ALIFORNIA AGRICULTURAL EXPERIMENT STATION 
 IIRCULAR 370 JULY, 1947 
 
 CALIFORNIA OLIVES 
 
 SITUATION AND OUTLOOK, 1947 
 
 ARTHUR SHULTIS 
 
 - 300 
 
 200< 
 
 100 
 
 1934 
 
 1936 
 
 1938 1940 
 
 FIGURE 
 
 1942 
 
 1944 
 
 1946 
 
 THE COLLEGE OF AGRICULTURE 
 UNIVERSITY OF CALIFORNIA • BERKELEY 
 
What of the future? 
 
 Will the olive situation be more like it was before 
 the war, when prices were poor and yields low? 
 
 1RBH9 
 
 OUTLOOK 
 
 Supply and Demand 
 
 The supply of olives for direct 
 human consumption was well 
 maintained during the war by 
 California production and by im- 
 ports, but there were not always 
 enough of all types available on 
 retail shelves at all times. This 
 would seem to indicate an in- 
 crease in demand, but it must be 
 discounted somewhat because of 
 wartime shortages, rationing, and 
 price controls. 
 
 The gain in olive consumption 
 made during the war can proba- 
 bly be held. Consumer desire for 
 olives can be further increased by 
 good advertising and trade pro- 
 
 motion. 
 
 Production 
 
 Better cultural care, increased age 
 of trees, and favorable climatic 
 conditions have resulted in a 
 tremendous increase in average 
 annual production through in- 
 creased yield per acre. 
 
 Recent high yields can probably 
 be maintained or further in- 
 creased with good cultural care, 
 which would be stimulated by 
 continued good prices. Older or- 
 chards and some recent plantings 
 yet to come into production in- 
 dicate an upward trend in total 
 production, but not over 20 per 
 cent increase in the next fifteen 
 years. 
 
 Orchard Profits 
 
 Olives were not so profitable a 
 crop as most other fruits in the 
 1930's, but during the war they 
 became rather profitable, and 
 compared favorably with other 
 alternative crops. 
 
 With continuing high costs, or- 
 chard earnings will decline as 
 olive prices go down. But heavy- 
 producing orchards can show a 
 profit for many years. 
 
 
Or will it continue to follow the trend of high prices 
 and large yields maintained during the war? 
 
 Let's Look at the Facts 
 
 : 
 
 OUTLOOK 
 
 Prices 
 
 farm price of California 
 olives has risen to profitable levels 
 during the last six years. Ripe can- 
 ning olives rose from an average 
 of $88 a ton (1935-1939) to $156 
 (1940-1944), and olives crushed 
 for oil, from $37 a ton to $112, for 
 the same period. Farm prices of 
 all olives rose from $56 to $139 a 
 ton. The 1945 crop brought $269 
 a ton, and the preliminary esti- 
 mate for the 1946 crop is $352. 
 
 With heavy production continu- 
 ing and a large proportion of 
 olives still going for oil at much 
 lower prices than those for can- 
 ning, lower prices for all olives 
 are to be expected as soon as olive 
 oil prices drop to their postwar 
 level. 
 
 Imports 
 
 Olive imports, largely from Spain, 
 were well maintained during the 
 war, and enabled an increased 
 per-capita consumption. Imports 
 of olive oil fell to almost nothing 
 during certain war years, and for 
 the 1940-1944 period were only 
 about 23 per cent of the previous 
 five years. But California's olive 
 oil output more than doubled as a 
 result of higher prices and the 
 large increase in the state's total 
 olive production. 
 
 Olive imports will probably con- 
 tinue at about the same level as 
 before and during the war. Im- 
 ports of olive oil will probably 
 increase to prewar levels within 
 two or three years, which will 
 bring down the price of Califor- 
 nia olive oil and oil olives. 
 
 New P/ontJ»0s 
 
 Before the war, new plantings 
 averaged about 100 acres per year, 
 but rose to an average of 450 acres 
 for the four years 1942-1945. 
 
 It is too late for additional plant- 
 ings to share in the good earnings 
 of the next few years, and the 
 long-time outlook does not war- 
 rant additional plantings at this 
 time. 
 
CALIFORNIA OLIVES 
 
 SITUATION AND OUTLOOK, 1947 
 
 ARTHUR SHULTIS 1 
 
 What prices and earnings can be expected from olives over the next ten years? 
 Will it pay to plant additional orchards? These and similar questions are 
 important now to those who are interested in growing and handling olives. 
 Definite answers are not available, but we can see what has happened to prices 
 with changes in supply and demand factors in the past. And we can project 
 some of these factors into the future. This circular has been prepared to 
 present some of these facts with a little interpretation. 
 
 Price factors 
 
 Olive prices are determined by demand and supply. Demand is 
 the ability and desire of consumers to buy olives and olive oil. Our 
 supplies of olives and olive oil are from California production 
 and from imports. We can predict the probable level of California 
 production and imports for perhaps ten years ahead. Demand fac- 
 tors can be forecast less clearly, and for only a few years. These 
 will help us to see what may be expected, even though we may 
 not be able to predict a specific price. 
 
 Price Paid Depends on Use.-The use made of California olives is a most 
 important factor in determining the average price paid for all olives (see 
 fig. 1, cover). Figure 2 shows that, except for the war years, canning olives have 
 brought more than olives crushed for oil. Up to now we have needed the oil 
 outlet for cull and small olives and for surplus olives in years of high produc- 
 tion. Keeping in mind the two outlets for olives— canning and oil— let us con- 
 sider the various uses for California olives within those outlets. 
 
 TABLE 1 
 
 UNITED STATES AVERAGE ANNUAL UTILIZATION OF OLIVES BY SOURCE 
 
 
 California 
 
 olives 
 
 used as 
 
 olives 
 
 Imports 
 of olives 
 
 Total 
 utilized 
 
 as 
 olives 
 
 Per cent of supply from 
 
 Pounds 
 
 
 California 
 
 Imports 
 
 per capita 
 
 1925-1929 
 
 tons 
 10,380 
 
 tons 
 20,730 
 
 tons 
 31,110 
 
 per cent 
 33 
 
 per cent 
 67 
 
 pounds 
 .53 
 
 1930-1934 
 
 10,500 
 
 20,540 
 
 31,040 
 
 34 
 
 66 
 
 .50 
 
 1935-1939 
 
 15,100 
 
 19,640 
 
 34,740 
 
 44 
 
 56 
 
 .54 
 
 1940-1944 
 
 24,940 
 
 22,180 
 
 47,120 
 
 53 
 
 47 
 
 .70 
 
 1 Extension Specialist in Farm Management and Associate on the Giannini Foundation. 
 
California Olives: Situation and Outlook 5 
 
 Importance of California Olives.— Practically all the olives produced in the 
 United States are grown in California. This includes about half the country's 
 eating olives— 44 per cent during the five years before the war (51 per cent of 
 California production) and 53 per cent during the war years. Most of the 
 country's olive oil, however, was imported before the war. With 49 per cent 
 of its olives used for making oil, California furnished only 7 per cent of the 
 edible olive oil used from 1935 to 1939. 
 
