John Werner inspects the early blooms on the branches of the olive trees at his Seville grove. He is one of hundreds of California table olive growers whose contracts to supply olives to Bell-Carter Foods, LLC were unexpectedly not renewed this year. Submitted photo
Written by David Castellon
It’s been a rough several years for California table olive growers, who face a future full of change.
Competition from cheap Spanish olives has cut into demand for domestically-grown olives, with farmers here enduring years of low prices for their olives for canning and bottling.
Table olive growers in California — the nation’s primary olive-producing state — were finally seeing some light, as prices have risen slightly over the past four years and demand for domestic table olives rose after the federal government last summer imposed heavy tariffs on Spanish olives after determining dumping cheap olives here was an unfair trade practice.
Spain’s government and the European Union are challenging that action.
Didn’t last long
The good news for U.S. olive farmers didn’t last long, as last month Bell-Carter Foods, Inc. — one of only two large processors in the country of table or “ripe” olives — began notifying many of its growers their contracts with the Walnut Creek-based company wouldn’t be renewed.
That action didn’t affect growers of olives used for olive oil. They generally have done better recently than table olive growers.
By some estimates, about two thirds or more of Bell-Carter’s contracted table olive growers — about 350 California farming operations — had their contacts terminated, as Bell-Carter would be getting those olives instead from Spanish olive grower Dcoop, which last year, along with its Moroccan partner, Devico, bought a 20-percent stake in Bell-Carter.
The timing of terminating the grower contracts couldn’t have been worse for farmers here, said John Werner, who has a 10-acre table olive grove in the Tulare County town of Seville, north of Visalia.
That’s because olive trees have alternate-bearing years, producing a lot of fruit one year followed by low production the next year, and the cycle repeats.
Late 2018’s table olive harvest occurred in a low-producing year, and this year growers were counting on higher production, along with higher sales, to make up for last year, said Werner, noting that out of $120,000 in sales of his olives last year, after factoring in his expenses, he eked out only about a $6,500 profit.
“So this was a double whammy on us” who lost contracts with Bell-Carter, he said.
The company, which produces Lindsay-brand olives, didn’t provide anyone to comment on its actions, but in an email stated, “In an effort to uphold Bell-Carter Foods’ mission of providing the highest-quality table olives at the best value, while preserving the viability of our company in the face of significant economic and environmental challenges, we made the very difficult business decision to release a group of our partner farmers. As a family-run, fourth-generation business, we take these decisions very seriously, and we regret the impact that our farmers are feeling at this time in this rapidly changing industry.”
Using a loophole
Werner accused Dcoop of using a loophole in the U.S. tariff intended to offer U.S. olive processors access to Spanish olives if disease, severe weather or other matters prevent California table olive growers from providing enough olives to meet their needs.
Simply put, by not sending the olives here fully cured, and finishing the process here, the company avoids the average 35.7 percent duties tacked onto the costs of Spanish olives, he explained.
Bell-Carter’s action left Werner and other affected growers scrambling to find another processor for their olives.
“In ag, if you don’t have a home for your fruit, don’t grow it,” he said, adding that as soon as some growers learned they were losing contracts, some considered bankruptcy while others canceled scheduled tree pruning to cut expenses if they can’t find a processor to cure, bottle or can and distribute their table olives.
It didn’t take long for at least some of the affected growers to be thrown a lifesaver.
Last month, Tracy’s Musco Family Olive Co. — the only other large olive processor in the country and the top processor of ripe olives in the world — announced it would contract with many of the farmers who lost their contracts with Bell-Carter.
“Our gates are open to purchase this year’s crop to meet our increased supply needs from any grower who commits to our modern growing and harvesting goals,” which includes harvesting mechanically rather than by hand, Felix Musco, the company’s CEO, said in a press release.
There’s a catch
Olive experts note that nearly all of California’s 16,500 acres of table olives are picked by hand, rather than being harvested by mechanical shakers, comparable to how nuts are harvested.
“Additionally, while preference will be given to those growers who commit to planting mechanically-harvestable acreage, we will also offer a one-year contract to as many acres as we can to provide everyone with more time to consider this opportunity,” Musco’s statement continues.
So exactly how many farms will get new contracts this year with Musco currently is unclear, nor is it clear yet if those farmers will receive terms they consider favorable, said Michael Silveira, chairman of the Olive Growers Council of California, a nonprofit bargaining cooperative based in Clovis that negotiates prices for table olive producers, and advocates on issues affecting the industry.
Still, experts say Musco may be the only option available to growers who lost their contracts, and Silveira noted that the Tracy company has offered to guide farmers in mechanizing their olive harvesting.
While there certainly are advantages to mechanized harvesting, including reducing farm labor costs — which for Werner have grown from about 40 percent of his overall costs to 60 percent in less than a decade — the trunks of some olive trees, particularly older ones, tend to have grown too thick for shaking.
In his case, Werner said, he might have to pull out his trees and plant new ones in order to harvest mechanically.
Silveira said at least some of these thick trunks could be partially cut and shaped to allow mechanical harvesters to attach to them, as he plans to do at his olive farm in Northern California.
Of course, much of this comes down to which olive growers Musco chooses.
Where are the contracts?
That worries Werner, who late last month said he hadn’t found any olive growers that have contracted yet with Musco.
“And I’ve been reaching out hard to find people,” he said, though he conceded that Musco made the offer just days ago and may not have actually cut any deals yet.
Still, Werner added, he figured that enough time has passed “so if we were going to get picked up by Musco, we’d know.”
Officials at Musco Family Olive Company didn’t provide anybody to be interviewed for this story.
Even if he is awarded a contract, Werner figures he already has lost money because he canceled plans to trim his trees to allow more light to get under the leaf canopies and generate more flower buds on branches, each of which becomes fruit that should be harvested in September of October.
By not trimming his trees now, when the buds are forming, they’ll produce less fruit to harvest — assuming he has a reason to harvest the olives this year.
“If I don’t have Musco or Bell-Carter to take my olives to — I don’t know what I’m going to do,” Werner said.
He said he might have to figure out how to come up with the money to take out his olive trees and plant a crop he can sell.