The good news for California olive growers is prices paid by the state’s two primary canners of table olives will average slightly more than they paid last year.
But this good news comes a bit late for Dave Hails, who for 15 years has operated his 40-acre olive grove southwest of Woodlake.
“We won’t have this conversation this year because I’ll be out of here,” said Hails.
He plans to sell his orchard and get out of the olive business after he harvests his latest crop, because the business of farming combined with the challenges of growing olives is getting too hard.
Those challenges include costly regulations that have increased over the past couple of years for most every California farm and higher labor costs, in part because the state will start phasing in a higher minimum wage.
And then there are the challenges of finding people to hire to harvest table olives, a very costly and labor-intensive job, as trees have to be trimmed and harvested by hand to avoid damaging the fruit, unlike nuts and olives for making olive oil, which can be mechanically harvested more cheaply, Hails said.
“The labor is hard to find, because a lot of the people we rely on are in construction, or they moved back to Mexico,” Hails said.
Most sectors of California’s ag industry are facing similar problems finding labor, as workers from Mexico and other Latin American countries are finding it harder to cross the border into the U.S. Mexico’s economy has also improved to the point that many are opting to stay there.
“We really rely so much on transient workers,” Hail said, noting that even when olive growers find workers they may not show up to work because they’re paid by the number of buckets of olives they pick, and many workers will go to other farms if they pay even a quarter more per bucket.
“It’s really been hard on us.”
Hails isn’t alone in his concerns about his industry.
“I’ve seen acreage come out like crazy,” he said. “The olive industry is in trouble.”
Fellow olive growers in the South Valley have replaced their olive trees with other crops that they believe will bring them better financial returns.
“A lot of them go to nuts,” said Adin A. Hester, president and chief executive officer of the Olive Growers Council, which relocated in May from Visalia to Cloverdale in northern California.
Back in the 1980s, California had about 38,000 acres of table olive groves for eating — not including acreage for olives grown for the olive oil industry — and now that number is down to about 15,000 acres.
About 99 percent of U.S. olives are grown in California, most in Tulare County, which had 11,700 acres in 2014, the latest figure available. That’s down from 12,500 acres five years earlier and 16,705 acres in 2000.
Despite the decline, olives ranked 23rd among the county’s top crops that year, with sales totaling more than $19.2 million.
Hester said the decline in olive acreage largely is being driven by growing imports of cheaper olives from countries that include Spain, Turkey, Italy and Morocco that has kicked up substantially over the past 10 to 15 years.
He and many California growers say olives grown here are better in quality, but foreign producers can grow in greater volume — Spain, for example, has about 5.5 million acres of olive orchards, mostly for olive oil, but 250,000 to 300,000 of those acres are table olives — and they’re undercutting the prices that growers here charge, often by 20-30 percent.
Part of the reason is cheaper labor prices overseas, but European olive farmers additionally are being heavily subsidized, allowing them to sell their olives cheaper to U.S. buyers. European olive growers provide an overwhelming majority of olives used by U.S. restaurants, hotels and cafeterias, Hester said.
“Pizza [makers] are the main [olive] buyers, and about 90 percent are coming from Spain,” and despite efforts to get pizza parlors and manufacturers to buy California olives, the industry isn’t budging much, Hails said, noting the decision comes down to price.
“The consumer in America has accepted the lower quality that are Spanish black olives. They’re cheaper and gross, but the consumers are accepting it.”
“We just can’t come close to competing with it,” Vito DeLeonardis, another Tulare County olive grower, said of foreign competitors flooding their olives into U.S. markets.
With all this working against California olive growers, there was considerable concern in the industry that the state’s two main processors of table olives — Musco Family Olive Co. in Tracy and Bell-Carter Foods, Inc. in Lafayette — might stay firm on offering farmers less for their olives than they did last year.
In fact, price negotiations with the Olive Growers Council were so drawn out last year that olive growers were halfway through their harvest seasons when they found out what they would be paid, Hail said.
That “debacle” generated so much backlash from angry growers that it’s likely the processors made sure this year to set the prices early. They were announced on Wednesday, about six to eight weeks before most olive harvesting in the South Valley will begin.
“They’re slightly better than last year,” Hester said.
Sevillano olive prices remain the same as last year, while small Manzanilla olives will sell for $200 more per ton than last year and petite varieties will sell for $150 more a ton.
With current estimates that California farmers will produce 63 tons of table olives this year — about 4.2 tons per acre — Hester said the forecast is that farmers will generate average sales of about $1,100 an acre this year, slightly more than the $1,080 per ton they generated last year.
For his part, Hail said the he believes the packers decided to give a little more for the Manzanillas in order to try to alleviate concerns of olive growers who are on the fence about switching crops and to keep the California’s olive supply chain from shrinking more.
DeLeonardis said he believes the number of farmers getting out of the table olive business likely will stabilize this year, in part because some of the seemingly more profitable crops, including almonds, don’t seem as financially steady now as they have in recent years.
“But I think next year will tell the tale, because I know a lot of guys who are waiting to see how this year turns out,” and how pricing for olives and other crops fare next year, he said.