Spain, the world’s largest producer of olive oil, faces the prospect of running out of extra virgin olive oil in the coming months. According to industry figures seen by Urban Food Chains, forecasts for worldwide consumption of olive oil are expected to drop from 3.1 million tonnes to 2.9 million tonnes in the current campaign. There is a potential shortfall of 745,000 tonnes worldwide.
The Spanish industry invested heavily in extensive tree plantings around the turn of the century, with enough trees and crushing capacity to produce one and a half million tonnes of olive oil in a season. But the 2022-3 crop was a poor crop and down by over 50 percent against the previous campaign. This year a lot of flowers set on the trees, but like last year, the trees are stressed and are shedding the fruit.
With total olive oil stocks across the Spanish industry hovering at just over 607,000 tonnes, the sector faces empty tanks later this year. Domestic consumer demand is strong and April sales in Spain topped 63,000 tonnes. With at least six months to go before the next harvest comes onstream, Spanish consumers will be competing with exporters for physical stocks of olive oil.
Demand is strong and prices are high but expected to go up even further. Assuming that Spanish consumers ease up on their purchases of olive oil, which is not a given, a 5% drop in month on month sales volumes would represent a requirement of just over 277,000 tonnes between now and the next crop. The Spanish industry delivers shiploads of olive oil around the world and all over Europe by tanker truck. Exports as of around 50,000 tonnes a month would empty the country’s remaining stocks by November.
data source: International Olive Oil Coouncil
Like any other crop-driven commodity, there is a numbers game in play and prices will rise steeply to head off strong demand. Retail margins will come under pressure as physical product becomes harder to obtain. The EU has trade deals with north African producers, who can ship quota tonnages that member states can draw down with zero duty. Should any of this third country olive oil be packed for the UK market, even in a blended product, Rules Of Origin (ROO) would apply on arrival at the UK frontier, where duty would be charged on the non-EU content.
But the underlying concern has to be the drying out of water tables across a huge swathe of southern Europe and the Mediterranean basin. Olive trees have deep roots, but not deep enough, it might seem. In Spain, the planting of thousands of trees has propped up crop yields most years, but not all. This year’s forecast being a case in point.
Gaps in supply chains are set to become a regular feature of the UK economy. In April, supermarket chain Morrisons started limiting customers to two sweet peppers per shopping trip because of procurement difficulties for salad ingredients. Cold weather in southern Europe has led to shortages across the continent, while high energy costs have deterred UK growers from planting early greenhouse salad crops. Supplies of early season tomatoes and cucumbers have also been affected.
Traditional sources for these crops are Spain, Morocco and neighbouring north African countries. The combination of higher fuel costs for imported salad crops and the cold snap has wreaked havoc.
In March, the UK recorded headline Consumer Price Index (CPI) inflation of 10% https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/march2023 But take a closer look at the Office of National Statistics data and consumers will learn that food inflation is running at around 19% (CPIH 12-month rate for March 2023). Climate disruption is just one of many factors that will have a generalised effect on future developments in many sectors. Animal products of all kinds have already been heavily impacted in recent months and the sector can be expected to see further upward pressure on prices if producers are going to stay in business.
Across this website, readers will have seen posts such as butter by numbers or cheese by numbers. The purpose is not spelt out in these posts, so here is the thinking behind the “by numbers” coverage.
First, most of the figures cited go back to the end of the 20th century and are volume measurements. The choice of tonnages over the more usual measurement of currency is intended to give an idea of the additional capacity that imports generate for their economies.
In its simplest terms, importing food occupies production capacity the exporting country cannot use for the local economy. For countries like New Zealand, rural populations are so sparse and urban populations are so far apart that this is not a problem.
Market gardeners close to urban centres in countries such as Kenya, on the other hand, can find themselves left with crops of green beans for which they have no local outlet. Having promised to grow premium vegetables for affluent industrial economies, there is no wriggle room for producers if retail customers change their minds.
By looking at tonnages, it becomes possible to calculate the agricultural resources that are occupied by export production.
The use of data going back to the late 1990s is a reflection of the fact that multiple retailers invested heavily in electronic point of sale and data management for food sales during the early 1990s. The later years of the 1990s mark the moment that the results started to become visible.
