Looking out over his parched fields south of Berlin, dairy and grains farmer Thomas Gaebert is wishing for rains to save his crops after relentless hot weather.
He’s one of many farmers battling for survival after a heatwave and drought swept across northern parts of the continent, damaging crops from wheat to barley. Many German growers could go bankrupt if they suffer another crop failure, and too much rain in France is set to reduce output there. All combined, it’s shaping up to be the bloc’s smallest grains harvest in six years.
“It looks like a desert out there,” Gaebert said of his farm in Trebbin. His colleagues, who have been farming for 40 years, say they’ve never seen anything like this.
Gaebert stands to lose a third of his usual wheat harvest and more than half his rapeseed output after heat and a lack of rain withered plants. He’s worried he won’t have enough of his own grain to feed his 2,500 cows, nor is he insured against the potential losses from the hot weather.
The situation is so bad in Germany -- temperatures exceeded 30 degrees Celsius (86 Fahrenheit) for much of May and June -- that many farmers are destroying crops rather than attempting to harvest them, said Joachim Rukwied, president of farmers’ association DBV. Crop failures in the EU’s No. 2 grains grower, on top of last year’s poor harvest, could bankrupt many growers, German agricultural cooperatives group DRV warned last week.
“Several of our members urgently need help from the government,” said Henning Ehlers, the head of the DRV.
Those lucky enough to collect a decent harvest could benefit from higher prices. Wheat traded in Paris has rallied 17 percent this year, heading for the first annual gain since 2012, also helped by concerns about crops from Russia to North America. With world output set to drop for the first time in six years, that’s eroding a glut which sent Chicago prices tumbling almost 60 percent from a 2012 peak.
Here’s how crops are being affected across the EU:
Baked Britain and Poland
The U.K.’s hottest summer in four decades hurt wheat crops more than normal because a wet and late winter hindered root development, leaving plants more vulnerable to damage from summer dryness. In Poland, more than 66,000 farms spanning 1.2 million hectares (3 million acres) have been hit by drought, the Agriculture Ministry said.
“The crop losses will be quite substantial,” said Wojtek Sabaranski, a Warsaw-based analyst at Sparks Polska. Northwestern parts of the country have been affected most, he said.
East of Poland, the damage to agriculture has prompted Lithuania and Latvia to declare a national natural disaster or state of emergency.
The past few days have brought some rains to the Baltics and Poland. Some showers will fall across northern Europe this week, but they’ll be fairly light and probably won’t ease dryness enough, said Kyle Tapley, a senior agricultural meteorologist at Radiant Solutions.
It’s wheat output in France, the EU’s top grower, that’s come as the biggest surprise. While warm and wet weather initially sparked calls for the best harvest in years, that soon changed. Too much rain and not enough sun resulted in wheat with fewer grains, and will mean lower yields, according to Strategie Grains.
“The situation is not as brilliant as we had imagined,” said Gabriel Omnes, an analyst at the French consultant. The company slashed its outlook for the country’s wheat crop by 4.6 million metric tons in the past month.
Back in Germany, Gaebert still doesn’t know how he’ll feed his cattle and his fields have become so dusty that it’ll be a challenge to sow seeds for next year’s harvest. In the past few weeks, Germany was forced to import feed wheat from as far away as Romania, said Hendrik Manzke, a broker at Amme & Mueller GmbH.
“I hope the rain comes soon,” Gaebert said. “It’s a real threat to our business.”
Copyright 2018, Bloomberg