Trade Economics of Olives and Olive Oil: Data and Issues Sacramento - - PowerPoint PPT Presentation

Trade Economics of Olives and Olive Oil: Data and Issues Sacramento Valley Olive Day Orland, July 6, 2018

Daniel A. Sumner and William A. Matthews

University of California Agricultural Issues Center

Motivation, Orientation, and Overview

• International agricultural trade is in the headlines these days and

concerns abound…what does trade turmoil mean for farms?

• Economics underlie almost every decision in agriculture and

international trade affects both costs and returns

• Import access to the US affects farm input costs, and competition in

domestic markets. Access for US exports affects output demand and prices for most California farm products.

• We know more open markets have been broadly good for economic

growth and incomes over the past 70 years, but governments are often motivated to limit market access and impose import taxes

• Olives are different from most California commodities in that exports

are minimal, while import competition is robust

Index of US Olive Acres, Yield and Total Production, 1998-2017

• 2.5

1998: Acres = 35,300 Yield = 2.55 tons/acre

2.0

Production= 90,000 tons

1.5 1.0

2017: Acres = 36,000

0.5 Bearing Acres

Yield = 5.34 tons/acre

Total Production

Production= 192,300 tons

Yields per Acre 0.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: USDA ERS

• 120

Utilization of US Produced Olives, 2007-2017

Canned Crushed for Oil Volume of Olive (1,000 short tons) 100 80 60 40 20 2007 2009 2011 2013 2015 2017

Source: USDA ERS

I •

• Source of Available Supply of Olive Oil Marketed in US

Olive Oil Supply (million pounds) Imports US Production 800 31 35 22 13 700 7 600 500 400 300 200 100 591 729 710 696 687 2009 2011 2013 2015 2017

Source: USDA ERS

2017 US Olive Oil Imports by Source Total $1.44 billion ($millions)

Argentina $63.9 Turkey $63.8 EU $1,192.0 Tunisia $61.9 Chile $33.4 Rest of World $31.5

Source: US Dept of Commerce

2017 US Olive Oil Imports by Olive Oil Grade Total $1.44 billion ($millions)

Virgin $36 Extra Virgin $1,048 Refined $331

Source: US Dept of Commerce

2017 US Extra Virgin Olive Oil Imports by Source Total $1.05 billion ($ million)

Source: US Dept of Commerce

Rest of World $21.6 Turkey $23.2 Chile $33.2 EU $864.5 Argentina $61.2 Tunisia $44.4

2017 US Extra Virgin Olive Oil Imports From EU by Country Total $864.5 million

Rest of EU

($ million)

$3.3

Source: US Dept of Commerce

Italy $447.7 Spain $374.3 Greece $39.2

2017 US Olive Oil Exports by Destination Country Total $28.2 million ($ million)

Source: US Dept of Commerce

Rest of World $6.5 EU $3.3 Canada $11.0 Taiwan $1.8 Japan $0.6 Mexico $5.0

Farm trade news has mostly about lost exports

• Almost all the news about farm trade this year has been about the

treat of trade policy turmoil has been causing for exports

• This makes sense because most major US commodities are export

dependent and the countries targeted for new US trade barriers are the largest import markets

• Commodities are dairy products, beef, pork, tree nuts, wine, fresh

vegetables as well corn and soybeans are highly vulnerable

• The threats and actions change every few days and sometimes

solutions seem close, but as of this week, new US tariffs are in place and retaliation has begun

• There may be some good result envisioned but for agriculture the costs

are already real.

Source of Available Supply of Table Olives Marketed in US

• Volume of Table Olives (million pounds)

400 350 300 250 200 150 100 50 109 212 US Production Imports 343 180 232 77 138 234 234 225 2008/09 2010/11 2012/13 2014/15 2016/17

Source: USDA ERS

I-

• US Table Olive Import Value and Volume, 2008-2017

$425 180 $415 Value Volume (MTs) 170 $405 $395 160 $385 $375 150 $365 140 $355 $345 130 $335 $325 120 Value of Imports ($1 million) Volume of Imports (1,000 MTs) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: US Dept of Commerce

Unit Value of US Table Olive Imports, 2008-2017

Unit Value per Metric Ton $3,200 $3,000 $2,800 $2,600 $2,400 $2,200 $2,000

Source: US Dept of Commerce

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

2017 US Table Olive Imports by Source Total $387 million ($ million)

Source: US Dept of Commerce

Morocco $24.8 EU $337.3 Egypt $7.0 Turkey $5.5 Peru $4.2 Rest of World $8.4

2017 US Table Olive Imports From EU by Country Total $382.2 million ($ million)

Greece $145.8 Spain $204.8 Portugal $6.9 Italy $21.7 Rest of EU $3.1

Source: US Dept of Commerce

2017 U.S. Table Olive Imports by Product Tariff Line Description Total $387 million ($million)

Source: US Dept

• f Commerce

Broken or sliced salad style Green Oives, Container less than 8KG $21 All other trariff Lines $126 Whole Not Pitted Green Oives $35 Whole Stuffed Green Olives, Containter less than 8KG $102 Sliced Not- Green Olives, Canned $61 Whole Pitted Not- Green Olives, Not Canned $43

2017 US Table Olive Exports by Destination Total $12.4 million ($ million)

Source: US Dept of Commerce

Canada $4.2 Japan $2.2 China $0.9 Korea $0.9 Mexico $0.7 EU $0.7 Rest of World $2.8

Rest of World 548.3

2016/17 Global Table Olive Production by Source Total 2.7 million metric tons (1,000 MTs)

Source: International Olive Council

Spain 490.8 Egypt 500.0 Turkey 433.0 Algeria 234.0 Greece 204.0 Syria 190.0 Morocco 100.0

Rest of World 116

2016 Global Table Olive Exports by Source Total 868.4 thousand tons (1,000 tons)

Source: GTA Database

Spain 315 Greece 146 Egypt 67 Turkey 57 Morocco 99 Argentina 67

Thank you aic.ucdavis.edu