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Italian olive farmers face disastrous harvest

Olive trees at the Pantaleo Piccinnino in Caprarica near Lecce in the Puglia region in Italy. Estimates put this year’s Italian olive yield down 40 per cent this year.

TIZIANA FABI/AFP/Getty Images

For about 10 days every November, Arrigo Peri, a Rome orthodontist, closes his dental practice, drives to Puglia, in the heel of Italy, and indulges his passion – olives.

"Making olive oil is like making wine," he says. "It's like being an artist."

But this year, artistry gave way to misery. The harvest, which just wound up, has been a disaster pretty much everywhere in the country, with early estimates putting the Italian yield down 40 per cent.

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Mr. Peri, 50, says the harvest on his own farm – 1,000 trees on 10 hectares – fell 75 per cent or more this year. He's lucky: Farmers in Abruzzo, the olive-mad region due east of Rome, between the Apennine Mountains and the Adriatic Sea, say their harvest was pretty much wiped out.

Coldiretti, the Italian farmers' group, last month said the harvest in Italy – the world's second largest producer of olive oil, after Spain – was on course to produce only 290,000 tonnes of oil this year compared with 470,000 tonnes in 2015 and an historical average of 400,000 tonnes. That means retail prices will go up, perhaps as much as 30 per cent, even though quality may go down as inferior domestic and imported oils are blended with high-quality oils.

Mr. Peri plans to raise the price of his organic, extra-virgin oil, which carries the label "Eredi Perrone" (Heirs of Perrone, after his mother's side of the family) and which he sells to restaurants and dental clients, by about 20 per cent, to €12 ($17) a litre. This year, he expects his meagre harvest will produce no more than 2,500 litres, down from 5,000 to 8,000 litres in a good year.

The distressing news for olive oil producers in Italy and elsewhere in the Mediterranean is that dud harvests are no longer rare. "Supply has become more unstable in recent years," Vito Martielli, grains and oilseeds analyst at Rabobank, in the Netherlands, wrote in an October report.

"Weather conditions have impacted the most important producing countries three times in the last five years, causing supply failures."

In 2012, frost combined with severe drought wrecked the harvest in Spain, whose enormous production sets the global price for extra virgin olive oil. In 2014, extremely dry weather hit the Spanish and Italian harvests particularly hard; that year, Italy recorded its lowest production in 25 years.

While the 2016's oil production will not be a writeoff, unlike the one two years ago, Mr. Martielli expects a 7-per-cent production drop in Spain, a 29-per-cent drop in Greece, the third-largest producer, and a similar fall in Tunisia, whose output is close to Greece's.

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In late November, the Spanish price for extra virgin oil reached €3,200 a tonne, up from €3,150 in September. The price last year was €3,000 or less.

In Italy, the spot price surged to €3,800 a tonne in recent days, up from €3,600 earlier in the autumn and €3,400 or less last spring, according to Bloomberg data. But in Puglia, where some of the best olive oil is produced – the area is famous for is low-acidity oil – the price has shot up to €5,000 a tonne.

Falling production in Spain, Italy, Greece and Tunisia will cause shortages around the world, which is developing a taste for olive oil as the health benefits of the Mediterranean diet become well known. Global demand rises 3 per cent to 4 per cent a year, Mr. Martielli says, and there is lots of room for growth. In Canada and the United States, average annual consumption of olive oil per person is only 1.1 kilograms; it Italy, it's 13 kg and even higher in Greece.

Mr. Martielli blames "weather conditions and pests" for the overall decline in the Mediterranean this year. Mr. Peri agrees that the changing climate is to blame.

He, his mother, Silvana Perrone, and his father, Gianni Peri, who died in 2010, spent years reviving the family olive-tree farm, which goes back to his mother's grandfather's era. Until 50 or 60 years ago, grape vines were grown between the oil trees and the combined production of wine and oil olive put the Perrone family in high standing in the local town, Acquaviva delle Fonti, which is near the port city of Bari, the capital of Puglia.

His grandfather pretty much ignored the farm and it went to waste. The fix-it job began in the late 1980s, after Mr. Peri's father retired. The work was tough, especially since the organic certification they coveted meant no herbicides or pesticides could be used. "We had to clean the trees and get rid of all the diseases," he says. "I washed every single tree myself, with a soap sprayer. It took me five days. It worked and the yields got better."

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All went fairly well until the disastrous 2014 harvest. The yields recovered, and then some, in 2015. Then the olive-fly infestation hit hard. The fly lays its eggs in the olive, making it rot and fall to the ground. In the southern tip of Puglia, many thousands of olive trees were also severely damaged or killed by a bacterial disease called Xylella Fastidiosa.

"This is happening because the climate was not like it was before," Mr. Peri says. "We had no snow this year and no really hot days. Extreme heat and extreme cold kills the bugs. We also got a lot of rain, which is ideal for the fruit flies."

In spite of the two lousy harvests, Mr. Peri and his mother have no intention of giving up on the farm. They would like to make a profit from their labours, but that's not the point. "Making olive oil goes back to ancient times," he says. "It's cultural. It's something you're born with and it's in your blood."

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About the Author
European Columnist

Eric Reguly is the European columnist for The Globe and Mail and is based in Rome. Since 2007, when he moved to Europe, he has primarily covered economic and financial stories, ranging from the euro zone crisis and the bank bailouts to the rise and fall of Russia's oligarchs and the merger of Fiat and Chrysler. More

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