Heat is not curbing meat, but drought is setting up price rises

The rule says that above 29 degrees meat consumption falls. This summer in Switzerland it did not work that way: high temperatures have not appreciably dampened demand. According to Bell, one of the country's main food processors, holidays and vacation periods weigh more heavily on buying habits than the thermometer does.

There have been some shifts nonetheless. Fresh fruit, salads and ready-made sandwiches are seeing rising demand, with sandwich production exceeding 220,000 units a day. It is the kind of consumption heat encourages, and it adds to meat rather than replacing it.

The problem, then, is not on the demand side but in what is happening upstream. The prolonged drought is acting on the whole supply chain, and it does so over longer timescales than a heatwave.

Less water, fewer animals

The most concrete signal concerns livestock farms. On several holdings, cattle are being taken to slaughter earlier than planned, because water and fodder are scarce and keeping the animals becomes untenable. In the short term this increases the meat available, but it reduces herd numbers for the months that follow. It is a decision made under pressure, and it pushes the cost forward, onto those who will buy later.

Fruit and vegetables follow a similar pattern. Small-leaf salads are becoming scarce across Europe and Switzerland has started importing them from Turkey: longer distances for a product that normally travels very little.

Bell's chief executive, Marco Tschanz, sums up the picture by listing the factors pushing in the same direction: drought, falling livestock numbers, animal epidemics and the regulatory environment all point to a contracting supply. The expected consequence is higher prices.

Who pays that increase is not a secondary matter. A rise in the price of a basic food weighs proportionally far more on tighter household budgets, where food spending takes up a high share of income. It is an effect that average inflation statistics tend not to show.

Meanwhile another part of the market is moving. Tofu production has grown to the point that Bell has doubled capacity at its Landquart plant. Demand is such that some German retailers are asking to import Swiss product, because European stocks are nearly exhausted. If meat prices do rise, that production capacity will arrive at the right moment.