Spain's Olive Oil Crisis: 75% of Groves Now Produce at a Loss 2026

Spain's olive oil industry is facing a stark reality: more than 75% of olive groves are now producing at a loss, according to the Spanish Association of Olive Municipalities (AEMO). This dramatic shift comes just two years after prices soared to nearly €10 per liter, forcing supermarkets to lock up bottles. Now, prices have plummeted, leaving farmers struggling to cover costs.

From Shortage to Surplus: The Olive Oil Price Rollercoaster

Just two years ago, olive oil was liquid gold. Drought and poor harvests had slashed production, and demand remained high, driving prices to record levels. Consumers were shocked, and producers enjoyed a brief period of profitability despite low yields.

But the situation has reversed. Favorable weather and increased planting have led to a surplus, causing prices to fall sharply. According to AEMO, the price at origin is now around €3.51 per kilogram, well below the cost of production for most farms.

Why 75% of Olive Groves Are Losing Money

AEMO's study reveals that production costs vary widely depending on the farming system. Traditional mountain groves face costs of about €5.31 per kilogram, while intensive and irrigated systems have lower costs but still struggle at current prices.

The association calculates seven different cost models, reflecting the diversity of olive cultivation in Spain. This nuanced approach shows that the crisis is not uniform; some farms may break even, but the majority are underwater.

• Price collapse: From nearly €10/liter to €3.51/kg at origin.
• Cost disparity: Traditional groves cost €5.31/kg, while intensive systems are lower but still unprofitable.
• Regional impact: Andalusia, the largest olive-producing region, is hit hardest.
• Farmer protests: Growers are demanding government intervention and fairer prices.
• Consumer benefit: Lower prices at retail, but long-term supply risks.

Regional Impact: Andalusia Bears the Brunt

Andalusia, which produces about 70% of Spain's olive oil, is at the epicenter of the crisis. The region's economy is heavily dependent on olive cultivation, and the losses are threatening rural livelihoods.

Small municipalities, many of which are members of AEMO, rely on olive farming for employment and income. The association warns that if the situation persists, it could lead to abandonment of groves and further rural depopulation.

Comparison of Olive Farming Systems and Costs

As the table shows, only super-intensive systems, which are often irrigated and mechanized, can turn a profit at current prices. However, these systems represent a small fraction of Spain's olive area.

What This Means for Consumers and the Market

For consumers, the price drop is welcome news. Olive oil is more affordable, and the days of anti-theft alarms on bottles are gone. However, the long-term consequences could be severe.

If farmers continue to lose money, many may abandon their groves or switch to other crops. This could lead to reduced supply and higher prices in the future, repeating the cycle. The background to this story is set out in Royal Mail Bulk Price Hike: NHS Facing Millions in Extra Costs. A related thread runs through Sister Berates Half Siblings Over Financial Issues She’s Facing, Gets A Reality Check About Being An Affair Child. Earlier coverage in Morocco Expands Desert Farming to Rival Spain's Agriculture shows how the argument developed.

Government Response and Farmer Protests

Spanish farmers have taken to the streets to protest against low prices and rising costs. They are calling for measures such as price regulation, support for small farms, and better water management. A closer look at the same subject appears in Southern Water Ex-CEO Facing Trial for Sewage Test Manipulation. Anyone following the wider picture can start with Climate Change Kills: Pedro Sánchez's Stark Warning to Spain. The same theme surfaces in UK Vegetable Imports Surge as Drought and Heat Hit Crops, which takes a different angle.

The government has acknowledged the problem but has yet to announce concrete solutions. The European Union's Common Agricultural Policy (CAP) may also play a role in supporting farmers through subsidies. Context on how this played out before sits in Spain and Portugal Olive Mills Face 27% Closure Crisis. A companion piece, Morocco's Olive Oil Invasion Shakes Spain's Market Dominance, approaches the same subject from another angle.

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