August 28, 2003, Earth Policy Institute: On
August 12 at 8:30 a.m., the U.S. Department of Agriculture
released its monthly estimate of the world grain harvest,
reporting a 32-million-ton drop from the July estimate.
When grain futures markets opened later in the morning,
prices of wheat, rice, and corn jumped.
This 32-million-ton drop, equal to half the U.S. wheat
harvest, was concentrated in Europe where record-high
temperatures have withered crops. The affected region
stretched from the United Kingdom and France in the
west through the Ukraine in the east. The searing heat
damaged crops in virtually every country in Europe.
The soaring temperatures of the past several weeks
rewrote the record book. On August 10, the temperature
in London reached 100 degrees Fahrenheit (38 degrees
Celsius)--the first triple-digit reading on record in
the United Kingdom. France had 11 consecutive days in
August with temperatures above 35 degrees Celsius (95
degrees Fahrenheit). In Italy, temperatures reached
41 degrees Celsius (105 degrees Fahrenheit).
The heat wave in Europe started in early summer when
Switzerland, situated in the heart of Europe, experienced
the hottest June since recordkeeping began 140 years
ago. In July the heat wave spread across the rest of
Crops suffered the most in Eastern Europe, which is
harvesting its smallest wheat crop in 30 years. In the
Ukraine, the wheat crop, already severely damaged by
winter kill, was reduced further by the heat, plummeting
from 21 million tons last year to 5 million tons this
year. As a result, the Ukraine, a leading wheat exporter
last year, has been forced to import wheat as bread
prices threaten to spiral out of control. Romania, which
was particularly hard hit by heat and drought, is expecting
to harvest the smallest wheat crop on record. The Czech
Republic is expecting its poorest grain harvest in 25
The prolonged heat wave, which persisted through mid
August, also reduced the German grain harvest. The German
Farmers Union reports that in southeastern Germany some
farmers may lose half of their grain crop.
This reduced estimate of the world grain harvest will
expand the world grain shortfall this year to 82 million
tons. With projected world grain consumption of 1,912
million tons exceeding production of 1,830 million tons
by 4 percent, the world is engaged in a massive drawdown
of grain stocks. (See data at http://www.earth-policy.org/Updates/Update27_data.htm.)
With this year's drawdown, world grain stocks have dropped
to the lowest level since the early 1970s. When world
grain stocks dropped to a dangerously low level in 1973,
world prices of wheat and rice doubled.