The price of crude oil and gasoline products may be at a five-year low, but there is one kind of oil price that is literally skyrocketing in value. The extra virgin olive oil price!
Extra virgin olive oil prices have jumped by a over 33% after a devastating olive harvest in parts of Italy, France, Portugal and Spain. The crop is down 35 percent in Italy, with newspaper La Repubblica calling it “The black year of Italian olive oil.” The European olive harvest is getting hit by the perfect storm of anti-olive oil weather: High temperatures in the spring, a cool summer and a lot of rain. Those also happen to be perfect conditions for the devastating olive fly and olive moth. The olive fly burrows into an olive and lays its eggs inside, and the maggots tunnel out of the fruit, eating as they go. Along with them goes the precious olive fruit and, therefore, the extra virgin olive oil.
Silvio Bandinelli of the Tuscan Olive Growers Coop said: ‘The new oil will cost 2-3 euro more per liter compared to last year, or an average of 10 euro a litre. Some producers have decided not produce extra virgin because the flavor of the oil will likely be too acidic. Others have cut their losses by not harvesting at all, according to the Confederation of Agricultural producers in Italy (CIA). Greek production has remained untouched by this sad state of conditions and, as such, Italy and the European extra virgin olive oil producers have turned to Greece to solve their problems. The Greek extra virgin olive oil (EVOO) is in great shape and the Europeans are buying it as fast as it can be produced. Little Angel Greek Extra Virgin Olive Oil is coming in with a very low acidity and a rich, peppery flavor!
Renzo Modesti of CIA in Florence said that the hot spring followed by a wet summer had led to a poor start to the year. He explained: ‘Because of this we were already expecting a harvest of less than 20 per cent. But the arrival of the fruit fly has blown everything up in smoke. “This is the worst year in memory,” the head of an Italian olive growers’ group told the Associated Press news service. A leading extra virgin olive oil supplier told The Grocer trade magazine that this is “the most difficult year I have ever seen.”
“For extra virgin olive oil producers, 2014 is the year they wish had never happened,” says Rolando Beramendi, who imports fine Italian oils and other food products. “The weather was so strange … terrible hailstorms, unusual wet weather,” he says. As a result, one of his top producers — Tenuta di Capezzana in Tuscany — isn’t going to make any oil at all.
“They ran the press one day and then just said the quality was so bad that they just turned it off,” Beramendi says.gin
Making matters even worse in Italy, says olive oil expert Thomas Mueller, author of “Extra-Virginity,” are government actions. “Aside from the weather and fly, this low harvest is also an expression of the rapidly deteriorating olive oil industry in Italy, where more and more oil is imported, and less and less is made from Italian trees,” he wrote in an email.
“[The] lack of long-term strategic planning on a national and regional level, terrible (often fraudulent) use of EU subsidies not to modernize groves and mills, as the subsidies were designed to do, but to grease palms,” are among the reasons he cites.
Tom Mueller warns that this shortage may well lead to even more of the kinds of olive oil fraud he describes in his book — cheaper oils from other countries being imported and sold as fine Italian, lesser grades being labeled extra-virgin, even the addition of vegetable oils. Indeed, Olive Oil Times has already reported a 45% increase in imports of oils into Italy.
To be sure you are getting what you pay for given these conditions, pay careful attention to the label. A twist in Italian oil labeling laws allows producers to label their products by where they are bottled, not necessarily where they are grown. Therefore, a company in Tuscany that imports Algerian oil can sell it as Tuscan extra virgin olive oil.
An exception, Beramendi says, is bottles labeled “produced and bottled by,” which have to have been grown by the estate that’s selling them. Even better are bottles that are marked with the harvest date.
Tom Mueller, whose book uncovers all manner of bad business in olive oil, is more pessimistic.
“Given the current lack of transparency in labeling, I’m afraid there are no good answers for how consumers can shop smart,” he wrote.
Olive oil price is not the only way to judge an oil but it is an important indicator. Olive oil market prices are a function of quality and availability.
“Certainly, anything claiming to be Italian oil that costs below, say, $12 per liter should be avoided, as it simply can’t be Italian from this year’s harvest, at least, and cost that little (prices for 100% Italian extra virgin olive oil have skyrocketed as this bad harvest has emerged). Anything cheaper has to be – in whole or in part – last year’s oil, or oil from another country like Greece or Algeria, or some other vegetable oil. Be very suspect of anything that claims to come from Tuscany, Umbria or another of the harder-hit regions.”
He advises trying Greek oils, as they were relatively unaffected. At Little Angel, we couldn’t agree more!
One Italian olive grower is estimating that the price of oil there will rise to about 10 euro per liter, or about $47 per gallon. The price is expected to rise by £2 a bottle after production fell by up to 80 per cent in some areas of Italy, a farmers’ cooperative said. And, the olive crop in the U.S. isn’t faring much better. The harvest in some parts of California is down because of the state’s prolonged drought and a winter cold snap, according to Olive Oil Times. Growers are also dealing with environmental disputes over how to dispose of the curing and brining solutions involved in olive processing.
‘There are so many small and medium producers who this year will not harvest because the fly has eaten all their olives leaving only the skin and the stone.’ The olive fruit fly or Bactrocera oleae, lays its egg in a hollow in the olive and when hatched the larvae tunnels its way out gnawing at the flesh destroying the fruit.Only those larger farms with technical prowess to treat their trees with pesticides managed to reduce their losses by around a third. Filippo Chiocchini, who owns an organic farm Poggio al Sole near Florence, said he had suffered losses of 30,000 euros. He wrote on Facebook:’The organic farms have been hit worse than the others by this fatal year. It’s a shame to give up the harvest but this is real farming which depends on natural methods.’
Paolo Calosi owner of a farm in in Sesto Fiorentino, Tuscany, where 1000 trees were hit by the fly, said: ‘Unfortunately this year we will not produce extra virgin oil because the fly has damaged all the trees. ‘This will produce a very acidic oil which cannot be sold as extra virgin. ‘It will in any case have a nasty aftertaste with a marked woody flavour.’ Roberto Nocentini of Coldiretti Tuscany said: ‘It’s difficult to quantify the loss in production because the situation changes not only from area to area but from grove to grove. Italy may have to import olive oil this year.’
The southern European countries produce more than 70 percent of the world’s olive oil, and last year received nearly $2.2 billion from exporting the commodity, according to The AP. The U.S. imported more than $800 million of that total. The soaring olive oil price is hurting Europe’s already struggling economy.
Adapted from CBS MoneyWatch Dec. 02, 2014, LATimes Nov. 24, 2014, and Daily Mail News Oct. 30, 2014