European grain harvests have dropped by up to 15 percent following severe droughts and heatwaves, triggering warnings of rising meat and dairy prices across the continent, according to Landkreditt Chief Economist Christian Anton Smedshaug. The agricultural strain spans a dry belt across Central Europe that includes France, southern Germany, Switzerland, Austria, and Hungary, creating historic crop losses.
European Crop Failures and Agricultural Pressures
Persistent dry conditions have placed severe pressure on European agriculture, according to a report by researchers at World Weather Attribution. The weather anomalies have led to historic crop losses, which combined with global conflicts can drive up food prices. Smedshaug noted that while the global grain market normally acts as a buffer because grain can be sourced worldwide, infrastructure vulnerabilities pose a growing threat. “If the export shipping channels on both sides are destroyed, it could become quite severe overall,” Smedshaug told E24, referencing logistics damage in the Russia-Ukraine conflict. Russia remains the world’s largest wheat exporter, meaning localized agricultural shocks carry international weight.
Impact on Meat and Dairy Production in Europe
Livestock producers face immediate crises as feed shortages mount across the continent. According to Smedshaug, the situation is most critical for dairy and beef operations relying on forage for ruminants. Farmers are forced to contend with dwindling feed supplies, which will likely push up European dairy and storfekjøtt (beef) prices as producers reduce herds. Because beef production requires a long lead time of up to four years from the initial decision to final market delivery, these supply contractions could generate long-lasting inflationary waves.
Did you know? Beef production has a long led time of up to four years, meaning current weather shocks and forced herd reductions will impact beef supplies and consumer prices for years to come.
Norwegian Food Prices and Market Buffers
Norway has experienced a comparatively favorable growing season, with fine conditions on Østlandet, though conditions were more demanding in the west and north, according to Smedshaug. This domestic production acts as a stabilizing buffer against broader European shortages of milk and meat. However, consumer costs continue to climb domestically. Statistics Norway (SSB) reported that the “food and non-alcoholic beverages” subcategory rose 3.2 percent in July, with “food items” (underkategorien “matvarer”) registering a 3.1 percent monthly jump from June—making it the category with the highest monthly growth rate in July, driven primarily by pears, fresh fish, and canned meat.
Vegetable and Specialty Crop Devastation in France
Specialty crop producers face unprecedented losses following three massive heatwaves in France. The agricultural organization Légumes de France labeled 2026 an “annus horribilis” for vegetable production. Yield losses for crops such as lettuce, carrots, leeks, shallots, garlic, and onions have already reached thousands of tons per product. In July, the organization estimated that up to 50 percent of annual production in certain vegetable sectors could be entirely lost. Smedshaug observed that while specialty crop farmers rely heavily on water and generally prepare for dry spells, upcoming weather phenomena like El Niño are expected to exert strong effects on coffee and cocoa prices by autumn.
Inflation Outlook and Production Costs
Despite data from Virke highlighting that food price growth continues to fall due to lower cost growth in the value chain and strong competition between grocery chains, overall costs remain elevated. “It doesn’t get cheaper, it’s just that prices aren’t rising as fast as before,” Smedshaug said. He warned that uncertainty around prices for diesel and artificial fertilizers will likely keep agricultural production costs high in the time ahead, leaving little basis for lower food inflation the first year.
Frequently Asked Questions
Why are European grain harvests down this year?
Prolonged heatwaves and lack of rainfall across Central Europe—including France, southern Germany, Switzerland, Austria, and Hungary—have caused grain harvests to drop by 10 to 15 percent, according to Landkreditt Chief Economist Christian Anton Smedshaug.
How do European droughts affect meat and dairy prices?
Dry weather causes farmers to lack feed and get reduced production, leading them to potentially start slaughtering down a bit and causing prices for dairy products and beef in Europe to rise over the summer. Because beef production has a lead time of up to four years, these supply reductions create prolonged consequences.
Are Norwegian food prices affected by the European heatwave?
While Norway experienced a good year overall with fine conditions on Østlandet, domestic food prices continue to rise. Statistics Norway reported that food prices saw significant monthly growth in July, driven by items like pears, fresh fish, and canned meat, alongside rising costs for diesel and fertilizer in agriculture.
What vegetable crops have suffered the worst losses?
In France, three massive heatwaves devastated vegetable farming, putting crops like lettuce, carrots, leeks, shallots, garlic, and onions at risk, with industry groups estimating up to 50 percent production losses in certain sectors.
Stay Updated on Market Trends
Want to track how agricultural shifts impact global supply chains and consumer prices? Subscribe to our newsletter for weekly economic analysis and expert insights.
Worth a look