“Today, we have come to sell our produce for a fair price,” declares Gérard Ricardi. The secretary general of radical farmers’ union MODEF (MOuvement pour la Défence des Exploitants Familiaux) has plenty of takers for tomatoes at EUR 1.50/kilo outside the mairie [town hall] of Ivry sur Seine on a blazing hot morning in late August.
The supermarkets pay around 45 centimes/kilo for tomatoes that cost 70 centimes/kilo to grow, Ricardi explains. There is 20 centimes/kilo to find for transport and packaging, before the same tomatoes are sold in Paris for EUR 2.50/kilo.
“Prices like that are a racket,” he grumbles. “Here, the growers are earning 70 centimes/kilo, there’s 20 centimes/kilo freight and packing, with 60 centimes for the distributor.” Total EUR 1.50/kg.
“We want to make it clear that there is scope for everyone to earn a living. The state should face up to its responsibilities and support consumers and growers alike.”
Sixty years ago, the French state imposed a maximum retail margin on agricultural products. “The state recognised then that retailers were overcharging and took action to stop the abuse.”
Known as the coefficient multiplicateur, retailers were able to multiply their cost prices by a factor of between 1.5 and 1.7, but no more. “The grocers were just lining their pockets, but it was not acceptable then in the way it is now.”
In fact, this policy had two important benefits: “Consumer prices were lower, because prices were linked to growers’ production costs and growers received a fair return for their work,” Ricardi observes.
“There was even a shared interest for retailers to pay more to the producer, so that the retail price could be higher. It was a virtuous circle that worked for consumers and producers, too.”
The coefficient multiplicateur lasted until 1986, when the retail lobby finally managed to kill it off. In recent years, a watered-down form of the coefficient multiplicateur returned to the Code de l’Agriculture as an emergency measure, but it has never been implemented because there is simply no political will to question the integrity of multiple retailers.
MODEF is celebrating its 50th birthday this year. MODEF was founded to stand up for small family farmers at a time when the mainstream farming unions would have cheerfully excluded six million peasants from the political process. Today, the largest union FNSEA uses the word paysan (peasant) to pluck the heartstrings of a nation that has very varied notions of a time before industrial farming, which should somehow have been better than today but probably was not.
Against all the odds, MODEF is still fighting the same assumptions in harder times. There are fewer peasants – just under half a million – but the growing power of a handful of multiple retailers has become a stranglehold on the nation’s food supply.
“We are disappearing and the head of state takes us for a bunch of idiots,” growls Girardi. Around him are crates of nectarines, plums and melons, fruit on which supermarkets earn similar margins to the tomato bonanza he described above.
“They’re buying my potatoes for 5 centimes a kilo,” another producer chips in. “They cost me 20 centimes a kilo to grow.”
As he speaks, just 100 metres away a French-owned discount grocery chain is selling 2.5 kilos of potatoes in a net for EUR 2.99. At 13 locations around Paris, there are queues to buy MODEF-produced potatoes priced at EUR 4 for a 5 kilo net.
The previous night, the growers had loaded an articulated lorry with tonnes of potatoes, melons, tomatoes, nectarines, plums and salad grown in Lot-et-Garonne before driving to the French capital to sell directly to Parisian consumers. Not that the public needed a lot of convincing.
The prices speak for themselves: two lettuces for EUR 1, compared to EUR 0.99 for a single lettuce in the same French discounter, while MODEF nectarines were priced at EUR 2/kilo against the retailer’s EUR 2.29/kilo.
At a local shopping centre a bit further away, Spanish grade II tomatoes are being sold in a larger supermarket for EUR 1.09/kilo. MODEF growers are not alone in resenting the kind of market distortion that arises from a European directive that has allowed countries such as Germany and Spain to exploit cheap foreign labour and undercut growers elsewhere in the European Union.
“The Bolkenstein directive must be revoked as a matter of urgency,” says MEP Patrick Le Hyaric, who was present at Ivry sur Seine. “This directive has allowed Spanish growers to take on Moroccan farm labourers and pay them less than the minimum European salaries,” he declared.
As a member of the European parliamentary commission for agriculture, he had just returned from Lot-et-Garonne where he had met a delegation of fresh produce growers, some of whom were on the same improvised market square at Ivry sur Seine. “I knew the situation was difficult, but now I have a better idea of the scale of the crisis that is gripping the small and medium-sized holdings in this sector.”
