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<pre>Brian:

I agree with your points. However, the fact remains: If one wishes to be
profitable in the olive oil business in California (i.e. growing olives for
oil) and be somewhat competitive with the table industry here, the 20% oil
level is required. Of course, if one controls all aspects of the business
(i.e. growing, processing, labeling, marketing etc.) and does not allow
someone else to do this for them, profit can be developed in "value added" -
simply growing the olives for some one else to "add the value" (processing,
marketing etc.) is very risky and, I believe, un-profitable. Indeed here,
growing the olives is the weak link in the system - the money is made in
value added.

Note, that waiting for 20% oil here (and I believe elsewhere) has one
serious consequence, especially for heavily cropped trees where this point
will be substantially delayed. For the varieties we have here, a very
depressed crop level will result the following season (as an aside, in my
opinion, profit in olives has to be evaluated over a two year period,
partially for this reason). This will greatly aggravate biennial bearing,
the bane of profitable olive growing.

Apparently I cannot attach files in this venue. So, I will send you a "word"
file with our cost analyses (developed at 19% oil yield) to your e-mail
address. Keep in mind these are California costs and should not be
translated to represent those of other countries. However, the study does
represent a good format one can use to put in their costs and project
revenues.

Steve Sibbett
U.C. Farm Advisor
Phone - office 559.733.6486
Mobil 559.280.0666
FAX 559.734.2708

-----Original Message-----
From: Brian Chatterton [mailto:tn7685@orvienet.it]
Sent: Saturday, August 19, 2000 12:44 AM
To: Olive List
Subject: [OliveOil] Profit


Steve

I am sticking to my guns with the 20%. I am assuming growers want to
make a profit but that comes from the yield of oil and the price.
The percentage oil is firstly dependent on the time of picking. If
you wait long enough almost anyone can get 20% but the yield will be low
because a large percentage of the fruit will have fallen on the ground.
In the past these were picked up but labour cost make this impossible
besides the quality of fruit on the ground is poor - really bad. The
percentage oil changes over the picking season and growers need to
obtain the best combination of oil yield and quality/price. The amount
of oil per kg of fresh fruit is a minor factor in the profit equation as
it only alters processing costs by a tiny fraction.
Secondly the percentage oil varies with the season. There are heaps
of research results from all over Italy and some from California that
show there is about 5% variation in % from the same trees picked at the
same time from year to year. Some were quoted in the Australian Olive
Grower in April from Provincia di Grosseto in southern Tuscany.
Thirdly the unfortunate fact seems to be that high oil percentages
come from environments that do not produce the best oil. Most of the top
oils in central Italy are produced from olives that have less than 20%
oil. It is not that Italian economic are different (although many people
say they are - particularly The Economist in London) but the high price
compensates for the low percentage and the low yield.

I still think that the Olive Production Manual gets itself into a
muddle in Table 23.1 on page 144 as none of these variables are taken
into account and oil percentage in an incredible range are provided. For
example Moraioli (Moraiolo) is recorded as having 18 to 32% oil. If
only! Where was the 32% recorded?


Cheers Brian Chatterton


[Non-text portions of this message have been removed]




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<pre>Steve

I am sticking to my guns with the 20%. I am assuming growers want to
make a profit but that comes from the yield of oil and the price.
The percentage oil is firstly dependent on the time of picking. If
you wait long enough almost anyone can get 20% but the yield will be low
because a large percentage of the fruit will have fallen on the ground.
In the past these were picked up but labour cost make this impossible
besides the quality of fruit on the ground is poor - really bad. The
percentage oil changes over the picking season and growers need to
obtain the best combination of oil yield and quality/price. The amount
of oil per kg of fresh fruit is a minor factor in the profit equation as
it only alters processing costs by a tiny fraction.
Secondly the percentage oil varies with the season. There are heaps
of research results from all over Italy and some from California that
show there is about 5% variation in % from the same trees picked at the
same time from year to year. Some were quoted in the Australian Olive
Grower in April from Provincia di Grosseto in southern Tuscany.
Thirdly the unfortunate fact seems to be that high oil percentages
come from environments that do not produce the best oil. Most of the top
oils in central Italy are produced from olives that have less than 20%
oil. It is not that Italian economic are different (although many people
say they are - particularly The Economist in London) but the high price
compensates for the low percentage and the low yield.

I still think that the Olive Production Manual gets itself into a
muddle in Table 23.1 on page 144 as none of these variables are taken
into account and oil percentage in an incredible range are provided. For
example Moraioli (Moraiolo) is recorded as having 18 to 32% oil. If
only! Where was the 32% recorded?


Cheers Brian Chatterton


[Non-text portions of this message have been removed]
</pre>
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