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Lalitha Vish  |  Jellicles Farm  |  Sunol , CA

Subject: Central Valley Olive shake up..thoughts about future trends?

I have cut and pasted what came to me. Thoughts?

[..]My name is John Werner, and I am a small olive farmer in the Visalia area. I have packed my olives with Bell-Carter Olives since 2010. I grow manzanillo olives which are used to make black table olives. Maybe you have had them. If you have every bought Lindsay Olives (red label on the can) then you have likely eaten olives grown right here in the valley and packed by Bell-Carter. Maybe you have even eaten an olive I grew. Maybe your kids have stuck one of my olives on their fingers…like my kids do.

On evening of Monday, March 4th, I started getting some troubling phone calls and text messages. The first was from the labor contractor I use to prune olive trees in the spring and harvest in the fall. He asked me if I had heard anything about Bell-Carter canceling contracts to buy fruit from growers. He was actually in an olive orchard that day with a crew pruning when the grower came out said, "Stop work. We are done." The grower had just gone to get his mail and had a contact cancellation notice from Bell-Carter.

I was scheduled to start pruning my orchard within the next two weeks and my contractor was calling to find out if we would be cancelling the work. We have since cancelled our plans to prune.

The next thing I received was a text from my ag consultant. He was asking a similar question: had I heard and did I get a letter, too. Well I was starting to hear, but I didn't have a letter yet.

I went online at about 6PM that evening and posted on the My Job Depends on Ag FB group, and my own feed later that night, to see what was happening out there. There have been many replies, and people started to connect the dots on what just happened to the California Olive industry. Bell-Carter had cancelled almost all of the contracts they had with California Olive growers. Farmers were already starting to schedule appointments with bankruptcy attorneys.

The next morning I e-mailed my field representative from Bell-Carter, Jacob Peters, asking about my letter. Is it coming? He replied shortly and apologetically broke it to me: I would be receiving a letter soon. I had been cancelled. I told my wife and kids. We were done.

As I started to talk with folks from around the area, I found out that all but about 7 growers in Tulare County had had their contracts cancelled. Bell-Carter is only keeping 1,500 acres in the Tulare County area and 1,500 acres in the Corning area under contract for the 2019 season. Tulare County Ag and livestock Report, 2017, shows that there are 10,600 acres planted to olives. As growers, we estimate that Bell-Carter had contracts with approximately 6,000 of those acres. It is a difficult number to know from our perspective, but Bell-Carter could provide an accurate total of acres cancelled.

These cancelled contracts will have many impacts. With an average annual production of 7 ton per acre, we estimate that 31,500 tons of Tulare County olives will not be harvested and brought to market this year. A conservative estimate based on the average price per ton (after grading) paid to growers is a loss of gross revenues totaling $37,800,000 in Tulare County alone. That total loss will be realized across the county as lost income to the region. It will not be paid out, in turn by growers, to other supporting sectors. Olive growers operate on very, very tight profit/loss margins and the majority of their gross income is paid out in costs. The largest portion (between 55-60%) being paid to labor just for harvest. That labor percent does not include other cultural costs like pruning, general orchard maintenance, or other farming costs. We harvest in September and October. This means that right before Christmas time, Tulare County workers will lose an estimated $21,735,000 in income from the growers they have worked with for years. All of this is exacerbated by the natural alternated bearing cycle of olive tree fruit production.

[..]

So what, exactly, happened to cause all of this? Currently, there is a U.S. tariff on imported, black olives of 37.5%. However, green, or uncured, olives are not subject to the tariff. Bell-Carter has benefited from this loophole in the tariff as they grow olives in Mexico. The loophole has allowed them to grow olives in Mexico and then finish processing at their Corning, CA processing plant, and thus not be subject to the tariff themselves. Enter Dcoop, A Spanish cooperative the largest producer of table olives and olive oil in the world.

Dcoop bought a 20% share in the largest table olive cannery in the US, Bell-Carter in the summer of 2018. At the time of the 20% acquisition, Bell-Carter had assured everyone that this would be a great benefit because it would mean that Bell-Carter had access to a global market through Dcoop and would need more olives from its domestic growers. Dcoop gained exclusive supply of uncured olives to Bell-Carter in the deal. Bell-Carter denied this claim of exclusive supply in an August 2018 article in Olive Times. Dcoop was set to import its uncured olives through the tariff loophole and now had a processor complicit in assisting them with the imports and final processing of the olives.

