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Completed project

Australian olive industry benchmarking program (OL16001)

Key research provider: RMCG
Publication date: Friday, March 29, 2019

What was it all about?

This project, which wrapped up in late 2018, was tasked with delivering industry benchmarking information around olive productivity, quality and profitability. The goal was to assist new and experienced growers in assessing the performance of their businesses against the wider industry, and to help in identifying areas for action and improvement.

Those who participated in the project’s data collection were provided with confidential individual reports, while the aggregated and de-identified results and benchmarks are available to all industry in the final research report, available for download at the top of this page.

Insights about the current state of the industry included that many Australian olive businesses are small scale and do face some challenges, which are expressed in the variability of on-farm input/operating costs, yield performance, and income per hectare observed in the data.

While the information should be taken in the context of the entire benchmarking report (and noting all its relevant disclaimers), some of the key benchmarks the project suggested are outlined below.

  • Production scale benchmark target: greater than 80 hectares
    The project team noted that “scale magnifies profits and also losses, but spreads overheads to generate a low cost of production”. They reported that while smaller scale outfits can achieve profit, to achieve machinery and labour efficiency, generally more than approximately 80 hectares is needed.

  • Cost of production benchmark target: less than $10,000 per hectare
    The cost of production per hectare, including finance and overheads, should be less than $10,000 – which is the benchmark for income per hectare of olives. Costs include operating, interest and depreciation, plus the business owner’s labour.

  • Productivity input benchmark target: anything above zero!
    Yes, it may seem a bit obvious to aim for 'more than zero' but interestingly, the project surveys found many groves do not currently spend money in the areas of irrigation and drainage, fertiliser, and pest and disease management. “If any of these factors are limiting productivity, they could have a 10-fold return on investment and easily create profit,” the research team have suggested.
Related levy funds
Details

ISBN:
978-0-7341-4499-7

Funding statement:
This project was a strategic levy investment in the Hort Innovation Olive Fund

Copyright:
Copyright © Horticulture Innovation Australia Limited 2019. The Final Research Report (in part or as whole) cannot be reproduced, published, communicated or adapted without the prior written consent of Hort Innovation (except as may be permitted under the Copyright Act 1968 (Cth)).