How drought caused olive oil prices to double

HostI was at the grocery store the other day looking for a bottle of olive oil and I actually stopped in my tracks when I saw the tag. It feels like just a couple of years ago a decent bottle was maybe eight or nine bucks, but now the same one is pushing twenty. It's one of those things you just expect to be there at a fair price, but lately, it feels like we're buying liquid gold. I wanted to look into why this is happening and if it's ever going to settle back down. So, what's actually driving this huge jump in price?

GuestYou're not just seeing things. Prices have gone up by more than double in a very short window of time. In fact, on the big world markets where they sell it by the ton, the price hit an all time high recently. The simplest way to think about it's that the world has run out of its buffer. For a long time, we produced just a bit more than we ate, so there was always a backup supply. But for the last two years, we have eaten more than we grew. When that happens, the price doesn't just go up a little, it takes off like a rocket.

HostBut we grow olives all over the place, right? I mean, it's not like there's only one farm. Why can one or two bad years break the whole system like that?

GuestIt feels like they're everywhere because we see them in every kitchen, but the truth is that the whole world relies on one very small patch of land. About half of all the olive oil on earth comes from Spain. And within Spain, most of it comes from one single area called Andalusia in the south. It's this huge sea of silver green trees. Because we put all our eggs in that one basket, when something goes wrong in that specific part of Spain, the entire global kitchen feels the pinch. They had a massive heatwave and a dry spell that lasted way longer than the trees could handle.

HostI think most people hear drought and they just think it means the trees didn't get enough water to drink. But these are olive trees. They're tough. They have been growing in the heat for thousands of years. Is a lack of rain really enough to kill off half the world's supply?

GuestThat's the thing, the trees themselves are usually fine. They're survivors. But there's a huge difference between a tree staying alive and a tree making fruit. What happened in Spain was a double hit. First, they had a winter that was way too dry, so the ground didn't have any deep moisture. But the real killer was the spring. To make an olive, the tree has to grow these tiny, delicate flowers. There's a very short window of time, just a couple of weeks, where those flowers need the weather to be just right. Instead, they got a blast of heat that felt like mid summer right when they were blooming. The heat was so intense it basically cooked the flowers right on the branch. They dried up and fell off before they could ever turn into fruit. If you have no flowers, you have no olives, and if you have no olives, you have no oil.

HostSo it's less about the trees dying and more about them just failing to reproduce for a season. But even then, if I own a store and I see the price of my main product double, I would be looking for a backup. Can we not just get more oil from Italy or Greece or even California to fill the gap?

GuestPeople tried, but the problem is that the weather patterns that hit Spain weren't just stuck there. The whole Mediterranean got hit with the same heat and the same dry air. Italy and Greece had their own struggles with pests and weird weather too. And while California makes great oil, they only make a tiny fraction of what the world needs. It's like trying to fill a swimming pool with a garden hose. There just wasn't enough extra oil anywhere else to make up for what Spain lost. This created a real panic in the market. When buyers for big food companies saw the stocks getting low, they started bidding against each other to lock in what was left, which drove the price even higher.

HostIt sounds like it has turned into a high stakes game. I actually read a story about people stealing olive oil from trucks and warehouses. Is it really that bad?

GuestIt has become a huge problem. In some places, they're calling it liquid gold for a reason. There have been reports of gangs breaking into mills and stealing thousands of gallons in the middle of the night. Some grocery stores in Spain have even started putting security tags on the bottles, the kind you usually see on expensive bottles of booze or electronics. And because the real stuff is so pricey, we're seeing more fake oil on the shelves too. People will take cheap oil, like sunflower or canola oil, and mix in a little bit of green dye or a tiny bit of real olive oil to trick people. When the price is this high, the reward for cheating is just too tempting for some people.

HostThat makes me want to check my pantry. But if this is all down to the weather, and the weather is getting more wild every year, are we just looking at a future where olive oil is a luxury item? Or can the farmers do something to fix this?

GuestThey're trying to change how they do things. Some are planting trees further north where it stays a bit cooler. Others are trying to use sensors in the soil to use every single drop of water as perfectly as possible. But you have to remember, an olive tree takes years to start giving you fruit. You can't just flip a switch and move the whole industry. The reality is that the cheap oil we grew up with might have been a bit of a lucky streak. We're probably moving toward a world where we treat olive oil more like wine, where we care more about which year it came from and accept that some years it's just going to be rare and expensive.

HostIt's wild to think that a heatwave for two weeks in Spain can change how much I pay for dinner in a different part of the world.

GuestThe most surprising thing is that even if it rains perfectly tomorrow, those trees need a long time to find their balance again, so those high prices at the store are likely staying for a while.

HostThose silver green trees in Andalusia are essentially the heart of our kitchens, and we're realizing just how much we rely on them now that the weather is pushing back.