Cobram Estate olive output surges 12pc above prior off-year as grove expansion lifts capacity

Olive oil producer Cobram Estate Olives (ASX: CBO) has reported its 2026 Australian harvest will produce 11.3 million litres of olive oil, a result that despite being down on the prior on-year crop signals a structural lift in the company's underlying productive capacity.

The 2026 harvest is an off-year in the natural biennial bearing cycle, yet total production from the company's own groves and third-party contract-processed fruit came in 11.9 per cent higher than the previous off-year harvest in 2024, which yielded 10.1 million litres.

The result compares with 14.2 million litres produced in the 2025 on-year crop.

Cobram Estate expects its two-year rolling average production from Australian owned groves to exceed 20 million litres at full maturity, and has forecast the 2027 on-year crop will be substantially higher than 2026 and exceed the 2025 on-year result.

The company attributes the gains to increasing grove maturity and density across its Australian plantations, which now span 6,500 hectares.

The production uplift has been partially offset by lower oil content in the 2026 fruit, which came in 13.9 per cent below the long-term average, but Cobram Estate notes this has been driven by seasonal conditions during the growing period.

"Olive oil quality is consistent with the company’s expectations, and the company will have sufficient supply to meet the requirements of its packaged goods sales plan through to the 2027 harvest," says Cobram Estate.

However, Cobram Estate says Australian water costs remain well above long-term average prices.

"Despite promising early rainfall in key catchment areas, the Bureau of Meteorology has confirmed that Australia is now in an El Niño phase, which typically increases the likelihood of drier winter and spring conditions across parts of southern and eastern Australia this year," says the company.

"This may result in lower rainfall and higher water costs throughout the next growing season."

The harvest update lands as Cobram Estate beds down its largest strategic move to date - the completed acquisition of California Olive Ranch (COR) for US$173.5 million ($249 million).

The deal has more than doubled Cobram's California grove footprint to 3,292 hectares and has brought the iconic California Olive Ranch brand into its portfolio alongside its existing Cobram Estate US label.

Cobram Estate expects the COR acquisition to deliver US$12 million in initial annualised synergies, rising to US$20 million by FY30, driven by operational efficiencies across milling, bottling and supply chain consolidation.

But the deal is not without complications as Cobram Estate has disclosed today that the COR earn-out payment is likely not payable, with the acquired business not meeting the required EBITDA threshold.

A US$31.9 million purchase price dispute with the COR sellers also remains unresolved.

Cobram Estate's production surge comes against a backdrop of global olive oil supply disruption that has driven prices to historic highs.

Drought conditions across southern Europe, particularly Spain which accounts for half of global production, have constrained supply for consecutive seasons.