 FIGURE 2 
 
 CALIFORNIA OLIVES, FARM PRICES IN DOLLARS PER TON 
 
 300 
 
 1925 
 
 1930 
 
 1935 
 
 1940 
 
 1945 
 
 Utilization 
 
 California olives are processed into a number of types and forms, 
 each with its own consumer appeal and demand. The canned ripe 
 olive and olive oil have been the principal outlets for California 
 olives over the years, although recently, with increased total pro- 
 duction, other products are being tried. These include Spanish- 
 and Sicilian-type green olives, and Greek-type olives. 
 
 Canned Ripe Olives.— Canned ripe olives have been the principal and most 
 profitable outlet for California olives in recent years, usually returning two 
 or three times as much as oil. For this type, the olives are picked when straw- 
 colored and may be held for several weeks in brine, for processing. The olive 
 industry expects the canned ripe olive to remain in top place in future, and 
 is rather confident that demand will continue to increase. Exporting coun- 
 tries have difficulty in producing ripe olives free of insect damage. The import 
 duty on ripe olives is also higher than on green olives. 
 
 The green-ripe olive is a variation of the canned ripe. Although meeting 
 with good consumer acceptance, the quantity that can be processed in this form 
 
6 California Experiment Station Circular 370 
 
 is limited since the olives must be picked and processed quickly. Table 3 shows 
 the main ways in which California olives have been used in recent years. 
 
 Spanish-type Green Olives.— Spanish-type green olives have been processed 
 here in considerable volume since 1940, and are more widely known and used 
 outside California than is the canned ripe olive. Most of our imported olives 
 are of this type. Heavy olive production and recent good demand and prices 
 have encouraged the California producers to enter this field. Imports, however, 
 are expected to furnish the bulk of the supply, which may result in a lower 
 return from this type of utilization than from the canned ripe. 
 
 Sicilian-type Green Olives.— For this type, the olives are picked green. They 
 are fermented in brine and frequently packed with peppers, spices, and 
 garlic for flavoring. Their somewhat bitter flavor is often preferred by Italo- 
 Americans and others. Since demand is limited, this type is not expected to 
 be as large nor as profitable an outlet as canned ripe and Spanish-type green 
 olives. This process may, however, offer an outlet for surplus olives not suited 
 to oil production, such as the Sevillano. 
 
 California Greek Olives.— These are made from mature olives that are dark 
 red to black in color. They are dry-salt cured and hence salty and shriveled. 
 This type is eaten as a relish or used as a flavoring in such dishes as stews and 
 spaghetti. Although high in food value, their outlet is limited to those with a 
 liking for the salty, bitter taste. Gleanings of very ripe fruit are frequently 
 used in this form, as are surplus ripe olives not wanted for canning or suitable 
 for oil. 
 
 Another Greek-style olive processed in California during the war is packed 
 in brine and vinegar. This type has not been produced in sufficient quantity 
 over a long enough time to indicate its future possibilities. 
 
 Olive Oil.— Ripe olives are used for making oil, largely those varieties with 
 a satisfactory oil content, such as Mission, Manzanillo, Redding, and Neva- 
 dillo. The Sevillano, Ascolano, and Barouni have such a low oil content that 
 if they are used for oil at all it is merely a salvaging of cull fruit. Before the 
 war, oil was usually only a salvage outlet for small, surplus, or overripe fruit. 
 Only since 1940, with lower imports of olive oil and high prices, have olives 
 for oil been a profitable outlet to growers. When imported olive oil and com- 
 peting substitutes become more plentiful and cheaper, crushing for oil will be 
 only a low-priced salvage outlet once more. 
 
 Fresh Shipments.— Fresh shipments of olives are possible for considerable 
 distances, and out-of-state shipments have taken from 200 to 1,500 tons over 
 the years. Since these are largely processed for home use by eastern buyers, 
 they do not represent any substantial additional outlet. The Barouni, being 
 a large, firm olive, contributes a considerable portion of fresh shipments. 
 Prices are usually about the same as those for canning olives. 
 
California Olives: Situation and Outlook 
 
 TABLE 2 
 
 EDIBLE OLIVE OIL PRODUCTION AND IMPORTS 
 
 
 1925-1929 
 
 1930-1934 
 
 1935-1939 
 
 1940-1944 
 
 California olives crushed for oil (tons) 
 
 Average grower price per ton (dollars) .... 
 
 5,020 
 34 
 
 7,100 
 28 
 
 14,400 
 
 37 
 
 27,260 
 112 
 
 Domestic olive oil production (1,000 
 gallons) 
 
 183 
 10,333 
 10,516 
 
 277 
 9,057 
 9,334 
 
 575 
 7,915 
 8,491 
 
 1,090 
 
 Imports for consumption (1,000 gallons) . . . 
 Average annual supply (1,000 gallons) .... 
 
 1,839 
 2,928 
 
 Per cent of supply from California olives . . . 
 
 2 
 
 3 
 
 7 
 
 37 
 
 Per-capita supply (gallons) 
 
 .09 
 
 .08 
 
 .07 
 
 .02 
 
 Average wholesale price imported edible 
 olive oil in New York (dollars per gallon) 
 
 2.30 
 
 1.71 
 
 1.97 
 
 4.19 
 
 Average wholesale price cottonseed oil at 
 New York (dollars per gallon) 
 
 .72 
 
 .44 
 
 .66 
 
 .88 
 
 TABLE 3 
 CALIFORNIA OLIVES: UTILIZATION, 1940-1945 
 
 
 1940 
 
 1941 
 
 1942 
 
 1943 
 
 1944 
 
 1945 
 
 
 Tons 
 
 Canned ripe and 
 
 green ripe 
 
 Green Spanish. . . . 
 
 Sicilians 
 
 Greeks 
 
 Other 
 
 Fresh shipments . . 
 
 16,200 
 5,100 
 4,200 
 2,200 
 700 
 1,500 
 
 16,700 
 4,500 
 1,600 
 2,500 
 1,000 
 400 
 
 11,100 
 
 5,500 
 1,900 
 1,500 
 1,400 
 1,400 
 
 15,500 
 5,200 
 1,300 
 2,700 
 2,900 
 800 
 
 13,800 
 3,600 
 
 500 
 1,500 
 2,200 
 
 600 
 
 13,900 
 
 3,000 
 
 500 
 
 400 
 
 2,700 
 
 100 
 
 Subtotal, used as 
 olives 
 
 Crushed for oil . . . 
 
 29,900 
 39,100 
 
 26,700 
 28,300 
 
 22,800 
 34,200 
 
 28,400 
 28,600 
 
 22,200 
 19,800 
 
 20,600 
 9,400 
 
 Total production . . 
 
