Drought damage in Austria reaches 1 billion euros

Austria’s hail insurance provider estimates that the country’s prolonged drought has already caused 1 billion euros in damage, ORF reported. The effects are being felt across agriculture, fisheries and goods transport on the Danube, with potential consequences for food prices.

The persistent dry conditions have particularly affected grassland, maize, potatoes, sugar beet, pumpkins and soya. “The entire agricultural sector is affected,” Michael Wöckinger of the Upper Austrian Chamber of Agriculture told ORF.

Farmers are also struggling to secure feed for livestock and water for crops. Vegetable growers in the Eferding Basin in Upper Austria face losses of more than 50 percent for processing crops including cabbage, beetroot and celeriac.

Drought threatens fish businesses

Fish and local fishing businesses have been hit even harder. Where possible, fish are being moved to larger bodies of water, said Gerhard Sandmayr, Upper Austria’s state fishing master. Small businesses that depend on fishing are facing serious problems, and some have had to reduce the number of fish they keep when wells dry up.

Local fish prices are also expected to rise. Sandmayr said cheaper imported fish could gain market share as a result, while domestic fish lose ground because of their higher prices.

Damage could continue to rise

Kurt Weinberger, head of the hail insurance provider, described the conditions as a “historical drought” and said the damage was continuing to increase. If high temperatures persist and rainfall fails to arrive by the end of August, the scale of the losses will rise further, he said.

Retailers are referring to the additional costs caused by extreme heat as “climateflation”. Poor harvests can push up food prices, while electricity costs rise because of increased air conditioning use and reduced hydropower generation. Transport costs are also higher when rivers have insufficient water.

Christoph Teller of the Institute for Retail, Sales and Marketing at Johannes Kepler University Linz said hot weather changes consumer behaviour. Shoppers buy more cold foods and drinks, which are less filling and can lead them to purchase additional products such as ice cream or mineral water. This additional spending is known as complementary trade and benefits retailers.