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June Heat Wave Estimated to Cost European Grain Farmers €2 Billion, Sparking Food Price Concerns
The June heat wave that swept across Europe is estimated to have cost the continent's grain growers €2 billion in lost revenue and destroyed 9 million tonnes of crops, raising concerns about the impact on food prices.
The estimate comes from Coceral, the European trade association for grains and oilseeds. The 9-million-tonne reduction means EU member states and the United Kingdom will record their lowest harvest since 2018, with the shortfall exceeding the combined annual grain production of Austria, Ireland, and the Netherlands.
Coceral noted that the hot June weather disrupted corn pollination and wheat grain-filling periods — critical stages when crops require moisture for yield development.
Tom Lancaster, a land, food, and agriculture analyst at the European Food Security Institute, said this will directly hit EU farmers' incomes while also undermining Europe's food security.
Agriculture Hit by Successive Shocks
Coceral estimates that France suffered the greatest grain losses, with corn losses estimated at 3.4 million tonnes, worth approximately €891 million. Hungary and Spain followed, with grain losses of 2.4 million tonnes and 1.4 million tonnes respectively.
And summer has only just begun. Farmers across most of the UK have reported dry conditions. The Agriculture and Horticulture Development Board (AHDB) said the UK harvest outlook remains uncertain, and many farmers have been forced to bring forward harvests due to the hot, dry weather.
Charles Hart, a senior commodities analyst at Rabobank, further noted that the EU will increase grain imports while reducing exports.
The EU requires large quantities of corn as animal feed to sustain its vast livestock industry. Although tight corn supplies may prompt some farmers to shift from corn to wheat and barley, corn import demand is still expected to rise. The U.S. Department of Agriculture (USDA) forecast this month that EU corn imports would reach their highest level in four years.
Compounding the problem, El Niño weather patterns are affecting crop production in North America and Asia. The southern and western United States are suffering from severe drought, impacting grain and meat production, while Australia's grain supplies are also beginning to tighten. Additionally, palm oil production in Indonesia and Malaysia, as well as sugar and rice production in India and Thailand, could also be affected by El Niño.
On another front, the escalation of the Russia-Ukraine conflict continues to weigh on grain exports from the Black Sea region. Meanwhile, the U.S.-Iran military standoff in the Persian Gulf has heightened the risk of rising commodity prices, with fertilizer supplies potentially becoming constrained again, thereby pushing up agricultural costs.
Source: Boyi Master
