When Ken and Joan Dugan decided to plant one of country Victoria’s first olive groves eight years ago, they hoped to produce one of Australia’s finest extra virgin olive oils.
Now, their oil is sold in most Australian supermarkets, in major supermarkets in the United Kingdom, in Asia and the United States and has won dozens of awards.
Demand for their products is so high, they buy in extra oil from local producers.
Olive oil is a burgeoning industry in Australia, and country Victoria, with 27 per cent of all olive trees, is fast establishing itself as the nation’s Tuscany.
This year, Australia is expected to produce 10,000 tonnes of olive oil, with experts predicting that to rise to 30,000 tonnes within the next five years.
Spain produces 40 per cent of the world’s olive oil, with Italy the second largest producer at 10-15 per cent.
With three million tonnes of olive oil being produced around the world each year, Australia’s contribution is just 0.3 per cent.
However, just 15-20 per cent of all olive oil is extra virgin. As that is the only olive oil Australia produces, our share in that market is close to five per cent.
With European growers suffering poor crops due to a severe northern summer, Australian producers are hoping to capitalise on a predicted olive oil shortage and make strong headway into international markets.
Australian Olive Association president Paul Miller says in the early 1990s, few people knew much about growing olives in Australia.
Yet a decade later, he says, more than half of the oil Australia produces is already being exported overseas.
Mr Miller says olive growers in Australia have had to be smart about how they farm olives to keep costs down and quality high in order to compete with international producers.
Like the wine industry, he says olive growers use the latest technology to detect soil moisture, determine when to water, and balance crop growth, and they use mechanised pickers.
“Only about 16 per cent of olive trees are irrigated worldwide. Most of the groves in Europe are on dry land,” he said.
“In Italy, they tend to have a crop every second year because they don’t have the water to bolster the growth of the tree. And Spain is the same.
“I think that technology gives us a significant edge.”
Mr Miller says the freeing up of water rights in country Victoria was a significant factor in farmers turning to olives.
He says not only has that meant greater water efficiency in farming, olives are also providing a better return on water than paddocks full of sheep.
Mr Miller says of the estimated 9-10 million olive trees across Australia, about two million are in Victoria. Almost half of those trees are at the Timbercorp grove in Boort in central Victoria, with another 300,000 at Boundary Bend Estate in the state’s north-west.
With just 20,000 trees, the Dugan grove at the 300-acre Cobram Estate is considered boutique.
Since their first harvest in 2001, they have sold out of production and now buy in more oil than they make themselves to supply their supermarket brand oil.
Despite their success, they’re yet to see a return on a multi-million dollar investment.
“I would say we have probably spent at this stage about $4 million in developing our farm and our operation,” he said.
Mr Dugan says he’s prepared to keep going “as long as it takes” to make money, and he’s hoping to break even at last within the next two years.
But he says the sustainability of the Australian market is yet to bear out, as many groves had yet to reach maturity and their full oil potential realised. He knows of at least two smaller groves that already have hit the wall.
Mr Dugan says one of the biggest financial hurdles for Australian growers is competing with European subsidies.
Almost 50 per cent of European production is subsidised, giving an automatic cost advantage.
On top of that, Australian olive oil is slugged with a 10 per cent duty in Europe.
Mr Dugan says he approached the federal government unsuccessfully about introducing a similar tariff on olive oil imported into Australia.
But Victorian Farmers Federation horticulture group president Peter Cochran is also concerned about the environmental impact of the olive explosion.
“One of the things we’re very, very concerned about is that the trees actually spread quite rapidly if left unattended,” he said.
“In Mildura, they’re a real problem. When trees are let go they just keep spreading.
“All of a sudden they’re out on the roadside and in bare ground. They’re just causing problems.”
Mr Miller says the industry is aware of the issue and it is being worked into a code of conduct.
But he says olives aren’t a special case and many other horticulture industries face the same problem.
Mr Miller sees a bigger problem for the industry in educating Australian consumers about good olive oil, its health benefits and encouraging them to buy local.
“People need to understand why extra virgin olive oil is the best and why Australian oil is the freshest and tastiest.”