Spanish oil is changing radically and we are only now beginning to realize it

There was a time when some olive oil jugs came with an anti-theft alarm. Those were the years in which the liter was close to ten euros and analysts wondered if the EVOO culture was dead. Traditional producers were drowning between meager production and falling demand.

That was all two years ago. Now things have changed.

Now prices are at rock bottom and, as a consequence, more than 75% of the Spanish olive grove, according to the association of olive municipalities, already produces below costs. The data is accurate; the producers are still drowning; The panorama is desolate. However, none of this means what it seems.

The 75% figure. The assembly of the AEMO (Spanish Association of Municipalities of the Olivo) met in Adamuz and advanced its cost study for 2026. According to its calculations, the price at origin is 3.51 euros and that means that More than 75% of the olive growing area is already producing at a loss or at the limit of profitability.

It makes sense. The AEMO does a more subtle job than we usually see and elaborates not “a cost” but sevenone for each cultivation system. As soon as we start to think in those terms, the olive grove stops being a ‘sea of ​​olive trees’ and becomes a very complex agro-industrial system.

To give us an idea, the costs of the traditional mountain olive grove are about 5.31 euros per kilo, while the irrigated hedge is 3.07. Thus, with the average price of 3.51 euros, the hedge gains money and the traditional mountain hedge loses almost two euros.

The hunger games. To be fair, we have to recognize that the AEMO is ‘part’ in this discussion (it defends the traditional olive grove) and, furthermore, has not yet published the entire report. However, the figures fit with what we already knew: no matter what happens in the olive oil market, the result is always the same: the irrigated olive grove wins.

This is so clear that there is a whole mad race for make all hectares irrigated that they can (at all costs at a social, economic and environmental level).

The current situation… It has to do, above all, with excess oil: after some bad seasons, we have gone from around 666,000 tons in 2022/23 to around 1.4 million in the last two campaigns.

As there is a type of olive tree that can continue to be profitable at very low prices, there are no real incentives to contain the supply and that exposes a good part of the industry to having to assume the losses to stay alive for another season.

And why should we care about olive farmers now? In our country (and without going into speculation about how good or bad the sector is), the olive grove has a key role in the economic, labor and industrial structure of Empty Spain. It is a discreet and underappreciated role; but that undoubtedly forms part of the basal structure of a good part of the country.

It is not an accident that the association that is moving this is of municipalities: the traditional olive grove is an issue of great territorial importance.

Because we must not be fooled. We talk about surface, not production. The irrigated olive grove is much more productive and is increasingly important. What we are seeing is a change of model within the sector and, linked to that, we are beginning to see the consequences it will have in the medium term.

Spiler: they will not be good for most of olive-growing Spain.

Image | Maximo Lopez

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