Europe Farmers Slow Production Due to the Energy Crunch


  • Europe faces a potential energy shortage this winter as Russia slows its natural-gas supply.
  • The surge in natural-gas prices is hitting farms that rely on energy to produce food.
  • A top Swedish tomato producer is halting winter plantings and Dutch greenhouses are scaling down.

Some farmers in Europe are winding down production this winter due to high energy prices, further threatening the global food supply that is already in a crisis.

Europe faces a potential energy shortage this winter as countries in the region are highly dependent on Russia for natural gas. However, Russia has shut down a significant pipeline to Europe, citing technical issues due to sanctions over the invasion of Ukraine, and the EU is planning a full Russian oil ban this winter. This has caused a massive surge in natural-gas prices that were already on the rise even before the war due to rebounding demand as pandemic restrictions eased.

As energy is required throughout the food production process, farmers and food producers are feeling the pinch from red-hot prices with some halting or slowing output in the colder months ahead.

Nordic Greens Trelleborg, a top Swedish tomato producer, said it will not be planting a winter crop this year because it would be running at a loss given current electricity prices, Swedish newspaper Afton Bladet reported on Sunday. That’s because Nordic Greens had already locked in tomato prices earlier in the year when electricity prices were lower, explained the company’s site manager Mindaugas Krasauskas. It’s the first time the company is suspending production.

EU farmer union Copa-Cogeca told the Financial Times that the dairy and bakery sectors are the most impacted by the surge in fuel prices because processes for pasteurization and milk powder production consume a lot of energy. This, in turn, has pushed up butter and milk powder prices, which were up 80% and 55% respectively at the end of August from a year ago, according to the European Commission.

Meanwhile, some greenhouses — which regulate temperatures for off-season growing — in the Netherlands are switching off or reducing production areas this winter due to expensive fuel prices, Reuters reported on Wednesday. The Netherlands is the world’s second-largest agricultural exporter after the US, so a reduction in farm output would hit shipments of fruits, vegetables, and flowers.

With man-made farming solutions slowing due to the energy crisis, the industry could be going back in time this year.

“It’s like we will go back in history again with Spain producing in wintertime and the northern European countries producing their own vegetables in summertime,” Rabobank analyst Cindy van Rijswick told Reuters. “Some people say maybe that’s the way it should be.”


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