 69,000 
 
 55,000 
 
 57,000 
 
 57,000 
 
 42,000 
 
 30,000 
 
8 California Experiment Station Circular 370 
 
 Varieties 
 
 The size of the fruit and the oil content determine the use tvhich 
 is made of the different olive varieties. The two leading ones, Man- 
 zanillo and Mission, are medium- to small-fruited, with only a 
 small percentage of the fruits classified as ''mammoth." Mission is 
 a good oil olive, while Manzanillo is the best general-purpose 
 variety. The Sevillano and Ascolano are large- fruited varieties 
 used almost entirely for canning. Large olives, being in more lim- 
 ited supply and selling for higher prices when canned, bring a 
 higher price per ton than the smaller ones. 
 
 Mission.— This is the leading variety in acreage. Heavy production in some 
 years results in a surplus of small fruit. This surplus means that the production 
 must go for oil. Mission is a good oil olive, usually yielding 40 gallons or more 
 of oil per ton. However, in some districts it is either a poor or an irregular 
 producer. Fruit of the Mission ripens later than other varieties and is more 
 apt to suffer frost damage before harvest. Also, its tall, upright habit of growth 
 makes harvesting more costly. As a result, much Mission acreage is being or 
 has been grafted over to other varieties, and it is not favored for planting at 
 this time. 
 
 Manzanillo.— The Manzanillo is now considered the most suitable general- 
 purpose variety. Its fruit is a little larger than the Mission, and ripens earlier. 
 It is tender and of high eating quality when pickled. Although not quite so 
 good an oil olive as Mission, it usually brings about the same price per ton for 
 oil. The yield is about 38 to 40 gallons of oil per ton. A low, spreading tree with 
 fairly regular bearing habits, this variety is currently recommended for the 
 bulk of any new plantings in the Lindsay area. Local canners recommend that 
 about 75 or 80 per cent of any new plantings be Manzanillo and the remainder 
 Sevillano or Ascolano. 
 
 Sevillano.— Most of the olives in the Corning area are Sevillanos, the leading 
 large-fruited variety. In other areas the Sevillano acreage is small. These are 
 not good oil olives, and produce only a little over half as much oil per ton as 
 Mission. They are not ordinarily sold for oil manufacture, so any surplus 
 beyond ripe canning requirements must be used for green and other types. 
 Large canned ripe olives or green pickles bring a price premium considerably 
 above that for smaller sizes and therefore have a rather limited market. The 
 olive industry feels that much increase in the production of large olives would 
 reduce the premium and make these varieties less profitable to grow than the 
 smaller, general-purpose, heavy producers which furnish the bulk of the olives 
 sold. 
 
California Olives: Situation and Outlook 
 
 TABLE 4 
 CALIFORNIA OLIVES: UTILIZATION BY VARIETIES, 1944 
 
 
 Mission 
 
 Manzanillo 
 
 Sevillano 
 
 Ascolano 
 
 Bearing acres 
 
 14,028 
 1.55 
 
 5,121 
 2.79 
 
 2,803 
 1.58 
 
 710 
 
 Yield (tons per acre) 
 
 .79 
 
 Types of utilization 
 
 Tons 
 
 Per cent 
 
 Tons 
 
 Per cent 
 
 Tons 
 
 Per cent 
 
 Tons 
 
 Per cent 
 
 Canned ripe 
 
 2,850 
 
 50 
 
 
 
 1,380 
 
 750 
 
 20 
 
 13 
 
 
 6 
 
 4 
 
 7,550 
 2,920 
 
 20 
 
 110 
 
 1,060 
 
 40 
 
 53 
 20 
 
 1 
 8 
 
 2,930 
 520 
 470 
 
 10 
 300 
 
 30 
 
 66 
 12 
 10 
 
 7 
 
 1 
 
 410 
 30 
 10 
 
 
 60 
 
 
 
 73 
 
 Green Spanish 
 
 5 
 
 Sicilians 
 
 2 
 
 Greeks 
 
 
 
 Other 
 
 11 
 
 Fresh shipments 
 
 
 
 
 
 Subtotal, used as olives 
 
 Crushed for oil 
 
 5,050 
 16,750 
 
 23 
 
 77 
 
 11,700 
 2,600 
 
 82 
 18 
 
 4,260 
 170 
 
 96 
 
 4 
 
 510 
 50 
 
 91 
 9 
 
 
 
 Total production 
 
 21,800 
 
 100 
 
 14,300 
 
 100 
 
 4,430 
 
 100 
 
 560 
 
 100 
 
 
 
 TABLE 5 
 
 MANZANILLO OLIVE SIZES AND PRICES IN THE LINDSAY AREA, 1940 AND 1944 
 
 Size grade 
 
 Average 
 
 number 
 
 of olives 
 
 per pound 
 
 1940 
 (large crop) 
 
 1944 
 (fair crop) 
 
 Per cent 
 of total 
 
 Price 
 per ton 
 
 Per cent 
 of total 
 
 Price 
 per ton 
 
 Giant 
 
 number 
 
 60 
 
 70 
 
 82 
 
 98 
 113 
 135 
 
 per cent 
 0.2 
 5.2 
 15.4 
 26.5 
 21.9 
 12.9 
 17.9 
 
 dollars 
 
 112.10 
 
 112.10 
 
 102.10 
 
 87.10 
 
 72.10 
 
 53.55 
 
 20.00 
 
 per cent 
 5.7 
 11.1 
 16.2 
 20.0 
 14.4 
 12.9 
 19.7 
 
 dollars 
 235 00 
 
 Mammoth 
 
 235 00 
 
 Extra large 
 
 210 00 
 
 Large 
 
 190 00 
 
 Medium 
 
 170 00 
 
 Standard 
 
 140.00 
 
 Culls 
 
 100 00 
 
 
 
 Total or average . . . 
 
 100.0 
 
 71.13 
 
 100.0 
 
 173.74 
 
 
 
 
10 
 
 California Experiment Station Circular 370 
 
 Ascolano.— The Ascolano is also a large-fruited variety, but about one grade 
 size smaller than the Sevillano. Although some canners regard it as making a 
 better canned ripe olive than the Sevillano, its softness and high cullings from 
 damage in harvesting make it less desirable from the growers' standpoint. It 
 yields more oil per ton than the Sevillano but too little for profitable sale as 
 an oil olive. 
 
