Drought in Germany: Raiffeisen Association Expects Significantly Smaller Harvest

DRV grain market expert Guido Seedler explained that the losses hit the industry on the home stretch of an already difficult season. "Dennoch sind die Verluste auf der Zielgeraden für die ohnehin unter starken Kostensteigerungen leidende Landwirtschaft ein harter Schlag," said Seedler. The association also pointed to significant regional differences: Especially in Bavaria and other southern German regions, the dryness has severely stressed the crops in the fields.

Supply and Prices

Despite the weaker harvest, the DRV currently sees no threat to the population's supply. The supply of bread grain is overall secure in Germany, also because the domestic market can fall back on imports. However, the situation is existentially burdensome for many agricultural operations, especially as drought periods have occurred with increasing frequency in recent years.

The association does not expect rising consumer prices for items such as bread and rolls against the backdrop of the harvest. Producer prices for grain have in fact weakened recently, while costs for items such as fertilizer, energy, and logistics remain high. The share of bakery product prices that is directly attributable to grain costs is low. Accordingly, no immediate price surge is to be expected in supermarkets.

Demands on Policymakers

The DRV called for short-term aid from policymakers to secure the liquidity of operations. This includes low-interest loans, adjustments to tax payments, and simplified access to liquidity assistance. Insurance solutions against drought damage must also be expanded, as classic crop insurance is hardly widespread in Germany.

Agricultural associations point out that the 2026 drought falls into a series of dry years. 2018, 2019, and 2022 also suffered from pronounced dryness. Industry experts expect that harvest yields in Germany could continue to decline without far-reaching adjustments to climate change.

Outlook and Further Developments

The DRV emphasized that the current forecast is based on reports from cooperative collecting traders and processors across the entire federal territory. The final balance will not be determined until after the harvest in late summer and early autumn. Until then, further weather vagaries could still change the results.

Seedler announced that the association will monitor developments closely and publish further adjustments to its forecast if necessary. Policymakers and industry are now called upon to set the course for more resilient agriculture. This includes investments in irrigation infrastructure, the breeding of drought-tolerant varieties, and the expansion of digital control solutions.

Reactions from the agricultural sector are subdued. While individual operations insist on government support, market experts see the world market as a buffer: Since Germany already imports and exports grain, extreme price swings for bread and bakery products are unlikely in this country. Nevertheless, it remains to be seen how the coming weeks develop in the fields.