Olive growers face decisions on mechanization


Issue Date: March 27, 2019
By Ching Lee
In this file photo, farmers watch a demonstration of a “finger”-style mechanical harvester for table-olive trees. A UC Cooperative Extension specialist says mechanical harvesting can succeed in groves where trees are replanted and properly trained—but farmers say they may be reluctant to make that commitment.
Photo/Kathy Coatney

After years of seeing declining table-olive acreage in the state, growers who remain in the olive business have found themselves at a crossroads: Convert to mechanization or face an uncertain future for their crop.

Musco Family Olive Co., one of two major olive processors in the state, is urging them to choose the former. The Tracy-based packer announced last week that it intends to buy this year's fruit from growers whose contracts were terminated by Walnut Creek-based Bell-Carter Foods, the state's other olive processor.

CEO Felix Musco said the company plans to offer long-term contracts to growers "who will commit to our modern cultivation program"—that is, remove their existing orchards and plant new acreage that could be mechanically harvested. Most of the state's table olives are hand-picked.

This new approach requires higher tree density than what exists in typical orchards today and allows growers to harvest 7 to 9 tons per acre, he said. Because the new plantings could be mechanically harvested, "it reduces manpower and lowers labor costs for growers," he added.

The company would provide financial assistance to growers willing to make the necessary investments, Musco said, noting the company "recently unveiled an incentive program to our existing growers because we believe this approach ensures competitively priced fruit and strong grower returns."

For now, he said the company would offer one-year contracts to growers cut by Bell-Carter, giving them a home for this year's crop and "some time for them to understand the opportunities of modern acreage and making the decision to transition."

With language still being finalized for both contracts, Musco said he could not provide details but noted the company has received "a lot of interest from growers throughout the state," and that it plans to offer more information the first week of April.

"As we work through the details in the coming weeks, the important takeaway is that we are confident our industry will be successful for generations to come," he said.

As one of an undisclosed number of growers whose contracts were canceled by Bell-Carter, Joan Vanderhorst, who grows olives in Tulare County, said she is "grateful" to Musco for offering the one-year contracts, but noted it is "a temporary rescue." She described Musco's efforts to get growers to replant their orchards in favor of mechanical harvesting as a "stopgap" measure, as it allows Musco to stay competitive by reducing growers' production costs, thus lowering the price it pays for the fruit.

The bigger issue, she said, is with Bell-Carter, which reportedly sold 20 percent of its share to the Spanish olive company DCoop last year and has been shipping less expensive, foreign olives into the U.S. for processing under a rule that allows the company to avoid paying import tariffs on the raw olives.

Without "checks and balances" to prevent Bell-Carter from bringing in foreign olives, she said, "Musco is not going to be able to stay in business for very long."

As to whether she'll replant, Vanderhorst said she'll use the one year to consider, noting that her 102-year-old trees remain some of the most productive in the state, with yields topping 11 tons per acre.

"You're talking about a historic grove," she said. "Part of the reason we still have these trees in the family is kind of nostalgia. But that's not good business sense."

Though he hasn't seen details of Musco's incentive program, Tulare County grower Rod Burkett, who holds a contract with Musco, said he would be reluctant to replant to olives due to the cost of establishing a new orchard and the alternate-bearing nature of the crop. Even though the new-style plantings that Musco is promoting would save on harvesting costs, Burkett said the cost of pruning to keep the trees shaped is also significant.

"I don't know if it's going to be worth it," he said. "I can't speak for everybody, but for me, I think I'd rather go a different direction and plant other stuff" such as pistachios, almonds or citrus fruit.

But he acknowledged that with employment costs continuing to rise, mechanical harvesting is "absolutely the way we need to go if we're going to have a viable olive industry."

Tim Carter, CEO of Bell-Carter, said his company "carefully looked at" mechanical harvesting, "but we couldn't see how the economics would work out for the farmers or for us."

Research on mechanical harvesting for table olives has focused on two main systems: a trunk shaker and "finger" technology in which moving "combs" make contact with the canopy to remove fruit.

Louise Ferguson, a University of California Cooperative Extension pomologist, said mechanical harvesting could be successfully done with manzanillo olives—the predominant variety for canning—if the trees are replanted and trained properly. In some cases, older trees could be converted, but there would be yield losses for two to three years while the trees are being adapted, she noted.

"It won't be perfect at first, but it's better than not getting the fruit off the trees at all—or getting it off at a price where the processor can't economically purchase it," she said.

Ferguson said the only grower she knows who's tried mechanical harvesting is Dennis Burreson, Musco's vice president of field operations whose family grows table olives in Orland.

In a statement, Burreson said his orchards "have generated revenue exceeding any other crop we are involved with, including almonds" and that his family is planting additional olive acreage.

Ferguson commended Musco for making the contract offers and for "trying to force (growers) to do what they need to do."

"What they're trying to do is save the industry," she said of Musco. "I really give Dennis credit for doing it on his own—and for telling people what they need to hear. Now they're at a crunch point and they have to make a decision."

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.