 TABLE 6 
 
 SEVILLANO OLIVE SIZES AND PRICES IN THE CORNING AREA, 1940 AND 1944 
 
 Size grade 
 
 Average 
 
 number 
 
 of olives 
 
 per pound 
 
 1940 
 (large crop) 
 
 1944 
 (fair crop) 
 
 Per cent 
 of total 
 
 Price 
 per ton 
 
 Per cent 
 of total 
 
 Price 
 per ton 
 
 Colossal and larger 
 
 number 
 40 and less 
 50 
 60 
 70 
 82 
 98 
 
 per cent 
 
 16.4 
 
 36.2 
 
 27.7 
 
 12.9 
 
 5.1 
 
 1.6 
 
 0.1 
 
 dollars 
 176.00 
 106.00 
 66.25 
 50.00 
 30.00 
 30.00 
 20.00 
 
 per cent 
 
 28.4 
 
 31.0 
 
 17.0 
 
 12.2 
 
 4.9 
 
 2.9 
 
 3.6 
 
 dollars 
 375.00 
 
 Jumbo 
 
 Giant 
 
 290.00 
 240.00 
 
 Mammoth 
 
 200.00 
 
 Extra large 
 
 150.00 
 
 Large 
 
 120.00 
 
 Culls 
 
 120.00 
 
 
 
 Total or average . . . 
 
 100.0 
 
 95.63 
 
 100.0 
 
 276.75 
 
 
 
 
 Marketing 
 
 Growers and processors both realize that they have a joint interest 
 in marketing a large volume of canned olives at good prices. They 
 have also recognized the need of limiting the pack and using out- 
 lets other than canning in order to keep the price for canning 
 olives from falling too low. The California Olive Association is a 
 trade association of ripe-olive canners, formed to promote the in- 
 terests of the olive industry. This is done largely through collecting 
 and pooling information. 
 
 Processing.— The processing of olives is a specialized commercial under- 
 taking requiring considerable capital as well as technical knowledge and 
 ability. There are about 29 canners of ripe olives in California, and most of 
 these also pack green and other types. A few also make olive oil. Four are 
 grower-owned cooperatives. There are about 80 olive oil plants, but not all 
 operate each year. A number of the canners and oil makers also own orchards 
 from which they obtain part of their olives. 
 
 Marketing Programs.— In 1934-35, a marketing agreement under federal 
 legislation was used by the industry in setting a price schedule for various sizes 
 of canning olives. In 1937-38, there was a prorate plan under state legislation. 
 
California Olives: Situation and Outlook 1 1 
 
 This limited the pack of canned ripe olives, with the result that some of the 
 surplus was diverted to green and Greek types and the remainder to oil. In 
 1940, the State Director of Markets sponsored a meeting of growers and can- 
 ners that resulted in agreements on prices satisfactory to both groups. Al 
 though similar meetings in 1941 and 1942 were not successful, growers received 
 high prices for both olives and oil because of high demand. Ceiling prices on 
 olives and oil largely determined prices for the 1943 to 1945 crops. The 1946 
 crop brought high prices, with strong competition among canners. 
 
 In the immediate future, prices probably will continue to be a matter of 
 individual arrangements between canners and growers, although there will 
 soon be a chance for improving returns through marketing programs under 
 state or federal legislation. Such programs could improve grower returns by: 
 
 1. Promoting wider use and distribution of California olives. 
 
 2. Providing for the most profitable volume each year to each outlet, such 
 as canned ripe, green, oil, etc., by planned processing and carry-over. 
 
 3. Dividing more profitable outlets equitably among growers, taking into 
 consideration the kind of fruit, should such a prorate become necessary or 
 desirable. 
 
 The Supply Situation 
 
 The future United States supply of olives and oil will depend on 
 imports and on production in California. Imports are not expected 
 to be higher than before the war, at least not for some time. Cali- 
 fornia production may increase, but not over 20 per cent over the 
 next fifteen years. 
 
 California Production Varies from Year to Year.— Olive trees are not regu- 
 lar producers from year to year. They tend to alternate bearing. Climatic and 
 other conditions also result in a considerable variation in set of fruit. These 
 influences, together with changes in cultural care, resulted in total production 
 varying from a low of 14,000 tons in 1933 to a high of 69,000 tons in 1940 
 (fig. 5, p. 15). These fluctuations present a marketing problem— in some years 
 production is too low to make full use of processing facilities and maintain 
 an adequate supply of all kinds of olives at consumer level, and in other years 
 there is a large surplus which can only be used for oil. 
 
 Effect of Age of Trees.— It takes several years for a newly-planted olive 
 orchard to come into commercial bearing. Under good conditions, there may 
 be enough fruit in the third or fourth year to pay for harvesting. With con- 
 tinued good growth and development, production may reach a ton per acre 
 around the eighth year, and 3 tons by the twentieth year. Field inquiry, enter- 
 prise management studies, and observation furnish the background for figure 
 
12 
 
 California Experiment Station Circular 370 
 
 3, showing the effect of age on yield. The higher curve shows the level of 
 average annual yields obtained in orchards on good soil, in suitable climatic 
 zones, and with the best of cultural care. The lower curve is an estimate for 
 the state as a whole, which includes orchards under all conditions, but with 
 good cultural care assumed. Yields in any year may be above or below the 
 estimates, but five-year averages could be expected to be not far from these 
 curves. 
 
 But olive trees are long lived and may be expected, with proper care, to 
 produce for 100 years or more. In California they remain in actual or poten- 
 tial production indefinitely, or until removed for more profitable crops or 
 
 TABLE 7 
 CALIFORNIA OLIVES: ACREAGE, PRODUCTION, AND FARM VALUE 
 
 
 Total new 
 plantings 
 
 Average 
 
 non- 
 bearing 
 acreage 
 
 Average 
 bearing 
 acreage 
 
 Average 
 
 annual 
 
 total 
 
 production 
 
 Average 
 
 yield per 
 
 bearing 
 
 acre 
 
 Farm value 
 per ton 
 
 Average 
 total 
 farm 
 value 
 
 
 acres 
 
 acres 
 
 acres 
 
 tons 
 
 tons 
 
 dollars 
 
 dollars 
 
 1925-1929 
 
 1,391 
 
 4,984 
 
 28,264 
 
 18,200 
 
 0.65 
 
 76 
 
 1,379,800 
 
 1930-1934 
 
 549 
 
 2,722 
 
 24,872 
 
 18,000 
 
 0.72 
 
 53 
 
 955,800 
 
 1935-1939 
 
 459 
 
 672 
 
 24,398 
 
 31,000 
 
 1.27 
 
 56 
 
 1,745,600 
 
 1940-1944 
 
 1,483 
 
 947 
 
 24,653 
 
 56,000 
 
 2.27 
 
 139 
 
 7,903,400 
 
 1945 
 
 638 
 
 2,169 
 
 25,076 
 
 30,000 
 
 1.20 
 
 269 
 
 8,070,000 
 
 1946 (prelim, est.) . . . 
 
 
 
 24,751 
 
 46,000 
 
 1.86 
 
 352 
 
 16,192,000 
 
 use of land. Much of the bearing acreage is still relatively young or just reach- 
 ing maturity or maximum production. Hence increased age of trees has con- 
 tributed materially to the increased total production of olives in California 
 in recent years and this upward trend will continue into the future. 
 