Over the past 20 years, Lot-et-Garonne has already seen a lot of growers go out of business. “Today, those that remain do not know if they will still be standing in six months’ time,” warns Le Hyaric.
He is organising an urgent meeting with the French minister for food, farming and fisheries, Bruno Le Maire, to demand emergency aid packages for growers and the urgent implementation of the coefficient multiplicateur. This is available as a crisis measure but has been studiously avoided by the French government.
“In its present form, the Common Agricultural Policy has a number of negative effects. But in its original form, it was a sound piece of policy. The préférence communautaire was not a bad idea, it just did not fit in with ultra-liberal ideas or the so-called ‘free market’, that is all.
“So Europe gave in to US demands. And now, for instance, France is completely dependent on imported soya to feed its livestock, most of it from Brazil.”
As long as cheap food imports can be procured around the world, consumers in the industrial world can get by without small, local food producers. But abandoning an entire sector of the economy has a cost that should be neither underestimated nor trivialised.
It is neither a secret nor is it difficult to understand. Talk to anyone who sells food direct: just don’t leave it too long.
The Environment, Farming and Rural Affairs select committee (EFRA) has recently published its findings on staff shortages in the UK food industry. It frames the problem as half a million unfilled jobs in a sector with just over four million workers.
The pig industry and field crops are judged to have been hardest hit: government measures to counter a crisis situation were branded as “too little, too late” by those in the sectors concerned and there is little reason to suppose that the government has learnt a great deal from a crisis that is taking agricultural businesses off the map.
The covid pandemic is trotted out as a major contributing cause of the crisis, but as early as 2017, EFRA was hearing evidence from UK veterinary experts that Brexit would cause consequential and structural damage to UK agriculture. This damage is being done, but Brexit is not being blamed for it.
For all the positive noises coming out of EFRA over the government’s welcome measures to make it easier for UK businesses to recruit specialist food industry workers, the stage is set for a chorus to emerge from the wings and narrate the closing scenes of this very public Greek tragedy as it unfolds.
The UK food industry generates GBP 127 billion a year – more than 6% of the Gross Value Added to the national economy. It should be added at this stage that this figure for the sector includes multiple food retailers and their staff.
The National Farmers’ Union reported that a 33% gap in the work force meant that 24% of the UK daffodil harvest went unpicked, while one in ten growers in the Lea Valley Growers’ Association did not sow a third cucumber crop in July 2021, for the lack of people to pick the crop.
Fresh produce producer Riviera Produce Ltd left produce valued at half a million pounds to rot in the fields, while Boxford Suffolk Farms ltd reported that it lost 44 tonnes of fruit due to labour shortages.
The British Meat Processors’ Association warned that its members faced a shortage of more than 15% in staff numbers, while the National Pig Association reported a “…desperate lack of skilled butchers…”, while pig farms were facing serious gaps in their work force. The British Poultry Council went into the summer of 2021 facing a gap of 6,000 staff among its members, in a sector that employs the equivalent of 22,000 in full timers.
There is no reason to suppose that any of these important industry figures is making up or overstating the problems they face. But they all need rather more than a figurative pat on the back and meaningless platitudes.
Money is a totally meaningless measure of value for many things. Take food production for instance.
From an accountant’s point of view, there is no monetary distinction to be made between a farm growing a thousand pound’s worth of wheat during a crop year and a market gardener’s business growing a thousand pound’s worth of asparagus and strawberries over the same period of time. It is only when you come to live on these harvests that the difference becomes apparent.
Luxury crops such as asparagus and strawberries, or Yorkshire rhubarb, became potentially more profitable when the Victorian railway network suddenly cut the cost of market access, moving delicate products quickly and efficiently. Market gardeners were by definition close to urban centres, but the railways extended the range over which they could sell.
The reason asparagus-and-strawberries is such a common combination is that both crops need a lot of skilled labour to harvest. Having assembled a gang of labourers to pick asparagus, it makes sense to have another crop to follow through and move the workforce from one to the next as the season progressed.
In the case of Yorkshire rhubarb, production is concentrated into an area surrounded by railway lines. Like the asparagus-and-strawberries growers, market access was the key to their profitability.
However, especially given the short seasons for these luxury crops, no-one is going to live on a diet of asparagus and strawberries. We use a different set of values to establish what a sustainable food system might look like and what it would need to produce.
