Why Olive Oil Costs So Much

Olive oil has always been an expensive product, long before recent price increases caught shoppers’ attention. What many consumers don’t realize is that those higher prices are baked into how olive oil is made—and newer global pressures are now pushing prices even higher.

Olive Oil Has Always Been Expensive To Make—Here’s Why

Olive trees aren’t like other crops. They take years to mature, require significant space, are harvested just once a year, and produce relatively little oil per tree. According to insiders, roughly 10 pounds of olives are required to produce just one liter of oil, and a single tree might yield 30 to 50 pounds in a good year.

Producing olive oil is also labor-intensive. For the best quality, the fruit is picked by hand and using poles—a slow, time-consuming process. The olives must then be pressed quickly after harvest using expensive machinery and skilled labor. All of this makes olive oil production both costly and unpredictable.

Demand, meanwhile, remains strong. In many countries, olive oil is a kitchen staple, and its uses extend beyond cooking into other areas, including cosmetics, soaps, and even medicines. When demand for a product is consistently high while supply is limited and vulnerable to disruption, prices face persistent upward pressure.

Why Small-Batch Extra Virgin Olive Oil Costs More Than Grocery Store Blends

Another thing you’ll likely notice is the huge price variations of olive oil on supermarket shelves. Sadly, it’s not a case of some vendors sacrificing margins for higher sales. Usually, price reflects quality.

“Small farms … focus on quality over quantity, which means accepting lower yields in exchange for better flavor and higher polyphenol content,” said Patrick Martin, owner of Frantoio Grove, a regenerative organic-certified olive farm and mill in California. “Industrial operations, by contrast, often harvest mechanically and blend oils from multiple sources to maximize volume and minimize cost.”

The best producers, Martin claims, pick individual olives at their peak and harvest them immediately at carefully controlled temperatures to preserve flavor and the fruit’s healthy compounds. Other producers, Martin says, leave olives sitting, which can lead to a rancid taste, then take shortcuts and rush the process of turning them into oil.

These different approaches impact taste, quality, and the cost of producing the final good you find on shelves. And often it’s reflected in the price you find in supermarkets.

Shoppers generally identify better quality olive oil by looking for bottles labelled “extra virgin,” which is the highest grade. However, it seems that distinction isn’t enough.

Martin argues that some mass-market brands find ways to acquire the coveted “extra virgin” tag while blending in cheaper-to-produce, lower-grade oils. This concern is supported by a recent study, which found that several olive oils labeled “extra virgin” exhibited defects that fall short of the relevant regulatory requirements, explaining why some bottles labeled extra virgin are significantly cheaper than others.

Climate Change Is Shrinking Harvests—And Pushing Prices Higher

Another important factor impacting the cost of olive oil is the weather. In many growing regions, climate change is contributing to more frequent droughts, heat waves, and heavy rain, which are straining olive trees and shrinking harvests.

A lack of rain causes trees to produce fewer olives and less oil, while heavy rain and hailstorms damage them.

Heatwaves, meanwhile, stress trees and create conditions where pests and tree diseases can spread more easily. According to Martin, once an olive tree is infected, there’s no cure, and it must be removed to prevent the disease from spreading.

Tariffs and Trade Policies Are Adding Another Layer to the Cost

Tariffs and trade policies add an extra layer to olive oil’s rising cost. More than 97% of the olive oil consumed in the United States comes from overseas, with Italy and Spain alone accounting for nearly 70% of U.S. imports.

Recently, the United States imposed a 15% tariff on olive oil imports from the European Union. This tariff is applied on top of existing customs duties, effectively increasing the cost of bringing it into the country by 15%.

Importers typically pass this extra cost on to retailers to protect their profit margins, and retailers, in turn, pass it on to consumers through higher shelf prices. Inflation has compounded those pressures. Higher transportation costs, rising labor expenses, and more expensive packaging mean that every step of importing and selling olive oil now costs more than it did just a few years ago.

Crucially, higher import costs cannot easily be offset by increased domestic production. The U.S. produces a very small fraction of the olive oil it consumes, and expanding supply is neither quick nor easy.