 Effect of Cultural Care.— Although the olive will survive considerable neg- 
 lect, it has been shown to respond with better yields to better cultural care. 
 Adequate irrigation, pest control, and proper pruning and fertilization are 
 essential to a profitable succession of heavy crops in an individual orchard. 
 And with generally improved cultural care in all commercial olive districts 
 in recent years, total production has been materially increased. Some orchards 
 and many border trees that were neglected during the logo's were restored to 
 fair production by better cultural care when olive prices became good in 
 recent years. It is expected that yields and total production will remain high 
 or continue to increase as a result of the continuation and improvement of 
 good cultural care, at least as long as olive prices are high enough to make such 
 care profitable. A moderate price decline would cause neglect only in low- 
 yielding orchards in unsuitable locations which contribute a small portion 
 of our total production, and would not be much of a factor in reducing that 
 total production. 
 
California Olives: Situation and Outlook 
 
 13 
 
 FIGURE 3 
 
 CALIFORNIA OLIVES 
 YIELD PER BEARING ACRE 
 
 or <l 
 
 o 
 
 < 
 
 q: 
 uj 
 
 Q. 
 
 Si I 
 
 
 
 Actual Yield — *J 
 
 
 ^— : Trend 
 
 - 
 
 
 \ // \ 1 
 
 \S^J \\ 
 
 
 / 
 
 ^^ V 
 
 
 
 Is' 
 
 , •'/ 
 
 
 
 
 
 
 1930 
 
 1935 
 
 1940 
 FIGURE 4 
 
 1945 
 
 CALIFORNIA OLIVES 
 ESTIMATED YIELD PER ACRE, BY AGE OF TREES 
 
 UJ 
 
 or 
 o 
 
 < 
 
 a. 
 
 en 
 
 z 
 o 
 
 ^- 
 
 10 
 
 15 20 
 
 AGE OF TREES 
 
 25 
 
 30 
 
 1950 
 
 
 
 oung Orchard 
 
 
 
 
 
 
 
 
 In Best Y 
 
 S ^. S* 
 
 
 
 
 
 
 
 
 
 
 Average 
 
 Orchard 
 
 ' 
 
 
 
 
 
 
 
 
 35 
 
14 California Experiment Station Circular 370 
 
 Effect of Location.— Olives are a subtropical fruit, well adapted to the warm, 
 arid conditions and low frost hazard found in several large areas of California. 
 Major areas which have proved suitable are the southeastern part of the San 
 Joaquin Valley, with considerable concentration at Lindsay, the eastern edge 
 of the Sacramento Valley around Fair Oaks and Oroville, and the Corning 
 district near the north end of the Sacramento Valley. There is a considerable 
 acreage in southern California, but yields are low and this area is declining in 
 commercial importance. There are scattered plantings and border rows of 
 olive trees in other regions, some in areas too cool for highly profitable produc- 
 tion. Recent plantings are in commercial areas where good production is 
 obtainable. Additional plantings will likewise be in suitable locations, while 
 removal and abandonment will be largely in unsuited locations. Hence olive 
 production in the future will be more largely concentrated in proven areas 
 with greater yields per bearing acre to be expected. Figure 4 shows recent yields 
 per bearing acre and the probable future trend. 
 
 Trend of California Production.— Present acreage and recent trends in 
 yield and total production, if carried over to the future, indicate an upward 
 trend in total production. This, however, is based on the following assump- 
 tions: 
 
 1. New plantings continuing at the rate of the last five years for only two 
 years more, and thereafter dropping to an annual average of about too acres. 
 This drop will come about because of a decline in oil olive prices after 1948. 
 
 2. Continued good cultural care in main commercial districts despite some 
 decline in the price of all olives, but with canning olives remaining high 
 enough in price to justify such care. 
 
 3. Heavier production in existing orchards due to increasing age of all trees 
 and the coming into bearing of recent and additional plantings. 
 
 4. Little tree removal or neglect of orchards except in areas of poor produc- 
 tion and hence not much of a factor in reducing total production. 
 
 5. Continuing improvement in cultural methods through better knowledge 
 of fertilization, pest control, and equalizing yields from year to year. 
 
 Such calculations give us an increase at the rate of about 500 tons a year. In 
 forecasting future production, it is hard to decide whether to start from the 
 low prewar figures or the high production since 1940. With good olive prices 
 maintained, the upward trend in yields should continue. With low prices and 
 poor care it might turn downward. Keeping these factors in mind, the trend 
 line in figure 5 was drawn to extend from a normal production of about 50,000 
 tons in 1945 to 60,000 tons around i960. Naturally, short crop years will fall 
 far below this line, while occasional crops will be considerably above it. 
 
 In view of the long time it takes young orchards to come into bearing, heavy 
 additional plantings due to continuing high prices would not greatly raise the 
 trend in figure 5 by 1955 to i960. Yield per bearing acre may not be maintained 
 
California Olives: Situation and Outlook 
 
 15 
 
 at recent high levels if low prices of olives reduce cultural care, or if increased 
 infestation of scale insects makes good cultural care too expensive. 
 
 Olive Imports.— Imports of olives to the United States are expected to con- 
 tinue at about recent levels in the near future. The Office of Foreign Agricul- 
 tural Relations of the United States Department of Agriculture is watching 
 developments abroad and sees no immediate opportunity for any exporting 
 
 FIGURE 5 
 
 CALIFORNIA OLIVES, 
 TREND OF TOTAL PRODUCTION 
 
 1930 
 
 1935 
 
 1940 
 
 1945 
 
 1950 
 
 1955 
 
 I960 
 
 country to increase materially its exports to this country. Pickled olive pro- 
 duction in Spain, our main source of imports, is expected to continue with 
 little, if any, expansion. Italy and Greece are resuming production, but United 
 States imports from these countries will probably be somewhat less than in 
 prewar years. An insignificant quantity of pickled olives is produced in Peru 
 and a few may find their way to the United States, but these will have little 
 effect on supply or price. Recent plantings in Argentina are not expected to 
 result in any significant exports to this country for some years, and only then 
 if plantings expand and production increases materially over present levels. 
 (In 1944-45, Argentina produced only 10,544 tons, of which 59 per cent went 
 for oil.) But high consumer incomes and high olive prices in the United States 
 will make this the major market for any olives exported from foreign coun- 
 tries. Imports in 1946 rose to 1 1 million gallons from an average of gi/ 2 million 
 for the two previous years. Until after i960 there will not be enough olives to 
 result in imports to this country much above recent levels of 9 to 11 million 
 gallons of all types. 
 
16 California Experiment Station Circular 370 
 
 Olive Oil Imports.— Our olive oil imports fell to a very low level from 1940 
 to 1944 (see table 2, p. 7). Italy and Spain were the main prewar sources of 
 supply, with France and Greece furnishing some. The trend of imports was 
 downward from 1930 to 1939, and the price was also declining during this 
 period. The future demand and price for olive oil will probably greatly 
 influence our future imports, but it is doubtful if they will return to the 10 
 or 1 1 million gallons of the i92o's. Imports will, however, again become large 
 enough to determine the price within two or three years. This will result in 
 California's olive oil again becoming a mere fraction of United States total 
 consumption. 
 
