Musco Family Olive Co. offers new contracts to olive growers
By Reggie Ellis @Reggie_SGN
TULARE COUNTY – Local olive growers were given a second chance on this year’s crop last week but it may not be enough to save California grown olives.
On March 19, Tracy, Calif. based Musco Family Olive Co. announced it would offer new contracts to Tulare County growers whose contracts were canceled by its competitor Bell-Carter Foods at the beginning of the month.
“We want every farmer impacted by this decision to know that Musco Family Olive Company is committed to the California ripe olive industry. Our gates are open to purchase this year’s crop to meet our increased supply needs from any grower who commits to our modern growing and harvesting goals,” said Felix Musco, CEO of the third generation family owned processor. He added, “Additionally, while preference will be given to those growers who commit to planting mechanically harvestable acreage, we will also offer a one-year contract to as many acres as we can to provide everyone with more time to consider this opportunity.”
Milo Gorden, who’s been growing olives in the Lemon Cove and Ivanhoe area for 20 years, said he was encouraged by the news but said he is hesitant to trust Musco after being burned by Bell-Carter a few weeks earlier.
“I’m not holding my breath,” Gorden said. “Nothing changes until I have a contract in my hand.”
Even if he were to get a contract, Gorden said it would only be a one-year reprieve for his groves. Musco was the first to demonstrate and utilize mechanical harvesting as a viable option for picking olives in California. Musco said it is committed to modern planting to ensure competitively-priced fruit and strong grower returns.
The problem is that many Tulare County olive grows predate the advent of mechanical harvesting with trees that are too tall and wide and rows that are too far apart. The California ripe olive industry has a long and storied history. The black ripe olive process was developed in California over 120 years ago by Freda Ehmann of Oroville, Calif. According to the University of California, olive groves cultivated for mechanical harvesting maintain trees at a height of about 13 feet with a trunk diameter of 1 foot but traditional groves can have trees as tall as 30 feet with a diameter of 5 feet. Traditional groves also had spacing up to 30 feet between trees and rows. Newer, high density groves space trees just 8 feet apart with rows 16 feet apart.
“A lot of the olive groves in Tulare County are old groves,” Gorden said. “There is no way to convert them to mechanical harvesting.”
Musco is heavily invested in mechanical harvesting as a solution to remaining competitive against foreign markets that receive substantial government subsidies. The company recently unveiled its incentive program for planting mechanically harvestable acreage to its existing growers.
“I firmly believe these monumental events can strengthen an industry. Rather than surrender, I know as a grower and as a packer, now is the time to invest in our California olive industry,” said Dennis Burreson, Musco Family Olive Company’s Vice President of Field Operations and Industry Affairs. “My family’s modern mechanically harvested olive orchards have generated revenue exceeding any other crop we are involved with, including almonds. Because of this, we are now planting additional olive acreage. ”
Unless the federal government closes the loophole allowing unprocessed olives to enter the U.S. market tariff free, Gorden said he doesn’t see a way to save the California crop from extinction. That kind of lobbying would also require growers to pay a per-acre fee, something growers just did in 2017 to file an anti-dumping lawsuit against Spanish grown olives. About 18 months ago, Bell-Carter and Musco 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. Unfortunately, the tariff did not apply to raw olives, creating a $40 million loophole.
The Tulare County Farm Bureau (TCFB) is already advocating to close the gap in order to protect local farmers and 1,500 jobs. In a March 15 statement, TCFB urged state and federal officials to close a loophole on imported raw unprocessed olives. Until then, Gorden says there is no future where California growers can compete.
“I don’t see it going any other way. We can’t produce olives that cheap, even with mechanical harvesting,” Gorden said. “Musco gave us a one-year reprieve but we’ll still end up redeveloping all of the acreage for another crop.”
The California olive industry has suffered for years from unfair trade benefitting Spanish ripe olives. Using what was later determined to be unfair trade practices, Spanish olive exporters years ago seized the U.S. foodservice market and then moved on to capture the U.S. retail market. Olive acreage in Tulare County has shrunk by 20% in the last fifteen years, according to University of California researchers.
Musco said the anti-dumping lawsuit may have left a loophole in the raw olive market but it provided strong enforcement of the trading rights for the ripe olive industry. As a result of that ruling, the California ripe olive industry has quickly regained substantial market share lost to unfair imports from Spain. With the California industry having regained the U.S. retail segment, Musco Family Olive Company said it believes the time has come for the domestic industry to turn its sights on becoming the primary provider to the U.S. foodservice market which is, in total, larger than the retail market. “Regaining the lost sales in foodservice is a huge opportunity for the domestic ripe olive industry and could provide a home for 10,000 acres of new plantings in California,” said Felix Musco. He added, “California has long been the largest and most modern producer of agricultural products in the world. We are proud that olives have been a part of this strong industry for many years and we look forward to investing in our future so the California ripe olive industry will thrive and grow for generations to come.”
Musco Olive Company stated it looks forward to sharing and discussing these programs with all interested growers. For growers interested in learning more about Musco Family Olive Co.’s contract offerings they can contact field personnel at (530) 865-4111.