Furthermore, the California olive farmer cannot begin to compete with Dcoop. Dcoop relies on subsidies from the Spanish government to support wages and low, near criminal, wages for workers in olives in Morocco and Argentina. The US Department of Labor has been monitoring child labor abuses in the Argentine olive industry for years. This is well documented. Dcoop can import a ton of olives to the US for $400.00 per ton. I spent $650.00 per ton just to harvest my olives last year. That $650.00 doesn’t include all my other cultural costs and farming expenses. It is unfair competition propped up by foreign government subsidies and labor abuse in other countries. I cannot compete against subsidized Spanish olive growers and Argentine olive growers using child labor. I should never be asked to compete against the latter. And to that end, if this continues, there is a high likelihood that the American consumer will be eating olives from Argentina and all that entails. From the fingers of their children to the fingers of ours. We cannot support that.

I have compiled a list of articles to help others understand Dcoop's business model. The California olive grower is the indicator species in the California agricultural sector. We are the canary in the coal mine.

https://www.oliveoiltimes.com/olive-oil-business/spains-dcoop-acquires-stake-in-california-table-olive-producer-bell-carter/64237

https://www.pompeian.com/pompeian-group-and-dcoop-group-spain-announce-expansion-partnership-strengthen-leadership-position?fbclid=IwAR3JWuRuhXNMd-jaIzO3XC4wJwTKDW0NymVLnT8yDtMMoZmjkplZ6tEr1bY

http://www.usspainexecutives.org/en/2017/12/22/english-importing-spanish-olives-and-olive-oil-into-the-us-interview-with-enrique-escudero-ceo-of-acorsa-usa/?fbclid=IwAR32MzP_oaCBog2j85e-huiC8zoq0mDGc1rGQ9t8bMKEA7TAki6AlohKR2Y

https://www.cargill.com/news/releases/2014/NA31706781.jsp?fbclid=IwAR36wMLUSv8yx3Igq5bHZGNCU215Zt6PP93W3fyxo3PekvoNhBveqMuNefs

http://www.usitc.gov/publications/701_731/pub4718.pdf

https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods?items_per_page=10&combine=argentina

A large number California olive growers have just become unnecessary and have almost no alternative methods of seeking relief. We grow for an industry that operates on very tight income/loss margins. Just about every one of them is small farmer. They do not have the resources to start a new processing plant on their own or through a cooperative. Even if they did, it would take years to establish such a plant. We need relief now. Most will struggle just to remove their orchards, let alone replant to a substitute crop. The other olive processor, Musco, is not taking any new growers. Musco is physically not able to take all of the displaced growers as they lack the capacity to process the magnitude of tonnage released by Bell-Carter. Musco has told growers that they are not taking any new growers. We cannot switch our production to olive oil because olive trees pruned for table olive production are not compatible with the methods used to harvest for olive oil. Furthermore, our orchards are not planted on a spacing to make harvesting for oil economically feasible. There are not many options available.

So, I have this orchard that is worthless, but that is not the only impact. It will become a vector for disease and pests to the remaining olive growers and other crops in my region as it sits idle. My trees will set fruit, but that fruit will not be picked. I, and every other olive grower, will stop maintaining our orchards. Most will not be able to remove their orchards on their own because of the cost. We will have an agricultural crisis that stretches far beyond the affected olive growers as their orchards sit and become invested with pests and disease.

This specific issue is affecting small farmers, labor, consumers, supporting business, and, in time, other areas of the agriculture sector. Furthermore, the plight California olive grower is an indicator for things to come in other areas of California agriculture as the California olive grower operates in a delicate, fragile space and is subject to many factors beyond a tariff loophole. The actions taken by Bell-Carter and Dcoop to leverage the loophole are simply the straw that broke my back.

[..]

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Comments 2
03/18/19
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  |  Texas Center for Local Food  |  Elgin, TX commented

Nilson, Your lack of empathy is striking. Farmers do what they think is best with the information they have at the time. I would suggest you hold your judgment for another time. SB, Texas

04/09/19 8:29 AM
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  |  Wine Country Cuisine  |  Santa Rosa, CA commented

No offense, but you are the perfect marketing example as to why mono-cropping is a bad business plan for farmers. Crop diversity is more complicated to manage but reduces the loss of sales due to market declines. Many upscale grocery store have olive bars with over a dozen varieties. You maybe could graft over your trees and offer 12 varieties in a few years. Meanwhile, consider growing something else that sells. I get $7.20 per pound from my grocery store for arugula. It takes 28 days from seeding to harvest. Good luck.

03/30/19 9:23 PM

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