“Extra Virgin Olive Oil: Can California Compete?” Edible Sacramento, Spring 2010

Depending on whom you talk to, extra virgin olive oil may just be the next big agricultural breakthrough in California. "Spain used to be the top producer of almonds sold in the United States twenty or thirty years ago," said Dan Flynn, executive director of the UC Davis Olive Oil Center. "Now it's California because we introduced mechanized harvesting making the domestic almond economically viable. We can do the same for olives and oil. In ten years, California can be in the top ten of world producers of oil."

But others are not so optimistic. "People don't know what they are talking about, or they are bad at math," said Paul Vossen, farm advisor and researcher/teacher for the University of California Cooperative Extension. "In rough terms, Spain currently has about 6 million acres of olives and produces 200 to 260 million gallons per year. They are also planting more olives each year than we are. We will never catch up to Spain and certainly never surpass Spain."

Spain, Italy, and other Mediterranean countries came to dominate the domestic olive oil market early on in California's history. These countries had been growing olive trees and producing oil for more than four thousand years when olives trees were first brought to California, to missions in San Diego, around 1789. People used olive oil to cook, but as soon as they discovered that you could extract oil from seeds like soybean, corn, and sunflowers, which were cheaper and easier to grow, olive oil was abandoned.

Olive oil production in California all but ceased and imports from Spain and Italy came to dominate the market—as they continue to do so today. According to the Olive Oil Source, California produces less than 0.1 percent of the world's olive oil olives and just 1 percent of domestic consumption. This translates to only 23,000 acres of olives planted in California today.

However, the domestic crop is growing at roughly 4 to 6 percent annually. "California is planting eight to ten thousand acres of olives per year," said Patty Darragh, executive director of the California Olive Oil Council, which represents 90 percent of California olive oil producers. "Last year, olives went from the 58th to 43rd largest crop in California—that was just in one year."

But the olive oil industry has a few more obstacles to overcome then simply increasing acreage. The first is labeling standards—there are none in the United States and import standards for oil have been unchanged since the 1940s, according to Darragh. This may mean that imported extra virgin olive oil you see on the grocery stores shelves may not even be all olive oil. It may be refined and/ or mixed with other oils. In addition, there is no way to tell when the oil was bottled.

"Spain may have 30 to 35 percent of the world market," said Gregg Kelley of California Olive Ranch, the largest olive oil producer in the state, "but these orchards are old and 99 percent of them are hand harvested." Hand harvesting takes weeks and time degrades the olives resulting in lower quality oil. Accepted industry standards in California stipulate that olives should be milled and pressed within 24 to 48 hours to be at their peak of freshness.

"What's more is that less than 10 percent of these orchards are irrigated so you get a very inconsistent olive," said Kelley. As a result, as much as 60 percent of the oil is refined, but can still be labeled as extra virgin because the USDA and Food and Drug Administration (FDA) do not have labeling standards, according to Kelley. Refined oil has been treated chemically to neutralize strong tastes and the acid content resulting in lower quality oil. Dominant olive oil producing countries are also heavily subsidized by the European Union—up to $4 to $5 per gallon Kelley estimates—which makes for cheap imports.

California Olive Ranch, the California Olive Oil Council, and others have been working with the USDA for the past two and a half years to set standards, but even if they get it, it would still be voluntary. However, it is a necessary step before approaching the FDA for a mandatory standard. Unfortunately, this is going to be a steep, uphill battle because the United States has a small industry and the importers are lobbying hard against any changes to labeling standards.

In the interim, California has established its own labeling standards to communicate to consumers that olive oil produced in the state is, in fact, olive oil and it is of high quality. The certification is controlled by the California Olive Oil Council and in order to obtain "Seal Certification," olives and olive oil must meet three strict criteria: (1) olives mechanically extracted without chemicals or excessive heat; (2) less than 0.5 percent free oleic acid; and (3) positive taste elements and no taste defects, as determined during a blind tasting. For 2010, both Corto Olive Oil and California Olive Ranch are certified along with more than 120 other producers.. Certification is done annually when each new oil is introduced to the market.

The second challenge for California olive oil: new international competition. Australia has an olive oil industry already ten times the size of California's. Argentina and Chile are not far behind. California is planting eight to ten thousand acres per year, but the state is only so big—eventually we will run out of space. Even if all the usable land was planted with olive oil trees, the state still could not supply all the oil the country needs. Several other U.S. states—Georgia, Texas, and Arizona—have burgeoning olive oil industries, but they are still extremely small and unpredictable weather in these states, not to mention humidity, excess heat, and the occasionally snow storm, will probably keep them that way.

Yet another big obstacle: educating the consumer. Today, we are aware of the health benefits of olive oil, low in saturated fat and high in antioxidants, but we are still buying olive oil on price. When the imported oil is cheapest, that is what we buy. The average consumer is not aware that a lot of imported oils are refined, can taste rancid as a result, and that olive oil needs to be consumed young. "Fresher is better. Olive oil needs to be consumed in one to two years to get the benefits," said Darragh.

Vossen, who has been conducting olive oil tasting studies for the past thirteen years, said, "The consumer doesn't know any better, but people are surprised—imports taste bad. California's best asset is flavor. It's fresher, fruity, and light." While fighting the labeling battle in Washington and the price war in the grocery store, California's olive oil industry is working on a few tricks of its own to help it compete more strongly against imported oil. The state has always been at the forefront of agricultural technology and innovation and when it comes to olive oil, nothing has changed.

Besides statewide research being conducting by folks like Paul Vossen and advocacy groups like the UC Davis Olive Oil Center and the California Olive Oil Council, growers and producers are turning to a new type of olive oil that promises big rewards. Most, if not all, of the new orchards being planted in California are what is termed "super high density." Traditionally, and what is planted abroad, one acre of land had roughly 50 trees and a producer could get 50 gallons of olive oil per acre of orchard. This all had to be hand harvested, took weeks, and was done at great cost. With the super high density trees, farmers can get as many as 670 trees per acre, produce 200 gallons of oil per acre, and, at harvest time, just two men and one mechanical harvester can harvest one acre each hour.

Super high density trees also require a fraction of the water of other crops—a handy asset in water-strapped California. According to Kelley, olives need less than 1.5 foot acres of water per year, where walnuts need four to five foot acres and rice requires as much as eight.

These methods are proving to help California compete with cheap imports despite the labeling issues. Brady Whitlow, president of Corto Olives of Lodi, represents the second largest olive oil producer in the state. "I believe we can compete with Spain and Italy," Brady said. "If the United States could produce 10 percent of its own consumption, then we'd be meaningful."