Olive oil prices surge after extreme heat dries up production

The Current21:05Olive oil production is in trouble and thieves are cashing in

Olive oil has a special place in George Pananos' heart. His family planted olive trees and used olive oil in their meals.Though he spent part of his life in Alberta, he eventuallyinherited his parents' olive groves in Thessaloniki, Greece.

But after a summer of wildfires and drought, prices for olive oil have risen sky high and his groves' production of olives has plummeted.

"The yield is down from as little as 10 per cent to as high as 50 per cent of what we had last year," he told The Current's Matt Galloway. "It's a significant reduction in production."

Extreme heat has made it a difficult summer for olive farmers across Europe. In Spain, the world's largest olive-oil-producing country, drought has devastated recent harvests. Bad weather has also hit olive crops in other major growers like Italy and Portugal.

In Greece, Pananos says last winter was unusually warm and they haven't had any rain since June. As a result, his olive groves are stressed out.

"What the trees do under the circumstances, with no rain, they activate a defensive mechanism where they drop their fruit in order to preserve moisture," he said. "So this is what happened that resulted in reduction of fruit."

Pananos, who produces extra virgin olive oil inThessaloniki and exports it for distribution in Alberta, says other olive oil producers and table olive producers have also been hit hard by the extreme heat.

He even says he's "a bit fortunate" by comparisonbecause table olive producers need big, healthy fruit in order to be successful, and they've haven't gotten that at all this year.

Nevertheless, this year's decreased production means the yield is a "write-off."

"The money that we're going to make, if we're going to make it, the money isn't going to be enough to pay for all the expenses. So we are going under," he said.

A summer of extreme heat

The price of olive oil has skyrocketed as a result of the decreased production. According to the New York Times, the price per metric tonne has increased by several thousand U.S. dollars in 2023.

In the U.S., retail olive oil prices have grown 12.5 per cent this year atop an 8.8 per cent increase in 2022, according to Circana, a Chicago-based market research firm.

The price hike has led to a reported rise in olive oil theft in countries like Greece.

"The other day I was in the supermarket here in Thessaloniki, and for the first time in my life, I saw olive oil bottles with some kind of a sensor right on it so that people would not walk away with it," Pananos said.

Thosewhoavoid the crime route may bethinking twice about buying olive oil a significant cultural shift in countries like Greece that loves its olive oil.

"They reduce their consumption. They go with vegetable oil," he said. "Hopefully, it is only temporary."

The situation has some farmers talking about how toadaptto climate change, such as by planting more drought-hardy varieties of olive trees.But Pananos says any change to the farming methods is going to take a long time.

"Some of the farms around here, some of the olive groves were established many years ago, some of them 100 and 200 years ago," he said.

"To make a drastic change they will also have to put up with many years of inactivity to implement such thing."

WATCH: The grim reality of farming and drought in Alberta

The grim reality of drought and farming

12 months ago

Duration 2:48

Due to the drought conditions, many farmers had their crops in the bin early, even though there wasn't much to harvest. We talked to one farmer during the last few swaths of the field about how challenging the last few years have been.

'A crop for the future'

Although farmers like Pananos are concerned about the short-term and long-term effects extreme heat will have on olive groves, some researchers are still optimistic about the plant's future.

"Olive is actually a crop for the future because it doesn't rely so much on water," said Selina Wang, who has been researching olives for more than 15 years.

"It requires moderate amount of water and chemicals for growing olives. A lot of farmers do not use any chemicals at all," she told Galloway.

Wang, an associate professor at the University of California, Davis, said she believes some traditional growing places will no longer be as productive coming out of thisdrought.

But new areas that didn't previously have the conditions for olive groves may get established as a result of a warming climate.

No matter the challenges ahead, Pananos doesn't want to see his olive groves stressed.

"I can't see myself without really consuming olive oil," he said. "It's so healthy. It's something that I recommend to everyone."

"If I were to do without it, there would be something missing in my life."