Rising Food Prices: Impact of Climate Crisis on Agricultural Produce

To buy olive oil or not to buy? That may be the question in the coming months, when the liter reaches 10 euros, an unprecedented barrier on the supermarket shelves, where the virgin olive oil is already seen at 9.90.

But it is not only oil, but also mushrooms or meat, plus some seasonal vegetables (beans or chard) are among the foods that become more expensive due to the impact of the climate crisis (drought and heat waves) on crops, according to warn in agricultural cooperatives.

“The crops that are suffering the most now are those that are being developed or beginning to be harvested, the vineyard and, above all, the olive grove,” they explain in the Union of Small Farmers (UPA).

“But also extensive livestock farming could have to transfer the lack of pasture and the losses from the purchase of feed to the price,” they warn.

Other products, however, despite their poor harvest, will not see high prices because they are set by the global market. This is the case of cereal, which in Spain has had the worst harvest in three decades, or almonds, which is on its way to losing 30% of its expected production.

Oil, at 10 euros?

The price of oil is the most striking of the rise in food. It has reached record levels, an average of 9.4 euros per liter, the highest since there are records.

The so-called ‘liquid gold’ has become more expensive by 5% between June and July and accumulates a rise of 38.8% in the last year, according to the Consumer Price Index (CPI).

The cause behind this rise in prices is the accumulation of a bad past harvest and the dismal prospects for the autumn.

The producers attribute it to the “climate crisis”, the lack of rain and the high temperatures that seriously affected the flowering season in almost the entire Spanish olive-growing area. The sector expects to obtain 660,000 tons, half of an average campaign.

With two consecutive production campaigns below 50%, the sector believes it necessary for the Ministry of Agriculture and the Autonomous Communities to establish support measures for farmers and cooperatives.

At the consumer level, the sector has calculated that national consumption has fallen this year in Spain by more than 50% in the first semester, due to the sustained rise in prices. This behavior is what worries them the most.

According to Javier Fatás, from COAG, “We are in very significant drops in consumption, of a product for daily use and it is no longer just for the economy of farmers, but for the future of a star product of the Mediterranean diet and the healthy food”.

Fatás believes that recovering lost consumption habits is not easy, and at the same time asks to investigate any hint of speculation at the expense of the climate crisis.

“Because we see specific prices above 7 euros per liter of oil and offers in other places at four euros per liter.”

The “bad harvest” of the almond

COAG has also recently shown its concern about the “bad harvest” that is being recorded in almonds after the start of the harvest in the main production areas, with decreases of between 30% and 50% compared to the figures initially forecast.

The yields that are being obtained in kilograms per tree are “low or very low”, something that adds to problems with the size of the almonds.

“This is due to the negative impact of the different adverse weather episodes and, especially, the long period of drought suffered by the main producing areas”.

However, they do not predict a rise in almond prices, because it is the global market that sets the prices of nuts, and right now they are falling.

The same is happening with the damaged beet or cotton crops in the Guadalquivir area, which their producers find that they cannot reflect the drop in production in global prices.

No mushroom due to lack of straw

The drought has also caused an increase of almost 300% in the price of straw used for compost in mushroom production, which threatens the cultivation of this product, reports EFEagro.

In Spain some 130 million tons are produced per year, half in La Rioja and the other in Castilla La Mancha, which is dedicated to 75% fresh cultivation and 25% preserves, while in the La Rioja community it is al reverse.

Other products that are more expensive this summer due to the drought are green beans, chard or borage.

“With excessive heat, it does not produce well”, they explain in COAG, where, however, they assure that other widely consumed vegetables, such as cucumber or zucchini, are at reasonable prices.

Cereal, the worst harvest in 30 years

“A disaster”, this is how COAG describes the 2023 summer cereal harvest, about to end the campaign, with the last combine harvesters plowing through the wettest Spain.

In estimated figures, the agri-food cooperatives say that ten million tons of cereal will be collected in Spain, the worst figure in thirty years and 42.36% less than the previous year’s campaign. The annual average is 18.2 million tons.

However, according to COAG, these reduced harvests will not lead to the rise in prices, marked by the world campaign. What is to be expected is that prices remain the same, or are at risk of future fluctuations that may occur due to Ukraine and speculation.

Control speculation

Farmers, however, ask that in these critical situations for the primary sector, vigilance on price speculation (PDF) in the food chain be increased.

The most recent report, for example, from July, highlights that plums raised their price at destination by 558% compared to origin (0.42 to 6.58 euros). Or table olives rose 532% (0.91 to 6.32) and bananas, 411% (0.44 to 5.11).

The Union of Small Farmers and Ranchers (UPA) of Malaga, for its part, has quantified 85% less mango production and 60% less avocado production due to lack of irrigation.

“We are tired of denouncing the derisory prices that we charge for these products that have gone from being stars to starry.

It is true that, at the beginning of August, they paid well for mangos, around two euros, but as September approaches we already have the average between 1.40 and 1.50 euros. And next month the price will continue to drop.

On the other hand, on the shelf you find mangoes at prices that are almost four times what they pay us farmers,” they criticize.