CNN Business – Manuel Heredia Halcón’s grandparents planted the olive trees in his 1,200-acre grove in Andalusia, Spain, almost a century ago.
The trees are renowned for their ability to grow in even the driest of soils, but this year, scorching temperatures and a severe lack of rainfall have taken a toll.
“We are very concerned,” Halcón told CNN Business. “You cannot replace the olive tree with any other tree or product,” he added.
Like many of Europe’s farmers, Halcón has battled extreme drought this summer — he estimates that the olive oil harvest from his farm, Cortijo de Suerte Alta, will fall by about 40% this year because of the extraordinary weather conditions.
In July, temperatures broke records to top 40 degrees Celsius (104.5 degrees Fahrenheit) across parts of France, Spain, Italy and Portugal.
“Next year will be even worse because dams will be completely empty.”
By early August, sweltering heat and a lack of rainfall had pushed almost two-thirds of land in the European Union into drought conditions, according to the European Drought Observatory.
Olive oil producers have been hit hard. Kyle Holland, a pricing analyst for oilseeds and grains at Mintec, a commodities data company, expects a “dramatic reduction” of between 33% and 38% in Spain’s olive oil harvest that begins in October.
Spain is the world’s biggest producer of olive oil, accounting for more than two-fifths of global supply last year, according to the International Olive Council. Greece, Italy and Portugal are also major producers.
Consumers are already paying more for olive oil. Retail prices across the European Union shot up 14% in the year to July. But prices are set to rise further in the coming months, producers and buyers told CNN Business.
“The drought is too significant. It’s simply too dry. Some trees are producing very little fruit, some trees are producing no fruit at all. This only happens when soil moisture levels are critically low,” Holland told CNN Business.
It is a warning shot for an industry reliant on a predictable life cycle for olive trees …