of the fact many olive groves are sur­rounded by stun­ning scenery, about one-quar­ter of respon­dents said they offer their groves and asso­ci­ated infra­struc­ture as an events venue, and 22 per­cent said they wel­come overnight guests.

While tourism pro­vides an oppor­tu­nity to edu­cate con­sumers about olive oil qual­ity and con­vert a curi­ous con­sumer into a life­long cus­tomer, pro­duc­ers said Byzantine leg­is­la­tion in some places must catch up.

“To be an agri­tourism [oper­a­tor in Umbria], you’re required to have at least three hectares and higher earn­ings in agri­cul­ture than hos­pi­tal­ity,” one pro­ducer said.

“You can­not give your guests a true expe­ri­ence or taste of your farm and labor unless you can afford a HACCP kitchen,” she added.