The BBC is running an upbeat story about ensets, a relative of the banana grown in Ethiopia. The stems and roots of the plant are used to make a bread or a coarse porridge. The conical fruits are discarded since they are inedible.
The interest in this obscure crop is that it might grow successfully across a far wider range than it currently occupies. Whether it takes the continent of Africa by storm remains to be seen, but the idea of growing a new crop to feed local populations makes a welcome change.
Swiss researchers have found a way of using fruit and vegetable peelings to make a coating that extends the shelf life of fresh produce. Staff at the Empa research body have been working with Lidl Switzerland since 2019 to develop what promises to be a game changer.
Bananas have been chosen to test Empa’s cellulose coating.
Testing the coating on bananas, a gain of up to a week was recorded in the product life. There is the added benefit that with a reduction in the use plastic materials, the risk of condensation or rot in transit is also lower. “The big goal is that such bio-coatings will be able to replace a lot of petroleum-based packaging in the future,” explains Gustav Nyström, head of the Empa lab.
Lidl Switzerland has 150 stores that will take part in testing the new coating as it continues its development over the next two years.
Today (Friday November 26) is World Olive Tree Day, as growers in the northern hemisphere prepare to pick the next crop of olives. More than two thirds of the world’s olive trees grow in the Mediterranean basin and survive thanks to their deep roots. Younger trees planted in more recent groves will often be irrigated until their roots have reached cooler, damp rock formations.
Olive oil ranges in colour from green to gold.
Olives are a winter crop: starting in November unripe green olives are gathered and pressed for distinctively strong, green oil. As the winter progresses, the olives darken and ripen, the oil changing to gold as the flavour softens with the fruit. The harvest continues into February and March, depending on varieties and locations.
Traditional olive-picking techniques needed the olives to be hard enough not to break up as pickers beat the trees with heavy sticks. Today, large groves are harvested with a mechanical arm attached to the trunk of the tree. The tree is then shaken vigorously, emptying the fruit onto large sheets spread out to catch the crop. The process is stressful for the tree, but is quicker than the stick-wielding villagers. The remaining winter months are a time of recovery.
Once picked, olives are fragile. Away from the tree, the olives start to accumulate free oleic acid as they oxidise during the different stages of processing. Only when the oil is extracted and stored under nitrogen can the oxidation be halted. The largest pressing plants, typically in Spain, where batches are consolidated and have more time to oxidise, face the prospect of minimising the effects as best they can.
Olives picked for the table have an additional constraint: unlike olives bound for pressing, every table olive needs to be visually perfect. To remove the stones from olives, the flesh needs to be firm and the olive must be unripe. To produce black pitted olives, green olives are treated to make the flesh black and then the stones can be removed mechanically. By the time an olive has fully ripened and turned black naturally, it is no longer possible to remove the stones mechanically, since the soft flesh just falls apart. The taste, however, is exquisite.
Olive oil is a highly-prized commodity, for a very wide range of reasons. As a key ingredient of many elements in the Mediterranean diet, it is a pivotal component of Mediterranean cuisine. Across the region, household use of olive oil would be counted in dozens of litres a year.
Spain is the world’s biggest producer and user of olive oil: collectively, domestic consumers buy tens of thousands of tonnes every month. The country usually produces over a million tonnes of olive oil a year, much of it shipped to packers all around the world.
Greek olives are harvested in small quantities and pressed within hours of coming off the tree. Domestic Italian production is an even lower tonnage. Italian blenders are very skilled at procuring the right mix of flavours and colours of oil from all over the world to blend in bulk. The bottles were often marked “Prodotto in Italia” (“produced in Italy”) but this delightfully vague ambiguity was outlawed by the European Commission.
Pressing yields anything up to 20% by weight in oil. This ranges from the cheap and cheerful institutional canteen cooking oil, olive pomace oil, through to single estate, single variety specialist extra virgin olive oils containing less than 0.08% in free oleic acid. Like wine, the estate bottled oils are like an exclusive club: they are as distinctive as the groves they came from.
The next grade, virgin olive oil, will have less than 2% free oleic acid, which will be reflected in the taste. The different grades of virgin olive oil are too delicate to be suitable for deep frying, which is the main use for olive pomace oil. Pomace is the paste that is left over from the mechanical pressing process used to extract virgin oil grades. Due to its lower moisture content, olive pomace oil is better suited to high temperature applications.
