The Olive Grove

Industry outlook

Olives and their by-products are one of the oldest traded commodities. Over the past 25 years, world production of olive oil has risen by about 1% per annum whilst consumption has increased at about 1.5% per annum. Olive oil consumption over the past ten years has increased much more, driven by increasing awareness of the product’s health benefits.

Spain, Italy, Greece and Tunisia dominate the world table olive and olive oil trade. Together, they represent 80% of table fruit production, 85% of oil production and similar percentages of consumption. Source:International Olive Oil Council

Climate

Like all agricultural projects there is the risk of climatic impact to the crop and grove from events such as high winds, storms, rainfall and frost. In general, the region where the plantation is situated is ideal for olive oil production with hot dry summers/autumns and reasonably cool winters, which provide the critical chilling period.

Water Supply

Whilst olive trees in general do not require as much water as many other commercial crops, the issue of water is no less critical. Olives can in fact be grown not irrigated and produce marginally commercial crops. Most olive trees, regardless of variety are at risk of going into a bi-annual bearing if water is not correctly applied at various critical stages of the yearly cycle (one year with a heavy crop and the next with a significantly lighter crop).

Pest, Vermin and Disease

Olives in the region are relatively free of diseases and pests. The most common pest is the Olive Fruit Fly which can easily be controlled with the appropriate treatment.

Olive Varieties Planted % Total Grove

Aglandau                                       80.00%

Picholine                                          2.86%

Tanche                                             7.71%

Bouteillan                                         7.71%

Cayon                                                1.71%

Soil

Incorrect soils can cause a variety of problems for olive trees ranging from waterlogged roots and poor drainage to diminished yields from factors including poor nutrition and root formation.

Most of the soil on the property has been assessed as suitable for olive tree development under normal irrigation and the plantation has received the financial help and support of the French state agency ONIC-ONIOL.

Most soils have a high water holding capacity but with good natural drainage potential.  Soils have a reasonable alkaline Ph.  They are not uniform and require different management to sustain commercial olive production.

Yields

Mature Aglandau trees can yield 40 kg of olives per tree with a 13% to 18% oil extraction ratio.

Conservatively, on the basis of an average of 20 kg per tree and an extraction ratio of 15%, olive oil production can be estimated to around 20000 litres per year for 7000 trees, with this estimate potentially more than doubling when more mature trees will yield more at higher extraction ratios.

Because farm operations (olive production, etc…) are expected, in time, to yield a substantial gross cash flow, the property can either be analyzed as a farming asset with extension potential, or as leisure farm / second home designed to pay for itself in time.