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  • Randy Pench / rpench@sacbee.com

    Antonio Martin de Oliva dumps manzanilla olives into a bin at Ternero Farms in Corning. California's olive oil producers say they're being hurt on two fronts: federal policies that help foreign producers and lax enforcement of olive oil standards.

  • Randy Pench / rpench@sacbee.com

    William Lopez strips manzanilla olives from a tree at Ternero Farms in Corning. Although California olive oils are ranked among the best in the world, critics say the state is swamped by foreign imports, many of them substandard.

The Conversation: How 'extra-virgin' is your olive oil?

Published: Sunday, Oct. 21, 2012 - 12:00 am | Page 1E
Last Modified: Sunday, Oct. 21, 2012 - 8:02 am

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California produces some of the world's finest olive oil, yet one of its biggest obstacles in the struggle for market share isn't competition from Italy or Spain, it's from the United States government.

From trade inequities to quality control to product labeling to foreign aid, the government, perhaps unwittingly, has created barriers for local growers who want nothing from Washington but a level, free-market playing field.

Olive oil is big business. Americans spend $700 million on olive oil annually, up nearly 40 percent in the last 10 years. Yet only 2 percent of the olive oil sold in America comes from California. The rest is imported.

How can this be when olive oils from the Golden State repeatedly impress in competitive tastings while garnering effusive praise among critics and foodies?

The effort over the past dozen years by California producers to grow the domestic olive oil industry has been a task of seemingly Sisyphean proportions.

Take subsidies. California olive growers get no federal subsidies from Washington, and to be clear, they absolutely don't want them. Europe, however, is different.

"Olives are a popular crop in Europe because it's so heavily subsidized," says Gregg Kelley, CEO of the California Olive Ranch in Oroville, the nation's largest grower and processor of olive oil. "The second-highest subsidized crop in all of Europe."

Kelley tells me the European Union and the International Monetary Fund subsidize up to 40 percent of production cost, translating into almost $4 a gallon for a commodity that costs about $10 to $12 a gallon to produce.

Europe subsidizing its olive growers is Europe's business, yet the United States also engages in subsidizing growers overseas.

Since 2007, Washington has spent nearly $700 million of your tax dollars to stimulate olive growing in Morocco, rehabilitating its more than 1 million acres of existing olive trees and planting 150,000 acres more. The money comes from the congressionally funded Millennium Challenge Corp., created by Congress in 2004 to combat global poverty and promote economic growth among partner nations. It has distributed $7.4 billion to 23 countries for dozens of commendable projects like roads, water systems and schools.

There's no conflict, say MCC officials, who claim that Moroccan olives will go into making oil while U.S. farms produce mainly table olives.

That seems an odd assertion given the growing admiration for California farmers fixated on quality and for olive oils increasingly topping various taste tests in recent years. Last summer, Consumer Reports tested 23 extra-virgin olive oils. Only two ranked as "excellent," both from California, outdistancing all Mediterranean comers.

The mid-Atlantic states, which include the D.C. area, have been among the strongest retail supporters of California olive oils. Yet, when California growers went to Washington to express their concerns, they were met with blank stares.

"The USDA and the MCC told us they never even knew there was an olive oil industry in the United States," says Joe Muller, a member of the California Olive Oil Council and manager of the Séka Hills Olive Mill in the Capay Valley.

An MCC spokesman says it's aware of California's concerns, "but we have not seen any evidence that our investment to reduce the extreme poverty in Morocco will impact the U.S. market for olives."

Not so, say California growers. Last year, the San Francisco Chronicle reported that Moroccan table olives now account for almost 35 percent of the U.S. market share. Large chains that once bought California black olives in bulk to serve on pizzas, tacos and sandwiches now use Moroccan and Spanish olives.

Additionally, growers argue that Morocco's Picholine olive now glutting the American institutional food market is dual use – for eating and oil. Moroccan olive oil sold to Spain is often refined there and later sold in the United States as virgin or extra-virgin, when in fact, it's likely of neither grade.

Many of the bottles on supermarket shelves labeled "extra-virgin" olive oil aren't. In his book, "Extra Virginity: The Sublime and Scandalous World of Olive Oil," freelance journalist Tom Mueller chronicles how resellers dilute extra-virgin olive oil with cheaper, lower-grade oils before passing the corrupted blend along the supply chain.

One olive oil producer told Mueller that half of all olive oil sold in the United States is, in some way, adulterated. Some oils, particularly in food service, aren't made with olives at all. They're blends of hazelnut, soybean, sunflower and others, colored green with chlorophyll and doctored with flavorants.

In 2010, the UC Davis Olive Center, a self-funded partnership between the university and the olive oil industry, found that 69 percent of imported extra-virgin olive oils bought in California supermarkets – including brands like Bertolli, Berio and Carapelli – failed to meet international standards. Nine of 10 California olive oils tested passed easily.

Last month, the center tested olive oils used in the food service industry and found them "so defective that they were classified by sensory panels as 'not fit for human consumption' under the USDA standard."

Mueller told state lawmakers at a hearing earlier this year: "Clear laws exist on olive oil quality, adulteration, false advertising, food labeling and so forth. But nobody is enforcing these laws. Not the FDA. Not the state health departments. Not one district attorney. Nobody."

"Most Americans have never tasted truly extra-virgin olive oil," Kelley says. "They've tasted oil that had 'extra-virgin' on the label, but it's not extra-virgin, and importers know it."

"We need to educate," says Felipe Ternero, a native of Spain who married here and began farming olives in Orland 15 years ago. "We want people to know what good olive oil is."

Working the current harvest with him are Antonio Deoliba and Enrique Cortines, two growers from Spain who both told me how Europe routinely dumps low-grade oils on the United States.

"It's all Americans know," Deoliba says. "Their buying is all based on bad product sold here. Only one in 10 have tasted California oil."

"I'm from Spain, but the best olive oil is here," Ternero says.

So why isn't California, with a superior product, able to compete globally? "Unfair trade practices," Kelley explains. "To export, I would be saddled with $1.57 tariff per kilogram; European imports pay 5 cents."

Between that and the heavy subsidization, is it any wonder 85 percent of the world's olive oil comes from Europe?

Competing with countries subsidized by their own governments is tough enough, but competing with countries enabled by our government thwarts our ability to grow a vibrant olive oil industry here, an industry that could easily become as pre-eminent as California's other great varietal product, wine.

Growers aren't looking for favors, just fairness.

"If California were to supply only 20 percent of our domestic consumption of olive oil, we would have to plant 100,000 acres of olive trees in the state," Kelley says. "That would generate an investment of $4 billion in California. Think about the jobs generated from that."

There's hope. This month, the U.S. International Trade Commission announced it will investigate the market conditions facing American olive oil producers.

Farming is one of the few things left that Americans do well and in abundance. The government should be cultivating it (no pun intended), not inhibiting it.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Bruce Maiman



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