 Tariffs.— The present United States import duty (1946) is 20 cents a gallon 
 for green olives in brine, 30 cents a gallon for pitted, stuffed, and ripe olives in 
 brine, and 5 cents a pound for dried ripe and other olives. The duty on edible 
 olive oil is 8 cents a pound or 60 cents a gallon, in packages of less than 40 
 pounds, and 6i/£ cents a pound or 49 cents a gallon in larger containers. These 
 duties are equivalent to about $60 a ton on green pickling olives, $90 a ton 
 on ripe canning olives, and $20 a ton on oil olives. 
 
 Demand Factors 
 
 The demand for olives and oil is the result of consumer desire and 
 ability to buy. An increase in demand would result in a higher 
 price for the same amount of olives or in more being sold at about 
 the same price. But it is necessary to consider the demand for olives 
 and for oil separately. Figure 6 shows the price per ton for Cali- 
 fornia ripe canning olives along with the index of income of 
 industrial workers and the per-capita supply of olives, both Cali- 
 fornia and imported. 
 
 The Demand for Olives.— Recent high wartime consumer incomes have 
 resulted in record sales of all kinds of olives at record prices. Per-capita con- 
 sumption was only .4 pounds in the depression year of 1933, but this rose to 
 .8 in 1944. This looks like an increase in demand, but with wartime controls, 
 ceiling prices, and shortages of many things, these recent increases are not 
 a dependable indication of the future. 
 
 Olives are a luxury product to most people and nation-wide consumption 
 is low. Per-capita consumption, however, is not a certain indication of future 
 use, since many people use no olives, while regular users eat many times the 
 .8 pounds per capita. People with a taste for olives furnish the potential de- 
 mand and their number can be increased. To use olives, the consumer must 
 want them, must be able to find them, must have the price, and must be 
 willing to pay the price asked. More people will have the price under condi- 
 tions of high employment and income than during a depression. Current 
 
California Olives: Situation and Outlook 
 
 17 
 
 consumer income is at a high level which is expected to continue at least well 
 into 1947, so demand for olives should continue high in the immediate future. 
 This applies to all olives— ripe, green, and both domestic and imported. With 
 an expected increase in trade and the large variety of excellent products by 
 California canners, olive consumption may soon reach 70,000 tons, or 1 pound 
 per capita, as compared with the 47,120 ton average for 1940-1944. 
 
 FIGURE 6 
 
 FARM PRICE OF CANNING OLIVES, INCOME OF INDUSTRIAL WORKERS, 
 AND PER CAPITA SUPPLY OF EATING OLIVES 
 
 O 400 
 
 250 
 
 200 
 
 150 
 
 100 
 
 1925 
 
 1940 
 
 California Ripe Olives.— California ripe olives also show a modest increase 
 in sales. Tonnage canned from 1934 to 1938, which would largely be the supply 
 from 1935 to 1939, was .16 pounds per capita annually. For the 1941 to 1945 
 period, it was .22 pounds, an increase of 37 per cent, as compared to the 
 increase of 33 per cent for all olives, including green and other types. It looks 
 like a little gain for the canned ripe olive. Packs of over a million cases in 
 1940, 1941, and 1943 moved without difficulty as compared with those of 1937 
 and 1938. In fact, much greater packs could have been disposed of since 1943 
 had they been available, and probably at prices above the ceilings that were 
 set. With continued high consumer purchasing power for a few years, the trade 
 has an opportunity to market more canned ripe olives than ever before if they 
 are not overpriced. 
 
 California canners in recent years have also processed and sold a number of 
 green olives and some other variations of both green and ripe— chopped, pitted, 
 and stuffed. Some of these products, if well advertised and distributed, may 
 meet with good consumer acceptance and provide an outlet for additional 
 olives at favorable prices. 
 
18 California Experiment Station Circular 370 
 
 Demand for Olive Oil.— The future demand for olive oil may continue to 
 decline. It, too, is a luxury product used largely by those who prefer its flavor 
 and character for cooking and salad uses over cheaper vegetable oils. Although 
 it is the finest of all edible oils, it has not yet been found to contain any scarce 
 nutritional elements not adequately available in other foods. In recent years 
 olive oil has sold at from two to four times the price of vegetable oils made 
 from peanuts, soybeans, cottonseed, and corn. This price relationship may 
 continue or be narrowed. It is quite possible that former olive oil consumers 
 who were forced to use substitutes in recent years may have become accustomed 
 to the cheaper oils and may continue to use them even after olive oil again 
 becomes available. This would result in a decreased demand for olive oil. 
 
 It does not seem reasonable to expect many new users of olive oil among 
 those who never used it formerly. Per-capita consumption of olive oil was 
 about .10 gallons in 1929 and fluctuated around a level of .06 annually from 
 1935 to 1939. Because of short supplies, it was between .01 and .02 from 1941 
 to 1944. This consumption is not spread over our entire population but con- 
 centrated among a small portion who are customary users. These may be 
 more likely to decline in number than to increase as the proportion of our 
 population from Mediterranean countries drops. Consumption of olive oil 
 in the United States was going down during the decade before the war, as 
 were prices. This indicates a declining demand which will likely be felt again 
 when olive oil and competing fats and oils again become more plentiful. There 
 is, however, some hope that high quality California olive oil may enjoy some 
 special demand for blending with imported and substitute oils. Under condi- 
 tions of high prosperity there would also be more demand for olive oil than 
 if lower incomes caused a shift to cheaper substitutes. 
 
 Olive Prices 
 
 The price a grower receives depends on the kind, size, and quality 
 of olives he has to sell, the use the buyer thinks he can make of 
 them, and the price the buyer expects to receive for the processed 
 olives and the oil. The price outlook for canning olives is much 
 better than for those tolbe used only for oil. However, the canning 
 outlet is limited, and in years of high production a number of 
 olives suitable for canning may have to go for oil. The oil outlet, 
 while unlimited, brings a very low price. The price outlook for 
 each will be discussed separately, but both are affected by general 
 economic conditions and price levels. 
 
 General Price Level.— When prices of everything go up together, we are said 
 to have a rise in the general price level. Individual commodities may rise or fall 
 in relation to this general level, but the majority of them go along with it. 
 This is true of olives, which have gone up along with the recent rise in the 
 
California Olives: Situation and Outlook 19 
 
 general price level. How much farther prices will rise and when the turn will 
 come cannot be predicted at this time, although in March of 1947, it looked 
 as if we were nearing the high point. When and if the general price level drops, 
 olives and olive oil will also tend to go down in price. We do not expect an 
 early return to the prewar general price level. 
 
