Will extreme weather leave the Out of Home sector high and dry?

A record breaking dry spell poses a threat to both food production and pricing at a time when the foodservice industry is suffering the effects of Covid-19, writes Nick Hughes.

Bad news comes in threes, or so the saying goes. For UK farmers battling disruption from the coronavirus pandemic, the news that May 2020 was the driest on record was the latest in a trio of woes they have been forced to suffer so far this calendar year.

Only four months ago (albeit it feels like a lifetime) storms Ciara and Dennis were battering Britain, leading to extreme localised flooding and damage to farmland. This February was officially the wettest on record; the winter in its entirety was the fifth wettest ever recorded.

Extreme weather events, made fiercer and more frequent by climate change, present risks to food production at the best of times. In the midst of a global pandemic, however, the threat of severe disruption to supplies is magnified. As foodservice operators inch towards a gradual reopening of their businesses, a spike in the cost of raw ingredients would heap yet more misery on a sector already on its knees. Yet this is the reality facing businesses if the heavens don’t open soon.

We’ve been here before, of course. In 2018 a prolonged period of drought and extreme heat resulted in a significant drop in yields of staple crops like potatoes, carrots and onions, and a consequent increase in prices.

The impact this year is shaping up to be even more severe. The Met Office described as “remarkable” the extent to which May and spring records for climate statistics have been exceeded this year. Some 626 hours of bright sunshine were recorded in spring 2020 for the UK, smashing the previous high of 555 hours set in 1948 by more than 70 hours. Perhaps most staggering of all, only three summers – 1976, 1995 and 1989 – have exceeded the total amount of sunshine for the months of March, April and May, a period when farmers can usually rely on at least a few heavy showers.

It’s little surprise that farmers’ representatives are sounding the alarm. The National Farmers’ Union (NFU) recently warned of the effect on cereal crops of the baking spring weather, domestic supplies of which were already under pressure following the wet winter that negatively impacted yields and the quality of domestic wheat, barley and oil seed rape.

Vegetable growers, who were badly impacted by the 2018 drought, are also facing difficult water-scheduling choices, according to the NFU, which has further warned that pig and poultry farms face potential bedding shortages from reduced availability of both straw and wood shavings (due to Covid-19-related factory closures).

Dairy farmers, meanwhile, are likely to feel the strain of a possible lack of rain-fed grass, which in 2018 forced farmers into buying in feed or start using silage set aside for winter use.

In one respect, the wet winter has given farmers some breathing space as they battle drought conditions. Reservoirs were filled in March, meaning crops, such as soft fruits, that rely on irrigation have largely been unaffected (not withstanding ongoing labour issues) by the shortage of rain. As things stand, there is generally good water availability from both groundwater and surface water sources, according to NFU deputy president Stuart Roberts. But with some farmers already turning to irrigation, water availability is set to become a pressing issue should significant rainfall not materialise in June.

What does all this mean for businesses at the consumer end of the supply chain? Towards the beginning of the year prices across the foodservice sector were relatively low. The latest edition of the CGA Prestige Foodservice Price Index showed that foodservice pricing reached its lowest point for 12 months in February 2020 with the majority of categories showing no or minimal year-on-year inflation. However, CGA client director food and retail Fiona Speakman noted that the Covid-19 pandemic had “shattered” any signs of stability. “With the out-of-home eating and drinking sectors in lockdown in many countries, and availability and distribution facing major disruption, we are likely to see a great deal of inflationary volatility in the months ahead,” Speakman warned.

The bigger picture is that farmers, and by extension foodservice operators and consumers, face living with this kind of volatility for the foreseeable future regardless of the longevity of the disruption from Covid-19. In its special report on climate change and land published last year, the Intergovernmental Panel on Climate Change (IPCC) wrote that future stability of food supply is projected to decrease as the magnitude and frequency of extreme weather events increases. This is true under all emissions scenarios, even those aligned with the Paris Agreement to keep global temperature rises to 1.5 degrees.

The good news is that the public seem to get it. Asked what issue was looming largest for the world as part of Sky News' After The Pandemic series, climate change took a clear lead with 33% of the vote.

If and when the threat from the coronavirus pandemic recedes, the climate alarm will still be sounding loud and clear. That spells bad news for all of us.

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