Extreme Weather Disrupts Global Food Production, Expect Rising Prices and Supply Chain Strain

This summer's extreme weather events have caused significant disruptions to global food production, with Europe facing severe crop stress, East Asia experiencing mixed yields, and the US benefiting from abundant rains. The consequences of this weather pattern will be felt in the coming months, with rising prices and supply chain strain expected by the fourth quarter. The increasing regularity and severity of extreme weather events have been wreaking havoc on the food and beverage industry for the past decade, spiking commodity prices and leading to vulnerabilities in the food system.

Key Takeaways:

• Europe's crops are under severe stress due to periods of extreme heat and dryness, with soil moisture levels at a 22-year low.
• East Asia's variable weather conditions will produce variable crop output, with negative issues in northern areas and favourable yields in southern zones.
• The US has endured heavy rainfall resulting in devastating floods, but also benefiting large-scale agricultural production in the central US.
• Low river levels across most of Europe have disrupted transportation of supplies and manufactured products, with concern for suppliers, manufacturers, and retailers.
• Ingredient shortages are expected to occur in the fourth quarter, driven by poor growing conditions in Europe and East Asia.
• The introduction of variable weather conditions will have a negative impact on crop yields and food security, with manufacturers facing complex sourcing challenges.
• Strategic planning, diversified sourcing, and real-time weather analytics will be key to navigating the food and beverage industry's response to climate volatility.
• Everstream Analytics' chief meteorologist, Jon Davis, notes that the US is expected to have high-yielding and large crops this year, while Europe's crops will be below normal.

Statistics:

• Soil moisture levels in Europe have reached a 22-year low.
• River levels across most of Europe have been unusually low during the spring and summer.
• East Asia's variable weather conditions resulted in 1,390 mm of rainfall in certain areas, while periods of extreme heat and drought led to crop stress in northern regions.
• Japan experienced its hottest June on record, with an average temperature of 24.1°C.
• Europe's crop stress is classified as moderate to severe.
• The US has faced devastating floods, but also benefited from heavy rainfall resulting in favourable crop development.

Sources:

• Everstream Analytics, chief meteorologist Jon Davis (multiple quotes and information)
• "Extreme summer heat puts stress on crops and livestock", September 2023 (no specific publication)
• "Weather experts warn of increased risk of crop failures", August 2023 (no specific publication)