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					                                2012 Olive Crop Overview

The 2012 table olive crop receipts for California have been recorded at 78,179.36 tons which was
83.2% of the National Agricultural Statistic Service forecast (94,000 tons) provided to the industry on
August 13, 2012. This harvest shortfall of 16.8% compared to the August forecast was largely due to
the states southern growing region which was negatively impacted by the actions of Mother Nature.
Our field experts view the current year harvest season as follows:

     The Northern olive growing areas of California realized a normal crop across all varieties
     The Southern olive growing areas of the state may have been adversely affected by the
      following factors:
                    Shorter than normal bloom period
                    Lack of pollen
                    January 2012 freeze
                    April 6, 2012 freeze
     Typically, 70% of the annual olive harvest in California originates from the Southern growing
      areas of the state
     The shortage of labor during the harvest was also a factor that reduced the olive tonnage
      harvested during the season

California growers delivered a record olive yield of 164,984.23 tons as a result of the 2010 harvest
season. Since that time fruit inventories of Pitted and Sliced Ripe olives have been in a surplus supply
position. The 2010 olive crop intake, coupled with carry out inventories from the 2009 year, created
on hand supply conditions that out stripped annual consumption by more than two-fold. As a result of
this significant inventory position Ripe olive market pricing weakened sharply over the past two
selling seasons.

Today, Ripe olive supply conditions have changed dramatically. As a result of the smaller than
anticipated statewide olive harvest this season, coupled with the re-balancing of Bell-Carter supplies
overall, our inventory imbalance has now been corrected. Therefore, Pitted and Sliced Ripe olive
market pricing will be adjusted to more appropriate selling levels. The increased pricing will impact
both the Retail and Foodservice business segments. Pricing communications to the marketplace will
commence very shortly.

The 2012 Spanish olive harvest season yielded 16.1% less raw fruit than the year prior. This was
largely due to colder than normal weather patterns during the spring bloom period, coupled with a
shortage of pollen to nurture the olive buds on the trees during this critical time. In addition, the lack
of rain along with high temperatures during the summer months had an adverse effect on the
maturity and sizing of the fruit. Due to these factors olive varieties were impacted rather severely as
compared to the Spanish harvest of 2011. A comparison of the 2012 harvest season compared to a
year ago is noted as follows:

     Manzanillo fruit receipts were down by 18.7%
     Queen fruit receipts were down by 13.3%
     Hojiblanca fruit receipts were down by 15.5%

In addition to Queen raw fruit yields being substantially reduced this season, sizing was also an issue
for this variety. It is anticipated that Queen fruit availability could be 30% lower than this recent
marketing season due to the fact that many olives did not reach optimum growth maturity prior to or
during the actual harvest season.

As a result of this 16.1% crop reduction in Spain vs. the 2011 harvest season the growers demanded a
substantial cost per ton increase for raw fruit this year. The increase in raw fruit payments to the
growers by variety is summarized as follows:

     Manzanillo fruit +17%
     Queen fruit +29%
     Hojiblanca +3%

Lastly, packaging costs (Jars, lids, labels and fiber) will reflect rising costs that will range between 2%
and 5% in Spain. Other components that will impact costs this year concerning Spanish production
include Energy, Inflation and Ocean Freight.

Due to the factors noted above we will experience higher selling prices for Spanish olives during the
2013 marketing year.

This was a very unusual olive growing season for both California and Spain this year. We will be
updating pricing and communicating changes with all of our Valued Customers over the next few

We appreciate your continued support of Bell-Carter and our excellent olive products.


Bell-Carter Foods

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