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<pre>Frank,

Thank you for raising the dreaded question of
economics. Your dilemma is one facing a very
large number of growers around Australia.

This is a question that faces everybody, nor
simply those with young trees. Ten workers for
eight hours means they averaged 11kg per manhour.
To be world competitive in terms of olive oil
pricing in the long run, these workers would need
to harvest greater than 5 times that weight of
olives per manhour. On more mature trees that
means working higher in trees which is more
difficult work

The problem is the same whether one has young
trees with a light load or mature trees where the
"low hanging fruit" has been harvested and only
the more difficult to reach and sparsely
distributed fruit is available. Is it
economically justified to harvest that fruit?

Some of you have decided that, on a marginal cost
and revenue basis, it's better to leave the fruit
on the trees. I'm not certain what that means in
terms of pest control, bird control and the crop
for the following years. I'll leave those with
expertise in that field to comment.

However, one sensible alternative has been
suggested. There is a market for home pickled and
home pressed olives. At the Vic Markets in
Melbourne just last week, I saw fair to medium
quality olives selling for $5/kilo!! That's not
cheap but it probably means the stall-holders
were paying about $3/kilo for fruit. As a
farmer, you'd be happy to receive that income;
that's $33 per manhour of picking.... double the
cost of picking.

Another way to handle this is to open your olive
grove to families to pick their own fruit. Make
it a fun day! Call the local Greek and Italian
associations and invite their members down. Offer
them self-picked fruit at $1.50/kilo. That's less
than half the price they pay at the markets.
Organise it as a family day and make some money
on an entrance fee ($5/car), sell them soft
drinks and coffee ....the only fly in the
ointment that I can see may be liability
insurance. If there's a good lawyer out there,
how can that problem be overcome?

As farmers, you're in the business of maximising
the returns from the farm..... not simply in the
business of selling EVOO. That may make a big
difference to the way you approach making money
from the olive grove!

Regards,
Lambros Karavis.


At 1:14 PM +0000 1/6/05, OliveOil@yahoogroups.com wrote:
>
>Message: 5
> Date: Wed, 01 Jun 2005 00:53:55 -0000
> From: "cfe55" <cfe55@...>
>Subject: Re: Oil prices
>
>Let's talk about economics.
>
>Our trees are young and this year they produced on average 4kg each.
>
>On the first day of harvesting, I had 10 workers who were costing me
>$17.5/hr. In eight hours they managed to hand rake 880kg of olives.
>That translates to 158 lit of EVO (very dry year and oil content is
>down from 22% to 18%).
>
>At $7 / lit, my income would be $1106, while my harvesting expense
>alone is $1400. What about other costs?
>
>As I can not move my grove to one of the developing countries for
>picking, I have no option but to leave fruit on the trees or pick
>olives myself which would take me about 1500 hours or 180 full days
>:-)
>
>When comparing world prices of EVO, one should not forget, that in
>Australia, it is impossible to find workers who are happy with
>something like $4/ hr , unless government allows migrants on temporary
>visas during the harvesting time.
>
>Perhaps I should become more creative with marketing: $7/lit for EVO
>plus fuel levy, dry weather levy…..
>
>Frank
</pre>
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