 Consumer Food Expenditures.— For many years, consumers' food expendi- 
 tures have been a rather uniform proportion of their incomes. As incomes rose 
 during the war, food expenditures also rose, because people bought more food 
 and paid higher prices for it. With shortages of many things, such as new auto- 
 mobiles, and with rationing of gas and tires, and rent control, consumers could 
 have spent more for food if it had been available and not controlled in price. 
 Now, however, competing items are becoming more plentiful, which means 
 that people will probably spend a little less for food even if incomes do not 
 go down. With less money spent for food, prices will tend to go down. This 
 will include olive and olive oil prices, which are already turning downward. 
 
 Processing and Marketing Costs.— These costs have risen in recent years 
 with increased labor, material, transportation, and other costs. It is expected 
 that they will remain high even after retail food prices go down. Cannery and 
 distributive labor, largely organized, is in a better position to resist income 
 reductions than are olive growers. On the other hand, there have been many 
 improvements in olive processing and equipment. But the grower will proba- 
 bly be hardest hit by future drops in olive and oil prices. 
 
 Canning Olive Prices.— The future prices of canning olives may fall con- 
 siderably below the high prices received from 1943 to 1946 but will probably 
 remain somewhat above prewar levels for several years. In addition to the 
 general price factors mentioned above, canning olive prices will be greatly 
 influenced by the supply or size of the crop and the current demand for canned 
 ripe and other olives processed in California. Present demand is excellent, 
 with almost no carry-over in recent years. It is not likely that the supply of 
 processed olives can be built up fast enough to lower the price badly for several 
 years. The supply of olives for canning, however, cannot be forecast. With a 
 short crop in 1945 and a fair one in 1946, our orchards could come forth with 
 a bumper crop in 1947, perhaps over 70,000 tons. If or when that happens, it 
 will depress the price. Canners are quite optimistic at present, however, and 
 are willing to put up the largest pack in history. Canning olives need not go 
 back to prewar levels because demand should continue good for many years 
 and the price level is not expected to drop back to that of prewar years, or at 
 least not for a long time. If all of California's expected production increase of 
 10,000 tons by i960 were used for canning, it would only increase the total 
 supply of all olives used as olives by 21 per cent over the 47,120 ton average 
 for 1940-1944. 
 
20 California Experiment Station Circular 370 
 
 Oil Olive Prices.— Prices of olives used for oil are certain to decline almost to 
 prewar levels within a few years. The bulk of the supply was imported before 
 the war. Imports are still small but will increase as fast as production in the 
 Mediterranean Basin picks up. Production there was low in 1946 because of a 
 very short olive crop in 1945, but will be near average from the 1946 crop. 
 However, exports are expected only from Spain and perhaps Greece this year. 
 Urgent needs for fats and oils in Europe must first be met, at least until 
 arrangements have been made to obtain cheaper substitute oils in exchange. 
 There will probably be no increase in total production in near future years, 
 so that even with some changes, the net amount available for export will not 
 differ greatly from prewar volume. We do not know how soon imports of 
 olive oil can reach that volume, but when they do, and when other fats and 
 oils become plentiful, the price of olive oil will again be low. This means that 
 the price of oil olives will be much lower than that of canning olives. This 
 point may come in 1948 or may not be reached until 1950. 
 
 Orchard earnings 
 
 As in the past, only good, efficiently operated, high-producing 
 olive orchards will be profitable in the future. Olive orchard man- 
 agement studies conducted by the Agricultural Extension Service 
 in Tehama County in 1938-1942 and in Tulare County in 1940 
 and 1941 show that adequate, economical cultural care, resulting 
 in good yields of good fruit, is essential to profits. A brief summary 
 of the Tehama County study appears in table 8. Price is only one 
 factor which determines profit. Yield per acre times price per ton 
 less costs per acre equals profit. In considering any orchard, find 
 out or estimate its yield carefully. 
 
 Yield per Acre.— The average yield per acre over a period of years is the 
 most important profit factor in the individual orchard. It is the result of loca- 
 tion of the orchard as to soil and climate, the age of the trees, and the cultural 
 care provided, as well as seasonal climatic variations. 
 
 Individual Grower Price.— The price received for olives from a particular 
 orchard may vary widely from the average farm value of all olives because of 
 the variety, size, and quality of the fruit produced. Size and quality of fruit 
 may be affected through proper cultural care. 
 
 Costs.— Production costs of olives rose greatly during the war, but were not 
 so high as prices. These costs will tend to remain high, even after prices drop. 
 In recent years, the parlatoria and other scale insects have greatly increased 
 pest control costs in certain areas of the state, and these pests may spread. 
 Current farm wage rates are two and a half to three times the prewar level. 
 
California Olives: Situation and Outlook 
 
 21 
 
 These may be expected to drop somewhat with a more plentiful labor supply, 
 although never to prewar levels. Anyone considering future ownership will 
 do well to estimate his probable costs as well as income. A standard of costs 
 is presented in table 9, not as a prediction, but as a guide in figuring costs 
 for a particular orchard at a specific time. The hours of operator's labor per 
 
 TABLE 8 
 
 GENERAL SUMMARY OF TEHAMA COUNTY SEVILLANO OLIVE STUDY 
 
 
 1938 
 
 1939 
 
 1940 
 
 1941 
 
 1942 
 
 5-year 
 average 
 
 Yield (tons per acre) 
 
 1.45 
 
 .30 
 
 3.39 
 
 1.51 
 
 2.58 
 
 1.85 
 
 
 Dollars 
 
 Average price per ton .... 
 
 Cultural labor and ma- 
 terial costs per acre 
 
 Harvesting cost 
 
 67.38 
 
 27.42 
 
 34.76 
 
 8.20 
 
 10.65 
 
 21.96 
 
 172.30 
 
 28.07 
 9.58 
 4.42 
 
 10.61 
 
 21.96 
 
 95.63 
 
 26.73 
 
 77.64 
 
 9.43 
 
 10.68 
 
 22.57 
 
 158.40 
 
 29.77 
 
 47.62 
 
 7.77 
 
 11.00 
 
 22.20 
 
 88.96 
 
 34.16 
 
 109.12 
 
 12.16 
 
 11.65 
 
 22.08 
 
 101.71 
 
 29.23 
 55.74 
 
 Cash overhead costs 
 
 Depreciation, trees and 
 
 equipment 
 
 Interest on investment 
 
 at 5 per cent 
 
 8.40 
 10.92 
 22.15 
 
 
 
 Total costs per acre 
 
 Total income per acre .... 
 Management income per 
 
 acre 
 
 Capital and management 
 
 income per acre 
 
 102.99 
 97.63 
 
 74.64 
 50.96 
 
 147.05 
 323.94 
 
 118.36 
 239.08 
 
 189.17 
 229.25 
 
 126.44 
 188.17 
 
 -5.36 
 16.60 
 
 -23.68 
 -1.72 
 
 176.89 
 199.46 
 
 120.72 
 142.92 
 
 40.08 
 62.16 
 
 61.73 
 83.88 
 
 acre shown in the first column is the probable maximum that could be per- 
 formed by a working operator and although included in costs could be con- 
 sidered as noncash expense by such an owner. 
 
