In July, U.S. Secretary of Commerce, Wilbur Ross, announced the initiations of new antidumping duty and countervailing duty investigations to determine if imports of ripe olives from Spain are being dumped in the United States, and whether producers in Spain (the world’s biggest olive producer) are receiving alleged unfair subsidies.
U.S. Olive Farmers See Spanish Practices As A Threat to the Industry and Livelihood
In early 2017, the California Olive Committee authorized D.W. Block Associates to undertake a study of the current costs involved in producing ripe olives in the state. As part of this project, we personally interviewed several growers in both the northern and the southern portions of California’s ripe olive production region and then reached out to survey a broader sample of California ripe olive growers.
Research Uncovers Costs That Put U.S. Farmers at a Disadvantage in the Face of Spanish Subsidies
Our research found, among many things, that the biggest expense of ripe olive growing is the cost to harvest the fragile ripe product. This data underscores how U.S. olive farmers, 95% of them based in California and almost all “not mechanically run, industrial farms, but multi-generational orchards powered by hardworking American farmers and their families”, see Spain and its subsidies as threats to their industry and livelihood.
U.S. Table-Olive Farmers and Producers Decreasing
The argument is that the steady decline of the U.S. olive industry has been accelerated by subsidies that allowed Spanish olives to take more of the domestic retail market share (the Department of Commerce investigation came on the tail of a complaint filed by the Coalition for Fair Trade in Ripe Olives on behalf of its two members, Bell-Carter Foods Inc. and Musco Family Olive Co citing these reasons). The number of U.S. table-olive farmers is decreasing—approximately 900 remain, and many that are left are decreasing production.
Ongoing Investigations Could Pull the Plug on Spanish Olive Imports
This investigation is ongoing and may result in punitive tariffs later this year that could terminate Spanish olive imports to the United States. European producers argue they’re being unfairly targeted and has prompted involvement by the European Commission in support of its producers.
Olives Are Not the Only Import Under Scrutiny
The olive investigation is the newest addition to a list of products being targeted by the U.S. and President Donald Trump’s trade policies (in addition to steel and aluminum to dairy, lumber and corn).
D.W. Block Associates, LLC is an agribusiness strategy and management consulting firm serving clients in a broad range of agricultural sectors and industries worldwide.
Our goal is to help our clients focus on the essential strategies that will determine their success, and support them in the successful implementation of those strategies. Learn more at www.dwblock.com.