Heat And Drought To Push Food Prices Higher Amid ‘Worst Crisis In Decades’

Extreme heat and prolonged drought across the UK and mainland Europe are raising fresh concerns over the availability and cost of fruit and vegetables, with the effects potentially extending into 2027.

The Food and Drink Federation (FDF) claims price rises are “inevitable” as increasingly volatile weather disrupts agricultural production and puts pressure on supplies of key commodities. 

Almost three-quarters of England (71.3%) is now in drought as conditions worsen following a dry start to August, according to the National Drought Group. 

The UK faces its “worst food security crisis in decades” on the back of repeated heatwaves and extreme temperatures, warn analysts from the investment bank Shore Capital. 

Speaking to The Telegraph, Shore Capital’s Akhil Patel and Clive Black said the recent extreme weather could devastate domestic food supplies and translate into higher prices for consumers.

Price rises are “inevitable”, claims David Thomson of FDF Scotland, who told the BBC there are “significant concerns” over the availability of a broad range of fruits and vegetables. 

Some UK-grown crops are already experiencing shortages, particularly cereals and vegetables.

Fresh produce including broccoli, carrots, peas, lettuce, potatoes, tomatoes and cherries, are reportedly facing yield and sizing difficulties, with the Brassica Growers Association warning of a ‘brassica emergency’.

The hot and dry conditions across mainland Europe are also threatening production of crops and agricultural inputs imported by British retailers and manufacturers. 

“Not only is the UK experiencing one of its hottest and driest summers on record, but across most of Europe heatwaves and severe droughts are impacting fruit, vegetable and grain supply,” explained Dr Liliana Danila, chief economist at the FDF.

“Competition for fewer resources will in turn push up the price of ingredients for manufacturers,” she warned.

While UK food and drink businesses have absorbed additional costs where possible, Dr Danila said they are facing increasing difficulty in doing so, meaning higher prices could persist for longer.

“The UK’s food and drink manufacturers work hard to absorb costs where they can, but are already grappling with rising costs as a result of war in Ukraine and in Iran, so we expect the additional upward pressure of reduced crops will be reflected in retail prices into next year.” 

Food inflation in the UK could reach 5% in the next few months, an increase from 1.7%, according to Shore Capital.

Growing Concern For Food Producers

Farmers have reported their earliest harvests in 20 years, with reduced yields. Irrigation restrictions on farmers are now increasing, according to the National Drought Group.

“With no meaningful rain forecast in the coming weeks, the situation facing farmers and growers is increasingly concerning,” explained NFU Deputy President Paul Tompkins. 

“Many farmers have completed the earliest harvest on record, with poor yields in key crops reported in some areas of the country,” Tompkins added.

“Livestock and dairy farmers are already using winter feed because grass has stopped growing, while growers are working hard to keep fruit and vegetables watered, but many are struggling to access the water they need.”

The National Drought Group has warned that all regions of the country are experiencing pressure on their water resources, leading to increasing impacts across agriculture, public supplies, navigation, and the environment. 

The East Midlands, Lincolnshire & Northamptonshire, Kent & East Sussex, and Solent & the South Downs are the latest regions to move into drought status as of this week.

Natwest has reportedly expanded its financial support for its UK farming customers struggling with drought; offering emergency overdrafts, rate cuts, and loans repayment holidays, among other measures. 

The Prime Minister, meanwhile, chaired an emergency meeting yesterday (12 August) to discuss the UK’s heatwaves, drought, and wildfires.