Some European farmers have halted production this winter due to high energy prices, further threatening an already troubled global food supply.

Europe faces a potential energy shortage this winter as countries in the region rely heavily on Russia for natural gas. But Russia has closed a major pipeline to Europe, citing technical problems with sanctions for Ukraine’s aggression, and the EU plans to completely ban Russian oil this winter. increase. This led to a significant increase in the price of natural gas, which had already risen since pre-war as demand rebounded as pandemic restrictions were eased.

With energy required throughout the food production process, farmers and food producers are feeling the latest price pinch as production stalls or slows during the upcoming colder months. Nordic Greens Trelleborg, Sweden’s main tomato grower, said it would not plant winter crops this year because it would be in the red given current electricity prices, Swedish newspaper Afton Bladet reported on Sunday. This is because Nordic Greens set the price of tomatoes at the beginning of the year when electricity prices were low, explained Mindaugas Krasauskas, his manager at the company’s site. It is the first time the company has stopped production.

The EU farmers union Copa-Cogeca told the Financial Times that the dairy and bakery sectors were hit hardest by higher fuel prices because the pasteurization and milk powder production processes are energy intensive. According to the European Commission, this has pushed up prices for butter and milk powder, which were up 80% and 55% year-on-year at the end of August, respectively.

Meanwhile, some Dutch greenhouses that adjust temperatures for off-season cultivation have closed or reduced production areas this winter due to high fuel prices, Reuters reported Wednesday. The Netherlands is the world’s second largest agricultural exporter after the United States, so any decline in agricultural production will affect the supply of fruits, vegetables and flowers.

The industry could become obsolete this year as artificial farming solutions slow down due to the energy crisis.

“It’s like going back in history when Spain grows its own vegetables in the winter and the Nordic countries in the summer,” Rabobank analyst Cindy van Reiswick told Reuters. “Some say it might be.”

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Source: Business Insider