Valley farmers see promise in premium olive oil

Published online on Friday, Sep. 25, 2009

For decades, California’s olive growers have been known as the kings of canned black olives. But the state is working on a new distinction: makers of premium olive oil.

Growers are increasingly planting new acres of olives to be made into oil. New growing methods and mechanical harvesting have accelerated interest, especially by farmers in the central San Joaquin Valley.

Statewide, about 21,000 acres of olives are devoted to oil production, and industry officials expect an additional 10,000 acres to be added each year through 2020.

“Farmers are diversifying and looking to hedge their bets, and one of the things they are looking at is olive oil,” said Patricia Darragh, executive director of the California Olive Oil Council in Berkeley.

Among those who see the potential is Carl Nelson, a veteran of the food business. Last year, Nelson opened Cullen Creek, an olive oil mill in Sanger. The company began processing and bottling oil from its own 400 acres, and it plans to add acreage from other growers.

“Down the road we hope to become one of the major players in the production of olive oil,” Nelson said. “And that is why the plant is here. We could become the epicenter.”

The Valley has long been well-suited to producing olives. The trees grow well in marginal soil and generally require less water than other fruit trees.

The region, lead by Tulare County, became the nation’s leading suppliers of canned black olives. But cheaper foreign imports and high labor costs have shrunk the canned-olive industry from about 40,000 acres in the 1980s to about 26,000 today.

And even though growers are receiving $1,250 a ton for their olives — among the highest prices in recent years — it comes as little consolation to the industry, which is estimated to produce only about half of the 100,000 tons it delivered last season.

“We have been in a slow decline,” said Adin Hester, president of the Visalia-based Olive Growers Council of California. “Just in the last 10 years we probably have lost 5,000 to 6,000 acres.”

During that same period, consumer interest in olive oil began to grow as more people become aware of its healthful properties.

But the big push in production came several years ago when farmers began increasing the density of newly planted trees, and when retrofitted grape harvesters made mechanical harvesting possible for the first time.

Tom Burchell, of Burchell Nursery in Oakdale, said new varieties of trees including several from Spain are specially designed for high-density plantings.

“They can grow in marginal soil and still do well,” Burchell said.

In the Valley, water shortages and falling commodity prices for other crops, have made olive oil production even more enticing.

“Right now you see guys doing a few trial plantings of 20 and 40 acres,” said Gino Favagrossa, president of the California Olive Oil Council. “And if it works for them, you will see more acres being planted.”

Favagrossa, who also is an orchard manager on Fresno State’s farm, is bullish about the future for olive oil in California, despite the fact that the state produces about 1% of 70 million gallons consumed in the U.S. The remainder is imported, most of it from Italy.

The state’s olive oil industry is working on increasing consumer awareness about California’s premium oils at the retail level and going after the large industrial users who rely on imports.

“We need to take back our own market,” Favagrossa said.