Tulare County olive growers call olive processor’s decision to end contracts a ‘slap across the face’
By Reggie Ellis @Reggie_SGN
TULARE COUNTY – Milo Gorden has been growing olives in the Lemon Cove and Ivanhoe area for 20 years, but this year may be his last. In fact, Gorden contends this may be one of the last years for California grown olives all together.
Gorden was among a group of Tulare County growers to receive a certified letter from olive processor Bell-Carter Foods dated March 1 notifying them that their contract had been terminated, effective immediately, and that they would not accept any of their harvest in 2019. Bell-Carter declined to be interviewed but did release the following statement from CEO Tim Carter:
“Bell-Carter competes in a global marketplace as a canner and marketer of table olives. Unfortunately, due to rising cost increases for California olives, Bell-Carter made the necessary but difficult decision to release many California grower contracts. While this decision is extremely difficult for us and for our many grower partners dating back three generations, it is imperative to remain competitive and viable.”
Based in Corning, Calif., Bell-Carter is the largest olive processor in the nation. The company is best known for its Lindsay olive brand, which it purchased in 1990s after the Lindsay Olive Growers Plant was shuttered in Lindsay, Calif.
Gorden said Bell-Carter had contracts with growers up and down the state representing 10,000 acres, about 40% of which was in Tulare County. He said the timing of the announcement makes it impossible for growers to sign contacts with a new olive processing facility, and the only other processor, Musco Family Olives in Tracy, Calif., probably won’t be able to accommodate the massive influx of olives in while still meeting its obligations of its current contracts. Olives are harvested from mid-September through early November.
“This was a slap across the face,” Gorden said. “We had no idea this was coming.”
Less than a year ago, Bell-Carter lodged an anti-dumping complaint with the U.S. International Trade Commission against foreign olives claiming Spanish olive growers, such as the world’s largest olive conglomerate Dcoop, were selling their olives at far below value because they were being heavily subsidized by the European Union. According to an industry news source, Olive Oil Times, the complaint led to the Trump Administration’s 37.4 percent tariff on black olives imposed last June.
“The industry banded together and we won,” Gorden said. “Things were starting to look up.”
Two months later Dcoop and its Moroccan partner Devico purchased 20% of the stock in Bell-Carter, a move U.S. growers saw as an effort for Spain’s largest olive oil cooperatives to avoid paying tariffs. Dcoop exports about 7,700 tons of black and green olives to the U.S. but only 4,400 tons are subject to the tariff, according to the Olive Oil Times.
“Spanish growers are heavily subsidized so they can offer a lower price that what processors can buy from us here,” Gorden said.
The Tulare County Farm Bureau issued a statement on March 15 urging state and federal officials to take action to assist growers impacted by these contract cancellations. The farm bureau is asking legislators to close a loophole that allows foreign companies like Dcoop to acquire ownership in a U.S. based olive processor, which then flooded the market with cheap foreign olives displacing California growers. Specifically, the loophole allows Dcoop to avoid paying tariffs on their imported raw unprocessed olives.
The Tulare County Farm Bureau said Bell-Carter’s decision could cost the area 4,500 acres of olives and an estimated 1500 jobs for farm workers who could find their annual income severely impacted.
“These are highly skilled workers that will lose some of their most lucrative earning opportunity with this acreage going out of production,” stated olive grower Bill Ferry.
Significant impacts that concern Farm Bureau and local growers are:
• Loss of farm revenue to the olive growers who lost their processing contracts;
• Abandonment of groves causing nuisance, and pest and disease concerns for adjacent landowners;
• Farm labor contractors reducing hours available to their workers during the pruning and harvesting periods for olives, loss of those jobs and workers leaving the sector entirely;
• Consumers being sold products from foreign countries with less strenuous food safety regulations;
• Farm land acreage being lost, which may cause premature development in rural areas;
• Excessive costs to growers on redevelopment of land into other agriculture crops
• Uncertainty with Sustainable Groundwater Management Act reductions in groundwater supplies;
• Loss of tax revenue to the county and region generated by these jobs
TCFB said the only other major table olive processor in California, Musco Family Olive Co. is not able at this time to ensure that all of this contracted acreage could be processed in their facilities. Until it is known, the displaced growers face great financial uncertainty. Musco spokesperson John Segale released the following statement:
“We are aware that Bell-Carter has recently notified its growers that their contracts have been canceled. We are currently reviewing options that will enable us to provide a home for growers impacted by this decision. It is our hope to finalize a plan in the coming weeks.”
Olive growers also have less than one week to determine if they will renew their crop insurance for the 2019-20 growing season. It would be difficult to incur the expense for crop insurance for a crop they cannot sell.
Gorden said olive growers have slowly been reducing their acreage over the last 30 years in favor of more profitable crops, such as citrus. The cost of redeveloping acreage from one crop to another is about $10,000 per acre and it takes five years for the orchard to mature to its full commercial yield. Unfortunately, winter storms have brought an overabundance of rain and freezing temperatures which will likely have an effect on this year’s citrus crop.
“What else could go wrong?” Gorden said. “This could be the last nail in the coffin of the California olive industry.”