Comparative Study of the Economic Viability of High- and Super-High-Density Olive Orchards in Spain

This study performs a comparative analysis to evaluate the economic performance of two alternative production systems in the olive sector that have received a great deal of attention in the last years, from both researchers and olive oil decision groups, named intensive/high-density (HD) and super-high-density (SHD) systems. While, in average terms, intensive/high-density orchards are characterized by densities between 250 and 700 trees per ha, super-high-density orchards can present densities over 1,500 trees/ha (the hedgerow system). The average full yield in high-density systems is around 6,000 kg/ha in rainfed orchards reaching about 10,000 kg/ha in irrigated land (normally using mechanical harvesting by trunk shakers). In the second alternative (SHD), similar yields are obtained although sooner than in the first system. However, the economic life of the SHD is shorter (around 15 years, while in the intensive system it can be more than 30 years) due to the lack of space and the competition among trees for light and ventilation inside the canopies. The data used in this study come from three alternative sources: 1) bibliographic review; 2) a questionnaire addressed to farmers; and 3) personal interviews with specialists in olive growing. These valuable information sources allowed us to gather the production costs and income from four alternative production systems: one intensive orchard (harvested with trunk shakers), two high-density orchards (harvested with Colossus and Colossus S) and one super-high-density field with a grape harvester. The economic assessment is evaluated through the Net Present Value (NPV) and the Internal Rate of Return (IRR, %), taking into account that the economic lives of the different alternatives are not the same. The results indicate that high-density economic ratios are more profitable than super-high-density ratios. However, the latter could be the most profitable option in large orchards with short-term investments, full harvest mechanization and reduced labor requirements.