Assemble a couple hundred people for a field day on California olive oil production and somebody is certain to make a quip about foreign oil.
This time it was Gino Favagrossa, orchard manager at Fresno State University, who finds himself at the center of what has become an oil rush: “We’re trying to take back our own market from foreign oil, and it’s not what you put in your tank.”
The statistics that are helping drive the planting of thousands of acres of olives for oil each year in California are inviting for those staking out the hot new crop:
• Consumption of olive oil in the United States totals 70 million gallons annually.
• California, which produces nearly all of the nation’s olive oil, produces less than 1 percent of that amount.
• That means that the remaining 99 percent comes from abroad. It truly is foreign oil.
And it’s no small irony that it was olives from abroad that helped send the state’s table olive crop into decline at the same time California’s olive oil acreage has ballooned.
Those table olive imports – coupled in more recent years with weather anomalies – have brought a dramatic decline in table olive acreage in California.
The table olive acreage has dropped from 40,000 in the 1980s to about 26,500 today. Meanwhile, the olive oil acreage has risen to nearly 21,000, and much of that growth has been in just the past five years.
Some industry leaders are predicting the growth in olive oil acreage could continue at a pace of about 5,000 acres per year. They say it was on track to increase at 10,000 acres until the recession slowed the trend.
The first harvest at the 20-acre orchard at California State University, Fresno, came in 2005, about the time that the growth in plantings of super high density orchards began to boom.
Because mechanization is commonly used on those orchards, Favagrossa said, that increased the appeal to growers looking to diversify. Added appeals included the lower water demands and the fact that the crop is plagued by fewer pests.
Favagrossa is president of the board of the California Olive Oil Council in Berkeley, which claims to represent about 90 percent of the state’s growers of olives for oil. The industry group has been touting health benefits and working on labeling standards for extra virgin olive oil.
Favagrossa and Council Executive Director Patricia Darragh have been sharply critical of a lack of federal standards for olive oil.
“We have become a market for oil that is potentially adulterated or mislabeled,” Darragh said. She recommends looking for the extra virgin olive oil seal from the Council when shopping. And her organization is continuing to press for stricter labeling requirements at the state and federal levels.
Although exports are a tiny part of the California olive oil picture, Favagrossa and Darragh traveled recently to Germany to explore the prospects of exports to that county.
One reason for the trip was to look into replicating the model set for California wines.
“It’s a way of expanding our reputation, playing in that arena,” Favagrossa said.
As with wines, there’s an appetite abroad for product from California. Olives, like wine, “came of age in the Old World.”
And Favagrossa offers advice akin to leaders of California’s wine industry when it comes to venturing into growing the crop for oil: “Research the market side; this can work for even the smaller growers because there are a lot of processors, but be sure to have a contract.”
Steve Blank, an agricultural economist with the University of California, Davis, said the high density olive oil industry is “an infant industry a long way from maturity,” and much of the money being made these days is going to processors and nurseries.
Those who have vertically integrated operations – processing their own olives or with good agreements with olive mills – stand to fare better, he said.
“But I think the outlook for the market in total is good. People like olive oil, and once the domestic industry lets more people know it is of a higher quality, there are good market prospects. The money is not in delivering an undifferentiated product. As a wine grape grower said, ‘There is no money in the grapes. It’s in the wine.’”
“Olives are a perfect product to follow the wine grape model. Our domestic product is superior,” he said, adding that he was shocked a couple years ago to find bottles of imported olive oil priced at $20 and $30 each for sale in Napa Valley.
Neither olive oil nor table olives are strangers to the California scene.
Franciscan Monks brought olives to the New World and moved north through the missions of Mexico. In 1769 the first olive cuttings were planted in California at the San Diego Mission.
High demand for olive oil spurred more plantings in the 1800s. And a table olive industry has been a fixture for decades.
Today, the table olive industry is struggling. “This was our third disappointment in four years,” said Adin Hester, president of the Visalia-based Olive Growers Council of California. In just the past 10 years, the industry has lost 5,000 to 6,000 acres.
This year, growers took small solace in receiving the highest prices in industry history, topping out at $1,250 a ton. That was because the yield was so low — just 25,000 tons, less than half of what was expected. The drop was blamed on cold weather in April and heat in May that affected bloom.
