September 20, 2023
The world is experiencing an olive oil crisis, and Philadelphia grocers fear it'll only get worse.
Earlier this month, the U.S. Department of Agriculture reported record-high global prices of olive oil. Pricing jumped by 130% in August compared to the same time last year, culminating in a sky-high $8,900 per ton.
The USDA attributes the problem to an two-year drought in Spain, one of the world's leading olive oil producers. With 45% of global olive oil exports, Spain is such a huge player in the market that its harvest impacts the entire industry — and that harvest has been cut in half, NPR says, due to intense heat and scarce rain.
If consumers haven't already noticed a difference in the grocery aisle, the people running those stores have. Andrew Klein, whose family has operated Klein's Supermarket in Fairmount for a century, said several types of olive oil his store received last week were marked up by 25-30%, or an additional $2-3 per bottle. Giant has also seen increases in price "as there is less product available due to weather impacts," spokesperson Ashley Flower said via email.
But if you ask Vincent Finazzo, the founder and owner of Riverwards Produce in Fishtown and Old City, this is just the beginning.
"Everyone who buys olive oils typically buys futures, so they buy the production going forward," he explains. "Most everyone has their oil from the harvests earlier this year, and they're selling through it. So the next batches are going to be more expensive. In the next two or three months, everyone's expecting the prices to jump."
Finazzo knows a lot about olive oil thanks to his direct business dealings with a California production farm and a private Riverwards Produce label that's currently in the works. The latter has put him in touch with Spanish olive farmers over the past eight months, and he says no one seems to know when the situation will improve.
"It's absolutely climate change, and to say it's something else is ignorant," Finazzo said. "This is happening across the food sector in little snippets here and there."
By way of example, he points to Hurricane Hilary, which unexpectedly hit southern California in August. The storm blew through the region at the peak of the table grape harvest, soaking vineyards in torrential rain that caused mildew and mold. Some projections estimate 35% of unharvested grapes, or 25 million boxes, were lost. Late-season stone fruit, like peaches and nectarines, were also impacted.
In Spain, temperatures exceeding 100 degrees have scorched olive trees. The government has rationed water in response to the drought, leaving farmers with about a quarter of the amount of water they normally receive for their trees, Deutsche Welle reports.
The situation will have ripple effects on oils from top competitors, like Italy, Finazzo predicted, since "everyone looks to Spain to see what they're doing to gauge their prices." But in the midst of the price spikes, new markets may open up for South African or Peruvian olive oils, which have been positioned as replacements. Blends could also become an affordable alternative to prized single-origin oils, Finazzo said.
It's not clear whether there will be a shortage of olive oil globally or in domestic markets. In its report, the USDA notes that Turkey had already banned bulk exports of olive oil to shore up its supplies and mitigate pricing. The problem is that many consumers and cultures show a strong preference for olive oil and are reluctant to substitute it for an alternative. This is especially true for countries in the European Union, which is the largest consumer, exporter and producer of olive oil.
As Spain heads into its next harvest in the coming months, Finazzo said certain olive oils might become scarce. But any shortages are likely to hit foodies and chefs much harder than the average Philadelphian.
"I would think your everyday olive oil consumer can't tell you what kind of olives are in their olive oil," he said. "But maybe that gourmet person or chef just might not be able to get that really awesome olive oil, or that awesome olive oil is going to double in price."