14 Aug

Californian table olive growers get record prices as acreage shrinks

By Ching Lee,

California olive growers are expecting excellent prices for this year’s crop, which is projected to be 112,000 tons, up considerably from last year’s 16,800 tons.

After a disastrous crop in 2006, California table olive growers are poised to receive some of the highest prices ever for their fruit this year, but many fear growers who have suffered years of financial losses will abandon the olive business and remove more trees from production.

“We simply can’t afford to lose any more olive acreage if we hope to maintain our share of the market,” said Adin Hester, president of the Olive Growers Council of California.

The Visalia-based bargaining cooperative reached an agreement with processors Bell Carter Olive Co. in Corning and Musco Family Olive Co. in Tracy to pay growers top prices for their best crop this year.

Growers with good tonnage and fruit size could get as much as $1,150 a ton for their Manzanillo olives and $925 a ton for Sevillano olives. Prices for smaller sizes range from $650 to $350 a ton for Manzanillos and $350 to $300 a ton for Sevillanos. Undersized fruit go for $10 a ton.

“These represent the best prices paid to growers in the history of the California table olive industry,” Hester said. “With inventory at the lowest level in years, the industry needs a good crop to keep supplying the retail and food service markets.”

This year’s crop is estimated at 112,000 tons, considered normal compared to 2006′s 16,800 tons. Growers delivered only 16 percent of their normal crop last year because late spring rains caused pollination problems, Hester said. Those with fruit received an average of $900 a ton, a good price compared to other years when growers received $500 to $400 a ton.

Hester said farming costs have skyrocketed in recent years to a point where farmers are removing their trees, and healthy price increases are a must if growers are to continue growing and producing olives.

“We’ve got to have some better stewardship for them in the field or they’re going to continue to take olives out of the ground, and as a result, the industry is going to just fall on its face,” he said. “We’re trying to send a message to growers who are getting very frustrated with the industry and are leaving it. Our acreage has shrunk dramatically, so we’re trying to get a message out that there is a positive vision down the road.”

Table olive acreage has declined to approximately 28,000, down from about 28,800 last year. Hester said the current acreage could be inflated because it doesn’t take into account trees that are no longer in production. He estimates that the state’s farmed acreage could be as low as 26,000 this year.

Despite good prices this year, growers suffered yet another blow when Sysco, a major food service company, announced that they are going to buy all of their black ripe sliced olives offshore. The company represents 5 percent to 6 percent of California’s table olive market.

An added concern of growers is the availability of labor to hand harvest the 2007 crop, which is expected to begin in mid-September. Growers also are worried about having enough water to grow their crop, and some are switching to well water as district supplies diminish.

“Water is very critical to olives,” Hester said, and continued irrigation is needed to get the olives to size up. “As you look at that pricing schedule, it’s easy to tell that if you produce a lot of small fruit, you’re certainly not going to enjoy the good prices.”

He also noted that growers pay a penalty for a certain percentage of cull olives that they deliver to the processor. That includes fruit that is colored, broken, severely bruised, diseased and insect infested. For example, growers are deducted $75 per ton if their delivery contains 7 percent to 10 percent cull fruit and $150 per ton for 10 percent or more cull fruit.

Processors are imposing these penalties to discourage growers from leaving fruit on the trees too long. Some growers like to keep their olives on the trees to boost the oil content, which in turn gives more weight to the overall tonnage, Hester said. But too much oil affects the quality of the fruit, making them too soft for processing.

“Growers get paid by the ton, so the heavier the fruit is, the more they make,” he said. “But there’s a point of diminishing returns, and when that happens, in the past, it was the processor that had to deal with those problems. But now the processors are saying we can’t have that. If you want us to pay good prices for the olives, you have to bring us good-quality fruit.”

[Source] California Farm Bureau

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