European Corn Risks Being Left in Fields as Gas Crunch Bites

(Bloomberg) -- European corn farmers are facing the prospect of having to leave crops in fields because of the energy crunch, a fresh sign of how the crisis is heightening the risk of global food inflation.

The grain typically needs to be dried down after it’s collected to ensure the proper moisture content, a task that’s becoming more costly as gas prices surge. Most of the region’s harvest is collected through November, and the crop is in strong demand to vie against increasingly expensive wheat and offset shortages from Brazil.

But farmers in France, the European Union’s top producer, are being told by gas suppliers to prepare for shortages, use less of the fuel and even postpone collection if possible, growers group AGPM said Wednesday. In No. 4 exporter Ukraine, the gas rally is also contributing to a slower harvest than last year.

“It’s too expensive” for Ukraine’s farmers to dry corn after gathering it, said Mariya Kolesnyk, a deputy director at consultant ProAgro in Kyiv. “That’s why they seek to dry it, say, in a natural way, in a field.”

Runaway energy prices have already driven up fertilizer costs, while vegetable greenhouses in the Netherlands have cut back on lighting to reduce expenses. That’s threatening to curb future output or raise costs that could be passed onto consumers, and adding to inflation worries at a time when global food prices are at the highest in a decade.

Harvest Risk

Harvesting too late can deteriorate crop quality and reduce farmer incomes, which are already being hit by the “explosion” in drying costs, AGPM said. Winter is approaching, and wet or cold weather can also raise the risk of fungal problems like fusarium. Large Ukrainian farming companies are still opting to dry corn after harvesting, despite the high gas costs.

About a third of Ukraine’s corn has been harvested so far, versus more than 50% at the end of October 2020. French progress stood at 32% as of mid-October, down from 75% at the same time last year. Rains earlier on had also slowed collection.

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