Record rainfall has battered wheat crops in the UK and France, Europe’s largest producer, and is expected to drive up prices significantly this year.
Heavy downpours since last autumn prevented farmers from planting and damaged yields in both countries, pushing milling-wheat futures on the Euronext exchange to their highest levels in a year.
“After the UK’s record-breaking wet winter hit crops here, farmers in France are now contending with the impacts of ceaseless rains this spring,” said Tom Lancaster, land, food and farming analyst at the Energy and Climate Intelligence Unit (ECIU), a think-tank.
“France is Europe’s biggest grower of wheat, and with harvests in the UK anticipated to be down by up to a fifth due to heavy rains here that were made worse by climate change, there is a real risk that a poor harvest in France could drive up prices.”
Rainfall throughout last autumn and winter in the UK and Ireland was around 20 per cent heavier as a result of human-induced climate change, a recent study by the World Weather Attribution academic research collaboration has concluded.
This heavier rainfall had become around 10 times more likely as a result of climate change, the researchers estimated.
The problems in Europe come as farmers in other major wheat-growing regions also struggle with weather events related to climate change, from frost damage in Russia to drought in Australia, reducing global supplies.
Of all the commodities that agricultural hedge fund Farrer Capital looks at, “wheat is the one that is the tightest in terms of supply relative to demand”, said Adam Davis, CEO and founder.
“We’ve seen drought in South Africa roll into drought in Russia, to frost in Russia, to Ukraine saying some areas are the driest they’ve been in 30 years, to drought in parts of Australia,” he said. “[Climate events] are happening everywhere, seemingly at the same time or one or after the other.”
The poor weather in Russia, one of the world’s largest wheat producers, has curtailed supplies and pushed up prices on global markets recently.
Usually, a shortage in wheat from the Black Sea region would see buyers turn to the EU, said Michael Magdovitz, senior commodity analyst at Rabobank, but “the recent wet spell and lower production will leave consumers to seek wheat further afield”. For example, the US was expected to export more, he added.
The area planted with wheat in the UK is the second smallest since 1980 and 15 per cent smaller than last year, according to current estimates from the UK agriculture board, which could still be revised down before the harvest finishes in August.
UK growers have faced a “double-whammy”, which has left the country with a potentially “record-breaking area of fallow land”, said Lancaster.
First heavy rain in the autumn meant they were not able to get winter crops in the ground and then continued wet weather up until now has hindered the planting of a spring crop, which would normally compensate for a smaller winter one.
The harvest for the current crop is now forecast to be 25 per cent smaller at 10.85mn tonnes compared with last year, according to US Agriculture Department estimates.
“For bread-making wheat, the estimated drop in production is even more severe,” said Joe Brennan from the UK Flour Millers trade association. Industry forecasts indicate production could decline 35 per cent on last year, which will force millers to increase imports, he said.
Reflecting the supply shortage facing millers, the premium of UK bread-making wheat over lower-quality varieties of the grain used for animal feed is at a record high, added Brennan. In recent years, this premium has ranged from £15 to £40 per tonne, but the current forward value is around up to £80 per tonne, he said.
French wheat farmers face similar challenges. With up to 45 per cent more rain than the 10-year average between 1991-2020, according to the government’s weather service, this spring was the fourth wettest on record.
As a result, Europe’s largest grower has planted 4.3mn hectares of wheat this year, down from an average of 4.7mn hectares over five years, according to Arthur Portier, market expert at consultancy Agritel.
The planted crop will also yield less, said Portier, who is also a wheat farmer.
Rain is a vector for diseases such as septoria, which creates yellow or brown lesions on seedlings’ leaves and can slash wheat yields up to 50 per cent, he said. The wet weather had also “prevented farmers like me from going into the fields to treat the crops [with pesticides] as was needed”, Portier said.
As a result, when the wheat harvest is finished in a few weeks, France’s output will be 30mn tonnes, down from an average of 35mn tonnes over the past five years, according to Agritel’s estimates.
Consumers would have to wait to see if declining wheat harvests in France and the UK pushed up the price of bread and other wheat-based foods, said Brennan, adding that this would depend on what happened in other wheat-growing regions and how global grain markets responded.
But, he said, “fundamentally, wheat is the major input cost for a flour miller and if wheat prices rise, so too do flour prices.”
As the global long-term average temperature rises beyond the 1.1C of warming in the industrial era, the problems hitting the agricultural sector are expected to worsen.
Climate change will mean the UK can expect wetter winters as well as hotter and drier summers more frequently, according to analysis by the Met Office.
“Farmers are looking at a future where they are going to have to contend with more winters like this and the disruption that is brought more frequently,” said Lancaster. “And that’s basically climate change.”
Climate Capital
Where climate change meets business, markets and politics. Explore the FT’s coverage here.
Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here