By Hayley Boriss, Agricultural Issues Center, University of California.
Updated December 2013 by Diane Huntrods, AgMRC, Iowa State University.
According to the California olive industry, olives originated in the Mediterranean countries of southern Europe. Olives were brought to Mexico, and subsequently to California, in the 1700s. However, commercial production did not begin until the 1800s. The industry developed at that time to satisfy the rising demand for olive oil, and production began to flourish. Originally, California olive production was intended for oil. By the early 1900s, however, advances in canning technology promoted higher returns for canned olives, and producers changed to producing olives for canning.
Today, California remains the only U.S. state to commercially produce olives. About 50 percent of production is destined for canning as California-style black olives; another 46 percent is pressed into olive oil. Much of the olive oil consumed in the United States is still imported, but olive oil production has increased from 5,000 tons in 1999 to 74,000 tons in 2012. The USDA classifies the olive as a fruit, not as a vegetable or an oilseed.
Because of its historic predominance for canning, California production comes mainly from table olive varieties. The two main varieties of table olive trees in California are Manzanillo and Sevillano. Manzanillo olives are ideal for the black ripe market but can also be used for making oil. Given its low oil content, the Sevillano variety is used primarily in the table olive market. In 2012, 71,200 tons of Manzanillo olives were produced and 22,900 tons of Sevillano olives were grown, along with 65,900 tons of other varieties.
Value-Added Marketing for Olive Oil
Historically, the olive oil industry in California has existed mainly as a option for olive producers in years when production was especially large or when harvested olives were of poor quality. In recent years, U.S. demand for olive oil has increased dramatically, but much of the increase has been met by European processors. Despite this European dominance, the California industry has grown in recent years. Much of the growth has occurred in niche products, allowing U.S. producers to receive a premium sufficient to cover higher costs of production (Barrio and Carman). By 2007 over 400 olive oil companies existed in California.
Olive oil competes with other lower-priced vegetable oils such as canola, corn and safflower oils. Some U.S. producers believe that enforcement of grading standards as published by the International Olive Oil Council (IOOC) could help high-quality California producers compete with European imports. The California Olive Oil Council (COOC) has established an Extra Virgin certification program that certifies oil that has been pressed from 100 percent California-grown olives and meets IOOC standards for chemical and sensory analyses.
Per person consumption of canned olives has been variable since 1970, ranging between 0.78 and 1.80 pounds. In 2009 per person consumption was 0.8 pounds of canned olives (ERS). Canned olives produced in the United States are often consumed on pizzas while most imported canned olives have been preserved and serve other uses. The continued popularity of Mediterranean cuisine also contributes to sustained consumption.
In contrast, demand for olive oil has increased significantly in recent years, largely in response to the increased publicity of associated health benefits for nonsaturated vegetable oils. Some of the promoted beneficial attributes of olive oil include being a source of antioxidants, vitamin E and monounsaturated fat, which helps to prevent cardiovascular disease.
Olive production has been highly variable over the years, largely due to the alternate-bearing nature of olive trees. The 2012 crop totaled 160,000 tons and was valued at more than $130.0 million. That year, California accounted for 44,000 acres of olives in the United States. Total acreage has remained between 30,000 and 40,000 acres since 1980.
In the last 10 years, California olive oil growers have used Italian, Spanish and Greek varieties and high-density plantings to take advantage of mechanical harvesters for more efficient production.
U.S. grower prices for processed olives have varied over the years but have generally declined. Prices peaked in 1981 at $1,200 per ton, and the average price in 2012 for all varieties of olives was a record $813 per ton, up from $733 in 2011. The average price per ton for canned olives was $1,110, up from the previous year, and the average price for olives crushed for oil was $550 per ton, down from 2011.
During 2012, the United States exported 6,989 metric tons (MT) of olive oil, a 66 percent increase from 2011, valued at more than $17.2 million, up 41 percent from 2011. The top buyers of U.S. olive oil were Canada, followed by Mexico and Hong Kong. The United States also exported 4,648 MT of prepared olives valued at nearly $9.4 million in 2012. Prepared olives were shipped mostly to Canada and Japan. Finally, the United States shipped 340 MT of fresh olives valued at $843,000 mainly to Canada. (FAS 2012)
The United States is a net importer of olive products. During 2012, the United States purchased more than 323,000 MT of olive oil , up 10 percent from 2011, valued at nearly $969.6 million, which was relatively unchanged from 2011. U.S. olive oil imports came mainly from Italy, followed by Spain and Tunisia. The United States also purchased prepared olives valued at nearly $150.5 million, down 10 percent from 2011. Spain, followed by Greece and Morocco, accounted for about 75 percent of the prepared olive imports. Fresh olives valued at nearly $7.1 million were imported, primarily from Mexico. (FAS 2012)
Agricultural Prices, National Ag Statistics Service (NASS), USDA.
Barrio, O.S., and H. Carman, Olive Oil: a “Rediscovered” California Crop, University of California Giannini Foundation, Agricultural and Resource Economics Update, 2005.
California Olive Oil Council
Food Availability (per capita) Data System, Economic Research Service (ERS), USDA.
Olives, Specified Fruits and Nuts by Acres: 2007 and 2002, 2007 Census of Agriculture, NASS, USDA, 2009.
Created March 2006 and updated December 2013.