Germany Faces Worst Harvest in 24 Years After Extreme Drought

(Bloomberg) -- Germany is likely to harvest its smallest crop in 24 years, meaning that local supply will fall short of demand.

The European Union’s second-largest grower will produce 36.3 million metric tons of grains this year, 20 percent less than a year ago and the least since 1994, according to German farm cooperative association DRV. Production of wheat, Germany’s main crop, will drop 19 percent to below 20 million tons.

"The German grain harvest will be below its domestic consumption for the first time in a long while this year," the organization said in an emailed statement Wednesday.

Dry weather stretching from the U.K. to Russia has curbed crop development, prompting analysts to cut their forecasts for this year’s harvests. In Germany, extreme drought in the past few months has hurt crops from wheat to barley, leading to shortages of animal feed and pushing some farmers closer to bankruptcy.

The drought could cost German farmers at least 2 billion euros ($2.3 billion), according to the nation’s GDV private insurers’ lobby. The damages across the bloc of 28 nations have led the EU to extend aid to farmers and relax key environmental rules in some countries.

The biggest harvest declines are expected in corn, with output set to slump 49 percent this season to 2.3 million tons, the DRV said. Barley production will fall 13 percent to 9.48 million tons.

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