European Agriculture Takes Devastating Blow - Popular Vegetable Brand Forced Into 6-Week Production Halt

By Abby Liebing October 4, 2022 at 10:35am

A Dutch vegetable company is having to shut down production because of rising energy costs.

HAK, one of the largest vegetable brands in Northern Europe, announced on Monday that it will shut down its entire production for six weeks, Euro Weekly News reported.

“With current energy prices, it is not feasible to continue production in winter,” the company said, according to the report.

While rising energy costs are threatening agriculture and food supplies around the globe, Europe is in particularly dire circumstances.

HAK’s main line of products is preserved food. It takes vegetables during harvest season and cans them.

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But as the company noted, the preservation process requires glass jars, which have become more expensive, and heating, which is a high energy cost it cannot sustain.

“It’s not just the high price, but also the uncertainty,” Timo Hoogeboom, HAK’s managing director, said, according to Euro Weekly News.

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“Today it is two euros for a cubic metre of gas, it has also been three euros at times. What it will be in January or February we don’t know. So to be on the safe side, we will stay closed then,” Hoogeboom said.

The price of a gallon of gas in the Netherlands was about $7 as of Sept. 26, according to Global Petrol Prices.

All of Europe is struggling with energy supplies since fuel exports from Russia slowed and even stopped because of the war with Ukraine. Since Russian fuel was a mainstay for most of Europe, this has left many countries facing energy emergencies.

Germany has tried to control the issue by putting price caps on gas, and the Dutch Union of Dutch Fruit and Vegetable Processors has asked its government to do the same, Reuters reported.

In the meantime, companies like HAK are being forced not only to halt production but also to increase prices.

“Our applesauce has already become about 20 cents more expensive. If energy prices stay this high, you have to think that products across the board will become 30 percent more expensive,” Hoogeboom said, according to Euro Weekly News.

HAK does not yet expect its shelves to go empty, but by winter, its food products might run out.

“But for the chain, I don’t rule it out, especially in January, February and March,” Hoogeboom said.

The global energy market has been rocking for several months, and there are growing concerns about the consequences.

Panelists at a World Economic Forum meeting last month acknowledged that energy pressures — some related to fighting climate change — have a direct link to food supply and agriculture.

“We talk about the changing energy mix for climate issues, but that will increase the price of energy, of natural gas, and that will increase the price of fertilizer,” said Máximo Torero, the chief economist of the U.N. Food and Agriculture Organization.

“That is what really is putting at risk the next supply and could create a problem of food availability as well as access,” Torero said.

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Jason Bordoff of Columbia University’s Center on Global Energy Policy noted that in the midst of Europe’s energy crisis, fertilizer production also has been halted, posing a serious threat to overall agriculture.

“Natural gas is used for cooking, heating and fertilizer, that’s how we grow food. Around 70 percent of fertilizer production in Europe is shut down because there’s not enough energy because it’s too expensive,” Bordoff said.

So with winter coming, Europe is facing an energy crisis that is threatening multiple vital sectors of the economy — with ramifications that could stretch across the globe.

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