Europe’s drought pushes meat & milk prices higher
Drought starving European farms will push prices of meat, milk and cheese even higher, putting pressure on consumers as everything else in grocery stores becomes more expensive. Heat is drying up pastures and reducing crops for cattle.
British cattle and sheep farmers make use of winter feed stocks in the middle of summer. French cornfields are in their worst condition in a decade and are wilting elsewhere, exacerbating imminent fodder shortages.
Extreme weather exacerbates difficulties already facing farmers in the European Union, the largest exporter of pork and cheese.
Rising grain & energy costs
Ranchers are struggling with rising grain and energy costs, labor shortages and disease outbreaks. Herds shrunk as a result, and EU meat prices were up about 12% year-on-year in his June. This is the largest rise ever. Alexander Anton, Executive Director of the European Dairy Association, said: “Expect the value of milk to increase.” Much of England has just been declared a drought, and France is in the worst situation on record.
Other European agricultural powerhouses, such as Romania, Italy and Germany, are suffering from declining rainfall and extreme heat, drying up rivers essential for transportation and irrigation. Food prices rose 11% in the EU and nearly 10% year-on-year in the UK in June, their biggest gains in more than a decade.
The cost of other essential household items such as energy is also rising steadily. In the south of England, grasslands are ‘totally dry’ and farmers are unable to sow cover crops to cover their fields in winter because the seeds do not germinate, says Phil Stocker, executive director of the National Sheep Association.
Cattle were eating hay and silage and this would not normally be expected until late October, said Richard Findlay, chairman of the National Farmers’ Cooperative Livestock Committee. This means farmers may have to buy more at higher prices in winter.
Dairy farmers are in a similar predicament, and drought-related changes in cattle feed could reduce cattle productivity, Anton said. Cows produce less milk in hot weather. “All animals should graze outdoors at this time of year. This is the cheapest form of fodder,” said Findlay. “It’s not, so it’s certainly an extra cost.”
Corn is performing poorly across much of the continent, with analyst Strategie Grains forecasting his EU harvest, the lowest since 2007. increase.
Grain is a staple food for livestock and is in short supply from Ukraine, so the EU typically buys within a few years of better supplies, but is left in turmoil by Russian aggression. Some of Ukraine’s maize shipments are again moving by sea, but Europe has also booked shipments from further afield.
Italy bought 105,000 tons from the US for her 2022-23 season. This is the largest purchase in at least 20 years.
Follow us on LinkedIn, Twitter & Facebook.
Related article: UK consumers are buying 9.4% less meat
UK consumer struggles with inflation As a cost-of-living squeeze on household incomes looks set to worsen in the United Kingdom, here are how consumers are adapting to the rising prices of everything from food to energy. Nine out of 10 Britons say they are increasingly…
Source: Bloomberg
