The Olive Oil Production Edition

Eurof Uppington (EU) is a reformed finance guy turned olive oil merchant at Amfora.

Eurof here. There is much weirdness in olive oil this year. It’s a boom time for small farmers in the eastern Mediterranean, like Greece, Albania, and Turkey, who are seeing bumper harvests and sky-high prices. However, it’s a disaster in Spain, the biggest producer nation, where unseasonal heat early in the year killed the crop. The harvest is down by half. Spain makes 50% of the world’s olive oil. This is a big deal. No one remembers it being like this before.

Since I started my olive oil business in 2019, I’ve learned to respect olive farmers. So much can go wrong that sometimes it feels like nature itself has it in for them. Take the recent plagues of olive fly—a pesky creature that likes to lay its eggs in plump, green olives. The worms burrow out, ruin the fruit, and can spawn a new generation 2-3 times a season. 

Last year one of our farmers suffered a catastrophic loss two weeks before harvest. Literally, all his ripe, heavy fruit was blown off his trees by a freak storm. While olive trees are drought resistant and normally thrive in heat, frosts and unseasonable temperatures in spring can play havoc. Like this year, it was an unprecedented 90℉-104℉ mid-May in Andalucia, the main producing region of Spain. The delicate, just-pollinated flowers simply burned in the heat. No olives this year in the olive-growing center of the world. 

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Why is this interesting?

We might think this is just bad news for Andalucian olive farmers and shrug. But this harvest season is going to affect us all in ways we might not notice. Firstly, the price we pay for our olive oil is going to go up. This is on top of price rises for other cooking oils, like sunflower and canola, as Ukraine and Russia are key producers.

However, because olive oil brands lack market power, they won’t be able to pass on the full cost increase. What they’re more likely to do is lower the quality of shop-bought olive oil.

A dirty secret of the industry is that the amount of extra virgin olive oil produced in the world is less than the amount consumed. The big brands make “more” EVOO by diluting it. The magic number is 0.8%—that’s the maximum amount of free fatty acid (FFA) content an olive oil can have to be extra virgin. Brands will blend 250ml of an excellent EVOO of 0.2% FFA with 750ml of an oil of 1% FFA—a much cheaper “virgin” grade: hey presto! One liter of EVOO with a 0.79% FFA!

This practice is likely to increase, but it’s not technically illegal. Though real fraud is likely to increase, too, such as the full substitution of EVOO by virgin and refined grades. A few years ago, some popular EVOOs sold in Germany turned out to have been diluted with paraffin. The industry has improved recently as the supply of EVOO has increased, but its knowledge of how to adulterate olive oil (and get away with it) has remained.

Higher prices may mean restaurants will save money by reheating the same oil multiple times. This is particularly dangerous with heavily refined products like canola, sunflower, and soy-based vegetable oils, but even olive oils can turn mildly toxic if heated too often and for too long. Lower-quality EVOO with higher acidity and lower polyphenol content is particularly vulnerable to excessive reheating.

The effects of this year’s shortage aren’t likely to last, however. As in any commodity, a shortage in one period tends to lead to a glut in the next. Attracted by today’s high prices, olive farmers are likely to try and boost production in the coming years as much as they can. New hyper-efficient industrial olive production comes online every year. Yes, with climate change there may be more variability in harvests in the future, but in the short term, weather is random.

If you’re in the US, know that Californian EVOO is unaffected, and standards are much higher anyway. There are plenty of producers religiously committed to quality. There’s still going to be great product on shelves and online; we just might have to look harder. As an olive oil consumer, I don’t worry too much, and as an olive oil salesman, I urge you to consume as much olive oil as you possibly can. So hang in there, lovers of olive oil. We’ll get through this. (EU)

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Thanks for reading,

Noah (NRB) & Colin (CJN) & Eurof (EU)

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