Extreme weather events in Europe rise 48 percent - increasing risk of food supply disruptions

May 20, 2024 - The number of extreme weather events in Europe (including the UK) has increased by 48 percent to 16,956 in 2023/24 (year-end February 6), up from 11,442 in 2021/22, adding to the volatility of food prices says supply chain experts INVERTO, part of Boston Consulting Group.

Extreme weather events in Europe rise 48% to nearly 17,000 for 2021/22 – 2023/24 period

The jump in extreme weather reports confirms the trend of increasing extreme weather events in Europe, with the number of large hailstorms alone increasing 72 percent in the past two years, from 4277 in 2021/22, to 7343 in 2023/24.

Extreme weather events can impact the production of food crops both in Europe and globally, leading to a shortage of products on shelves for consumers - and costly price spikes. For example, one hailstorm last year caused €40 million of damage to crops in the Valencia region of Spain.

Extreme weather is severely impacting European food production

European food output that has been impacted by recent extreme weather events include:

• Olive oil: dry summers in the Mediterranean in 2022 and 2023 damaged crop yields and pushed prices to their highest on record. Prices exceeded €7 per kg in 2023, up from €4 per kg in September 2022, due to soaring temperatures in the Mediterranean. This - combined with a severe lack of rainfall - is placing significant strain on olive oil production.
• Rice: Italy, which cultivates 50 percent of the rice produced in the EU, experienced a climate-induced shortfall in 2023, following years of successive droughts and a flood last year, which strained the country's agricultural areas.
• Potatoes: heavy rain in Northern Europe in autumn 2023 severely damaged potato fields in Belgium, France, and the UK, creating shortages and pushing up prices. Prices for Maris Piper potatoes soared 158 percent in the year to December 2023, reaching £465 per metric tonne.
• Tomatoes: Persistent heatwaves in 2023 have resulted in lower yields in key producing regions such as Spain, Italy and Greece. In 2023, the value of tomatoes jumped to US$136 per metric tonne, up 40 percent on the previous year's record of US$97. This is 60 percent higher than the overall average price for the previous three years (2020-2022).
• Maize: The European Commission reports that production of maize - an essential cereal crop - fell 27 percent from 73 million tonnes in 2021 to 53 million tonnes in 2022. In 2023/24, maize production is projected to be 13 percent below the previous five-year average.
• Cocoa: Cocoa is now more expensive than copper as dry weather conditions hit the world's largest cocoa producers in West Africa, including Ghana and Ivory Coast. Higher prices and lower ability are reducing output for chocolate manufacturers - a trend that could worsen if the earth continues to warm up.

What businesses must do to mitigate the growing risks posed by extreme weather

Katharina Erfort, Principal at INVERTO, says: "As extreme weather events increase in frequency and intensity, there will be more disruption to food supply chains. It is therefore essential that businesses learn lessons from recent events and install robust measures to prepare for future disruptions."

"Businesses should invest in strong risk identification and management tools to identify where food supplies are originating from how they might be impacted by future extreme weather events."

"Buyers should also look to diversify their supply base across different regions, especially those with less correlated weather."

INVERTO says that inertia among businesses on this issue could result in continued future volatility in food supplies and price increases for consumers.

"As global weather patterns become less predictable, growers need to explore how they can mitigate the impact of weather events on their crops." adds Katharina Erfort.

"For example, if growers know due to good forecasting that there is a hailstorm, can they harvest in advance? Or are there materials/methods they can deploy to protect their crops? In such an event, growers can install hail resistant nets, or deploy poly tunnels in advance to protect their crops from the worst effects of extreme weather."

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The Global Miller
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