Three euros is the cost of producing a kilo of olive oil from super-intensive olives in Spain.. It is the estimate made by theIberian Association of Olive Growers and Hedgerowers Olive Grove Production (Olìverica), underlining that it is the basis from which to start to establish sustainable prices at the source (The cultivation of olive trees in hedgerows, as is known, is carried out at high density, with 1600 to 1900 plants per hectare).
The estimate comes from an examination of the total costs of hedged olive groves which exceed the 4.600 euros per hectare The cost structure has been divided into four main categories: inputs such as fertilizers, pesticides, and irrigation, representing just over 40%; land rental and depreciation, about 30%; harvesting, about 20%; and pruning and soil management, which account for about 10%.
“This cost structure – highlights the Association – This translates into a production cost of more than 3 euros per kilo, a key factor for establishing sustainable prices at source."
The opportunity to highlight the costs incurred was provided by preliminary estimates for the new campaign, which indicate a potentially abundant harvest. In this context, Olivérica warned of the risk that production forecasts could prematurely influence price formation.
The organization warns that anticipate business decisions based on hypotheses that are not yet consolidated can generate competitive tensions between producers and lead to downward pressure on the value of oil at source .
Risk of speculation
Olivérica emphasizes how the market has shown a high sensitivity to the dynamics of the rumours, anticipation and speculation in the current campaign, both in relation to production and yields.
Market performance was influenced by initial forecasts, which were subsequently modified by agronomic and climatic factors, such as episodes of meteorological instability that influenced the consolidation of expected yields.
The association emphasizes that olive groves are subject to unpredictable variables that prevent the early conclusion of production campaigns and, therefore, urges caution when interpreting preliminary estimates.
The increase in costs
The price debate is also taking place in a context of continually increasing production costs. According to estimates by industry organizations, Costs have increased by about a third in recent years, due to rising prices of energy, fertilizers and raw materials. Added to this scenario is the shortage of manpower in rural areas, which has led to increased labor costs and greater operational difficulties for agricultural businesses.
In this context, Oliverica argues that any marketing strategy should take real production costs as a reference point to avoid structural imbalances in the value chain.
Defense of sustainability
The organization warns that a projected drop in prices could jeopardize the profitability of the entire olive oil sector, not just the hedgerow production model. In this regard, it emphasizes the need to preserve the economic sustainability of farms as a structural element of the production system.
And for this reason it hopes for coordination and unity within the sector in preparation for the 2026/2027 campaign, with the aim of avoiding downward pressure dynamics that could arise from expectations of high production.
