July 25, 2018

Europe's dry spell affecting its cow feed

With the drought season in full-swing and wheat prices on the rise across the continent, Europe's cows could soon be feeding on more corn.

The sizzling summer in recent months has hit European wheat fields hard, pushing UK feed-wheat futures' premium over French corn to a four-year high.

As both grains can be used to feed animals, this is helping to boost the appeal of corn imports, which is already widely expected to be near a record this season.

Alexandre Boy, an analyst at Paris-based farm adviser, Agritel, explained, "The main impact will be a decrease in the use of feed wheat compared to corn, as well as more imports of corn into the EU. That should help consumption of wheat to stay low for animal feed and ensures that the price does not get too high."

The hot and dry weather that has plagued many parts of Northern Europe has a more major impact on wheat, which is planted earlier on than corn.

European farmers are expected to collect their smallest wheat harvest of the season in six years, which began this month. In preventing the situation from getting too out-of-control, the bloc moved to relax some key environmental rules to help bring relief to the farmers.