One challenge to the table olive industry is to come up with a mechanical harvesting method that would address the high cost for labor. Louise Ferguson, a UC researcher, is among those studying ways to adapt mechanical harvesting in the table olive industry, something that Hester says can be “an engineer’s nightmare” because of the variation in sizes, shapes and age for trees on which table olives are grown.
“We’re now talking about engineering the plantings for the machine,” Hester said, “perhaps using higher density, but not the high density for oil where it’s 600 trees per acre, thicker than hair on a dog’s back.”
Dan Flynn, executive director of the UC Davis Olive Center, said super high density is considered more than 500 trees per acre. High or medium density is about 200 trees per acre, he said, adding that 75 percent of the acreage of trees for oil in California is in the super high density category. “The rest is either medium or low.”
He said a conservative estimate of the number of California growers for olive oil is about 600. The center is doing a survey on where the state’s acreage is located.
Carl Nelson, president and CEO of Cullen Creek Olive Oil in Sanger, said there are probably between 200 and 250 olive mills in California. His plant was established in 2007, and Nelson said Cullen is among the top three processors in the United States. His intention is to become a major player in the processing of olive oil.
“It’s great to deal with a product that’s been around for 6,000 years,” Nelson said. “And it can be pretty easy to transition to this from raisins or wine and table grapes.”
Fresno State contracts with California Olive Ranch, headquartered in Oroville, the state’s leading producer-processor, to turn its olives into oil. California Olive was the first to plant super high density orchards in 1999, said Gregory Kelley, president and CEO.
Kelley said his company has 4,500 acres of its own and processes another 5,000 acres on contract. It has two mills in the Sacramento Valley, including a state of the art facility in Artois.
Kelley said that hand-harvesting just three acres took 8 hours for 26 people, resulting in a cost amounting to about $8 a gallon – just for harvesting. With mechanical harvesting, it would take just three hours for one person driving the harvester and another driving a tractor pulling the gondola into which the olives are harvested. That harvest cost would amount to about $1.10 a gallon.
He puts the cost for mechanical harvesting at about $300 per acre.
But Kelley said mechanical harvesting has benefits that go beyond the cost issues. It also means that olives can be quickly moved through the milling process, meaning they are fresher when harvested. “The best oil is produced from fresh fruit,” he said, not fruit that is left to ripen too much or that is left in the orchards as it is accumulated by hand over long periods.
Growers shoot for production of about 5 tons per acre. “That’s easier to achieve in a tree that’s four or five years old,” said Paul Vossen, a UC farm adviser for Sonoma and Marin counties. “It’s a challenge to maintain that high level of production as trees put on more growth.”
In later years, Vossen told those at the Fresno State workshop, there will be issues in keeping the productive growth as the orchard matures.
“You can’t spend hundreds or thousands of dollars an acre pruning,” he said. “Right now we’re in a honeymoon period. But how do we maintain this high level of production?”
Vossen believes that will be a key challenge in the years to come and will involve collaboration with researchers abroad.
Principal producers on olive oil internationally include Spain, Italy, Greece and Tunisia, said Joan Tous from Spain’s Investigacion y Technologia Agroalimentaria. Tous is working with The Burchell Nursery in Oakdale on research into areas that include resistance to verticillium wilt, oil quality and dwarfing rootstock.
Tous said other emerging countries in production of olive oil include Australia, Argentina and Chile.
Vossen talked of benefits to growing olives for oil — including the fact they can grow in lower grade soils, and have fewer pests and lower water needs. He did warn growers that verticillium wilt, often found on land used to grow cotton or processing tomatoes, can be a significant problem for olive trees. That’s clearly a consideration for San Joaquin Valley growers out to leverage lower water availability as they look for alternatives to those standbys.
As olive trees grow, Vossen said, irrigation levels can be reduced to help manage the vigor of trees, so they do not add too many leaves that will shade the crop. If fruit is too moist or full of water, he added, it can be more difficult to extract the oil.
“Olives are real interesting critters,” he said. “Other fruits pump up and get size, but you don’t necessarily want that.”
Vossen also showed the roots of the trees go down only between 18 and 24 inches, meaning there is little need to irrigate or add nutrients below that level.
“Our growers are smart,” Vossen said. “They have shown they will produce a high quality product, and the market is huge. We could plant 50,000 acres and that would still only be a dent in U.S. consumption.”
Still, he advises growers to “be careful how much you spend; you have to do this right and be frugal.”