AN ECONOMIC ASSESSMENT OF OLIVES Executive Summary The olive is a drupe, botanically similar to the almond, apricot, cherry, nectarine, peach, and plum. The flesh of the olive fruit may be pickled for table use or it may be pressed or processed to recover its oil. The oil is prized for cooking and table use. Fresh olives are extremely bitter and are not considered palatable. California's olive industry produces primarily black-ripe pickled olives, used as appetizers and condiments or in salads and sandwiches. Olives are also used to add color and seasoning to prepared dishes, such as pizza. Oil production is a salvage operation in California, for cull olives and those that are too small for canning. California accounts for all commercial U.S. olive production, 30,600 bearing acres in 1994. The farm value of the crop was $39 million in 1994, down from $57 million in 1993 and $91 million in 1992. The Census reported 1,317 farms with olives in 1992. Olive yields and production are highly variable from year to year. Since 1975, output has ranged from a low of 43,000 tons in 1977 to a high of 165,000 in 1992. Alternate bearing accounts for part of this variability. In the "on" year, trees produce abundant flowers and set more fruit than can grow to marketable sizes. In addition, the large crop of fruit draws down carbohydrate reserves, causing sub-normal shoot growth. A large crop also delays fruit maturity and increases the chance of losses due to early fall frosts. Since olive trees develop fruit buds on the previous year's shoots, repressed shoot growth diminishes the crop potential for the next year, the "off" year. The alternate-bearing pattern in olives, however, occurs less dependably than among certain other tree crops, such as pecans and pistachios. Sometimes, olive trees produce large (small) crops for several years before yielding a small (large) crop. Olives are a minor item in the American diet. Per capita use of canned (pickled) olives averages between 1 and 1.5 pounds annually. Consumption of pickled cucumbers, in contrast, averages about 4.5 to 6 pounds per person per year. Sixty-five percent of the olives consumed domestically in 1993/94 were produced in California. The remainder was imported, largely from Spain, Greece, Mexico, and Portugal. The highest-quality olive production occurs in areas having mild winters and long, hot, dry summers. Being a subtropical tree, small limbs and shoots can be damaged by temperatures below 22oF. Temperatures below 15oF can kill large limbs and whole trees. Ideal temperatures range between 35oF and 65oF. This temperature range supplies the chilling hours required for good flower development without damaging vegetative growth. Since olive trees do not "come true" from seed, trees for commercial production are vegetatively propagated. Historically, olives have been grown from cuttings as own-rooted plants. This method continues to be the preferred way of propagating olives. Sometimes, seedlings are grown and are then budded or grafted to a desired variety. It may take up to two years longer to produce a mature bearing tree from seedlings than from rooted cuttings. The ideal crop load varies with cultivar and with tree age and vigor. As a rule, six fruit per foot of shoot appears to result in good fruit size while ensuring moderate shoot growth for next year's crop. Fruit thinning is the most effective method of controlling crop size. Thinning involves removing fledgling fruit, which allows the remaining crop to grow larger and shoot growth to proceed normally. Because of the high cost of hand thinning, chemical thinning is used in commercial crops. The bulk of California's olives (90 to 95 percent) are processed as canned ripe olives. Other uses include pressing for olive oil and producing Spanish-style green olives and other pickled products, such as Sicilian, Greek, and other styles of olives. All California olives sold for canning as black-ripe or green-ripe olives are subject to the regulations of Federal Marketing Order No. 932. The Order provides for mandatory inspection of olives and canned olive products and for the industry-wide support of research, advertising, and public relations activities. Each lot of fruit designated for canned ripe olives must be size-graded by California state inspectors (incoming inspection). These inspectors classify the olives as "canning," "limited," "undersize," or "culls." This classification serves as the basis for paying growers for their fruit. A cold, wet spring is the most frequently-occurring natural peril in producing olives. Prolonged, abnormally-low temperatures during April and May retard bud development and diminish the proportion of fruit-bearing, pistil-containing blossoms. A deficiency of pistil-containing flowers reduces fruit set and subsequent production. Other production perils include early fall freezes and excess moisture. Most disease and insect problems can be controlled through management practices. Disaster payments over the 1988-93 period were paid to olive growers in ten California counties and in one New Jersey county, totalling $2.25 million in aggregate. Tulare County received $1.58 million in payments over the six years, the greatest volume received by any county. Tulare County's payments accounted for about 70 percent of the U.S. total. Butte County olive growers received about $208,000 in payments over the six-year period, while Kern County received about $181,000. All other counties received less than $80,000 in total payments.