 With labor at 60 cents an hour (a possible postwar level), with a 3.5 ton 
 yield, and with other costs as shown in table 9, the cost of producing olives 
 in the San Joaquin Valley would be over $300 an acre and a little under $100 
 per ton. This would allow some profit with olives averaging around $100 to 
 $130 a ton. But an orchard yielding 3.5 tons per acre (annual average) is a 
 good, well-managed orchard. We can be reasonably sure that such an orchard 
 will make some profit in the future. The reader is warned, however, not to 
 accept this standard without taking into account current local yield and cost 
 conditions. 
 
22 California Experiment Station Circular 370 
 
 TABLE 9 
 
 A STANDARD OF LABOR, MATERIAL, AND OTHER COSTS FOR OLIVE PRODUC- 
 TION IN MATURE OLIVE ORCHARDS IN TULARE COUNTY WITH 
 A YIELD OF 3.5 TONS PER ACRE 
 
 
 Operator's 
 labor 
 
 Total 
 labor 
 
 14-hp. 
 tractor 
 
 l^-ton 
 truck 
 
 Cost 
 per acre 
 
 Cost 
 per ton 
 
 
 
 Hours ] 
 
 jer acre 
 
 
 Dollars 
 
 Pruning and brush disposal 
 
 Cultivation 
 
 Irrigation, ]A hour per acre inch . 
 Miscellaneous other cultural 
 labor 
 
 21 
 
 6 
 
 18 
 
 6 
 
 51 
 
 8 
 6 
 
 65 
 
 22 
 
 6 
 
 18 
 
 8 
 
 54 
 
 200 
 6 
 
 260 
 
 6 
 
 1 
 7 
 
 7 
 
 1 
 
 2 
 3 
 
 6 
 9 
 
 14.70 
 10.50 
 10.80 
 
 8.95 
 
 
 
 
 Total cultural labor 
 
 44.95 
 
 120.00 
 12.60 
 
 12.84 
 
 Picking, 36} i pounds per hour 
 
 average 
 
 Hauling boxes, fruit, etc 
 
 34.29 
 3.60 
 
 Total labor cost 
 
 177.55 
 
 50.73 
 
 
 
 Irrigation water, 36 acre inches at $0.30 per 
 Covercrop seed 
 
 acre inch 
 
 
 
 10.80 
 
 1.50 
 
 12.50 
 
 40.00 
 
 1.00 
 
 
 
 
 
 Fertilizer to provide 125 pounds of nitrogen 
 Pest control — contract fumigation, once in 
 Miscellaneous other material 
 
 per acre . 
 2 or 3 year 
 
 
 
 
 s, or spraying 
 
 
 
 
 
 
 
 Total material cost 
 
 65.80 
 
 12.17 
 4.50 
 2.00 
 4.50 
 
 18.80 
 
 General expense — office, telephone, car, et 
 County taxes on land, trees, and enuinment 
 
 c. (5% of* 
 ($200 at $ 
 
 ibove costs) 
 
 ,2.25) 
 
 
 Repairs to improvements and equ 
 Compensation insurance $4.00, b 
 
 ipment. . 
 
 
 
 
 uilding an 
 
 d equipme 
 
 nt insurance $0.50 
 
 
 
 23.17 
 266.52 
 
 6.62 
 
 Total cash cos 
 
 jts 
 
 
 
 
 76.15 
 
 
 
 
 
 
 Investment and investment overhead 
 based on a 30-acre unit 
 
 Original 
 cost 
 
 Average 
 investment 
 
 Interest 
 
 at 5% 
 
 Depreci- 
 ation 
 
 51.84 
 9.00 
 
 
 
 
 Dollars 
 
 an acre 
 
 
 
 Trees 
 
 Buildings for equipment and help 
 Irrigation system and pipe line . 
 Tillage equipment 
 
 1,000.00 
 
 60.00 
 
 100.00 
 
 16.00 
 
 16.00 
 200.00 
 
 1,000.00 
 
 30.00 
 
 50.00 
 
 8.00 
 
 8.00 
 200.00 
 
 40.00 
 
 1.20 
 
 2.00 
 
 .32 
 
 .32 
 8.00 
 
 2.00 
 4.00 
 1.00 
 
 2.00 
 
 
 Harvesting and miscellaneous 
 
 equipment 
 
 Land 
 
 
 Total investment 
 
 1,392.00 
 
 1,296.00. 
 
 
 Total interest on investment 
 
 
 
 51.84 
 
 14.81 
 
 
 
 
 Total depreciation 
 
 9.00 
 
 2.57 
 
 
 
 
 
 Total cost of production 
 
 327.36 
 
 93.53 
 
 
 
 
 
 
 
 Labor costs above are computed at the following rates per hour: man labor, SO. 60; 14-drawbar-hp. tractor, 
 $1.15; 1^-ton truck, $1.50. Tractor and truck rates include overhead based on use of tractor and truck on 30 
 acres only. 
 
California Olives: Situation and Outlook 
 
 23 
 
 New Plantings.— It takes a long time and a considerable outlay of capital 
 to bring a young olive orchard into bearing. Using the yield curve for the best 
 orchards, as shown in figure 3 (p. 13), a price of $100 a ton, and costs in line 
 with those in table 9, we discover the following: 
 
 1. In the thirteenth year, income will cover annual cash and depreciation 
 costs, and by then a net outlay (costs less intercrop rent and olive sales) 
 of $436 per acre will have been made for the trees alone, in addition to 
 that for land and other improvements and facilities (see fig. 7). 
 
 FIGURE 7 
 ESTIMATED FUTURE COST OF DEVELOPING AN OLIVE ORCHARD 
 
 500 
 
 £ 400 
 
 200 
 
 100 
 
 Cash and [ 
 
 Depreciations 
 
 Costs I 
 
 H; Costs Not Covered by Income 
 Income, Intercrop and Olives 
 
 Net Accumulative Cash and 
 Depreciation Costs 
 
 2. When interest on investment (land, equipment, and net cost of trees) at 
 
 4 per cent is included, income from 3 tons of olives (reached in the twen 
 
 tieth year) is required to cover costs, and by that time accumulative net 
 
 outlay for trees is $945. 
 
 Under less favorable conditions, such as higher costs, lower olive prices, or 
 
 lower yields, costs of trees would be higher or first earnings would be reached 
 
 later, if at all. 
 
 Only under conditions where olive prices were higher in proportion to costs 
 would it appear profitable to plant additional olive orchards, except under 
 unusual circumstances. Such circumstances might be the rounding out of an 
 existing farm business or obtaining more of a special variety for a specific 
 purpose. It is too late now for additional plantings to share in the favorable 
 prices and earnings of the next few years. 
 
 6m-7,'47(A4258)