Almost all of Europe suffering from drought

Countries such as Poland, Romania, the Czech Republic and Moldova can now record the third dry year in a row. This started after a soaking wet spring in 2018, after which it simply stopped raining properly. Last winter passed without much frost and snow, meaning that crucial moisture reserves were not replenished. This accumulation is now causing victims. The first 3 months of 2020 were the warmest in 100 years in Europe.

Poland hit hard
The Polish archbishop has called for prayers for rain everywhere in the country. So far without much effect. It has not rained so little in March in 30 years and April is also very dry. The winter in Poland was extremely mild and also dry. There was precipitation in January and February, but not enough. Many Polish farmers are being hit hard by persistent drought, which is huge effect has on their income. Drought is particularly widespread in the south-west of the country. The government has announced that it will accelerate measures, such as subsidies for installing irrigation. However, farmers do not see this as a structural solution, because the amounts are simply too low.

Just like in the south of Russia, it also remains dry in Ukraine. A situation that already arose last autumn. This has an effect on spring crops, for example, a third of which are now in the ground under extremely dry conditions. Market analysts expect that the country will not match its record grain harvest of 75 million tons – achieved last year – this year. Now expectations are 65 to 67 million tons, but this could be further reduced to 60 million tons if the situation persists. Water supplies in the country are at their lowest level in 6 years.

Restriction of grain exports
Ukraine is seeing a run on its wheat supplies, exports of which increased 50% through mid-April. Flour mills and bakeries have called on the government to curb exports to prevent food price increases. The coronavirus in particular - and the resulting hoarding behavior in grains - has caused this situation. Romania has already stopped the export of grains to non-EU destinations.

Farmers are also dealing with drought closer to home. For example in Germany, where according to the German weather service it has rained only 10 millimeters in many regions since mid-March. Normal for this time of year is 50 millimeters. The long-term forecast, until early June, expects little relief for entrepreneurs. Joachim Rukwied, chairman of the Deutschen Bauernverbandes (DBV), is concerned.

According to him, a third dry year in a row will be disastrous for many entrepreneurs, who will be hit even harder than in 2018 and 2019. The situation did not go unnoticed by Agriculture Minister Julia Klöckner. In a video message she announced that she would support agricultural entrepreneurs when necessary. No measures are being taken at this time. In 2018, the government paid out €228 million in drought support.

Flanders very dry
The situation is similar with our southern neighbors. Since April 1, barely 5 millimeters of rain has fallen in Belgium and that can be called historic. Cumulative precipitation has shown little increase since mid-March. Groundwater reserves have been well replenished due to the wet January and February, but the Belgian weather service has already put 2020 on the list of drought years. It is very dry, especially in Flanders.

In France the situation is not much different. In the north of France, farmers speak of a catastrophic situation. This not only has consequences for sowing and planting potatoes, beets and corn, for example, but also for grain crops. After a wet winter, the grains have still not developed properly. In 9 years, wheat and barley were not doing so badly, according to data from the Ministry of Agriculture. It has not been this dry in the spring in 5 years. Further south in the country, but also in Spain and Italy, it is wet or even above average wet.

Consequences for product prices
As Europe's largest grain producer, the conditions in France are significant. It is an important ingredient for grain prices. This slowed down a bit at the end of last week. The Matif fell slightly below €200 and closed at €24 per ton on Friday, April 197,75. The corn price did rise to €166,25 per tonne. If drought persists in the EU and Black Sea region, this could result in export restrictions and a stable to increasing grain market.

This also applies to the potato futures market. The April 2021 contract also had to yield to corona pressure, but is still worth above €11 per 100 kilos. However, last week the price did drop, from €12,60 to €11,40 per 100 kilos. That is still 20 cents above this season's low. However, the drought in Northwestern Europe is putting something of a damper on the market. Past experience shows that a dry planting season usually has little effect on the final yield.