Rising costs undermine profitability of Spain’s olive sector

More than 75% of Spain’s olive groves are currently operating at a loss or on the edge of economic viability, as the cost of producing olive oil exceeds the price received by growers for most grove types. This is according to a 2026 study by the Spanish Association of Olive Municipalities (AEMO).

According to the study, producing 1 kg of olive oil costs between EUR 3.08 in irrigated super-intensive groves and EUR 5.31 in traditional rainfed groves where mechanisation is not possible. Meanwhile, the weighted-average producer price in Spain across all grades was about EUR 3.26/kg in July.

The average cost of producing olive oil in Spain increased by 57% between 2020 and 2026. The rise was driven by higher labour, machinery, energy, fuel and fertiliser costs. The largest differences in costs are linked to the potential for mechanisation, as harvesting in traditional groves on sloping land requires significantly more manual labour.

According to AEMO, only super-intensive groves can cover their costs at the current producer price. Production costs amount to EUR 3.20/kg for irrigated intensive groves and EUR 3.52/kg for rainfed intensive groves, while costs reach EUR 4.67/kg and EUR 5.31/kg, respectively, in traditional mechanisable and non-mechanisable groves.

The study accounts not only for current cultivation costs but also for the amortisation of grove establishment and the cost of land use. AEMO said prolonged pressure on profitability threatens the traditional olive-growing model, particularly in mountainous areas where such groves also have environmental and social importance.

Tags: prices, olive oil