Extreme weather threatening food supply
- Extreme weather intensifies globally
- Europe’s crops under severe stress
- East Asia faces mixed agricultural outcomes
- Low river levels disrupt EU supply chains
- Ingredient shortages expected by Q4
The increasing regularity and severity of extreme weather events has caused chaos across food and beverage for the past decade.
Flooding, drought, and extreme high temperatures have wreaked havoc on supply chains, spiked commodity prices across all sectors, and led to vulnerabilities in the food system.
What’s more, the speed at which the problem is escalating is now rising. And not just on a year-by-year basis, but now month-by-month.
“This summer has featured a wide range of weather extremes,” says to Jon Davis, chief meteorologist at supply chain risk management firm Everstream Analytics. “Devastating floods in the US, periods of extreme heat and drought in Europe, and variable weather in East Asia.”
This weather has caused a wide range of impacts in the agricultural sector, resulting in devastating effects on the biggest agricultural producers in the Northern Hemisphere – Europe, the US, and East Asia – also known as the big three.
Europe
Europe has been singled out as the “problem zone” this summer. Periods of extreme heat and dryness during spring and summer have placed major stress on crops across the continent. As a result, crop stress in the region has been classified as moderate to severe. Added to this, soil moisture essential for feeding crops, hit a 22-year low.
And while increased rains over the past few weeks, combined with cooler temperatures, have allowed soil moisture levels to increase, they remain at the fourth lowest level on record.
“This recent period of wetter and cooler weather during the second half of July has reduced crop stress and in many areas was enough to avoid a crop disaster,” says Everstream Analytics’ Davis. “Crop production will be below normal in most areas but had the extreme heat and dryness continued during the back half of July, many areas would have plummeted into disaster mode.”
Heat across Europe has also compounded the issue, with temperatures reaching well above normal. This widespread heat puts stress on crops and livestock, though the impact of this heat is affecting food and beverage beyond crop success.
“Water resources have been impacted in a variety of ways,” says Everstream Analytics’ Davis. “River levels across most of Europe have been unusually low during the spring and summer.”
This has resulted in disruption to the transportation of supplies and manufactured products. But again, the recent rains have helped to relive the situation.
“Typically, the period when river transportation tends to be most impacted by low water levels on the Rhine and other rivers across Europe is autumn,” says Davis. “This coincides with the movement of harvest crops and other commodities along this key transportation corridor.”
The occurrence of low water levels earlier in the year will be cause for concern to suppliers, manufacturers, and retailers.
United States
In contrast to heat- and drought-hit Europe, the US has endured heavy rainfall resulting in devastating floods, with states across the country affected. However, though catastrophic, they have been isolated to certain high-risk areas.
And, the high levels of rainfall have actually been good news for large scale agricultural production in the central US, as its supported crop development.
This is especially true in the Midwest corn and soybean belt – one of the most concentrated and highest producing agricultural regions in the world.
“Soil moisture reserves this summer have been abundant,” says Everstream Analytics’ Davis. “The crops have ‘tapped’ into this moisture base and the result has been very favourable yield prospects.”
Abundant rains, says Davis, are highly favourable for overall crop development in the middle of summer. This, of course, is not the case in spring (planting delays) or autumn (harvest delays).
Looking ahead, there are no signs of any yield-threatening weather in the major summer agricultural crop belts in the ‘nation’s breadbasket’.
“The primary summer crops in the US (corn, soybeans) are going to be high yielding and big this year,” says Davis.
East Asia
Unlike the US, where crop prospects are very good, and Europe where crop prospects are mostly poor, the situation in East Asia is said to be variable.
Much of the more southern agricultural belts (southern China, Southeast Asia Peninsula, and India) have received abundant rains with moderate temperatures, meaning that crop prospects in those areas are generally good.
The news is unfortunately less positive further north, with northern China, the Koreas, and Japan experiencing periods of extreme heat and drought, resulting in areas of crop stress and poor yield potential. In fact, Japan had its hottest June on record, when averaged out across the country.
“The variable weather conditions this summer will produce variable crop output in East Asia,” says Everstream Analytics’ Davis. “In other words, the result will be very crop specific. Crops in the more northern areas will likely have negative issues while crops in the southern zones will generally have favourable yields.”
What does this mean for manufacturers?
The outcome of poor growing conditions across Europe and East Asia is clear – ingredients supplies will be reduced, pushing up prices and placing food security in jeopardy. However, the impact of the extreme summer weather won’t be felt for some time.
“Crops that are being impacted in Europe are the summer crops, which are planted in the spring and harvested in the autumn,” says Everstream Analytics’ Davis. “The crops are still developing and will not be infused into the food supply chain until after the harvest – autumn and winter of this year.”
As climate volatility intensifies, the food and beverage industry must prepare for deeper disruptions.
With Europe’s crop yields under pressure, East Asia’s output uneven, and the US offering a rare bright spot, manufacturers and suppliers face a complex landscape.
Strategic planning, diversified sourcing, and real-time weather analytics will be key to navigating the months ahead, and safeguarding food security.
