Reporter Wesley Smith spoke to Dan Willis at his farm in Berkshire
The lack of rainfall, coupled with high inflation and the expensive cost of fuel, is a "perfect storm" for his business, according to a local farmer.
Dan Willis says the growth and quality of his crops in Curridge near Newbury, Berkshire, has been significantly impacted by the dry conditions.
It has forced him to harvest early, which is likely to lead to higher prices for consumers.
Dan said: "It's probably two and a half to three weeks earlier than we would normally expect.
"Most of this should be destined for the malting industry, so beer, whiskey, everything that everybody wants, but it's maturing very, very rapidly."
The fast speed of growth has led to Dan's spring wheat being much smaller than usual.
The crops would usually bring 2.5 to 3 tonnes per acre of grain, which is enough to make 5,000 loaves of bread, but it is likely there will only be half of that this season.
Dan said: "When we talk about the quality of wheat, for example, it needs to reach a certain protein level in order to make flour.
"So, in order to make flour that goes into bread, cakes and biscuits, it has to reach a certain percentage.
"If we're not seeing that, we may to import more high-protein wheat from, say, Germany.
"That is going to cost more. It's coming at us from all ways. High levels of inflation, higher levels of food and fuel, it's all a perfect storm."
Dan is also using the hay supplies, which are normally not used until November, to feed the ponies because the ground is baked hard and the grass is sparse.
England has had its driest July since 1911 so far this month, according to figures from the Met Office.
The latest data reveals there has only been 15.8mm (0.6in) of rain averaged across England - just 24% of the amount that would be expected in an average July.
Thames Water is urging customers to reduce the amount of water they use, or risk facing further measures to limit supplies.
The company says that most reservoirs are at 80% capacity, which is fine for the time being, but if the dry conditions continue it could get worse.
Andrew Tucker from Thames Water said: "We are concerned because we are going through it very, very quickly. Mother Nature is being quite tough.
"Over the last year, 10 of the past 12 months have been significantly below average rainfall, so we haven't had that recharge of rivers, or underground aquifers and all of our water is local, so we're going through it at a rapid rate, but we've got nothing going back in the system to refill it."
What is a drought?
Droughts are natural events which occur when a period of low rainfall creates a shortage of water, and they reduce water supplies to different users.
The Environment Agency (EA) says it is important to note that there is no single definition.
Even though a drought is caused by a period of low rainfall, the nature, timing and effects on people, the environment, agriculture or businesses will vary.
Some droughts are short and intense – for example a hot, dry summer – while others are long and take time to develop over multiple seasons.
John Leyland from the Environment Agency (EA) said: "This is the first stage of a drought, and there is no single definition of drought.
"My advice is, don't wait for it to happen, we're already in prolonged dry weather and, therefore, we would already look to the public and users of water to start taking action now."
The EA convened the National Drought Group (NDG) on Tuesday, bringing together officials from the Environment Department (Defra), water companies, the Met Office, the National Farmers' Union (NFU) and others.
Most of England has moved into "prolonged dry weather" status, meaning the EA is now taking precautionary actions to mitigate impacts.
Nowhere in England is currently considered to be in a drought, and most water companies are maintaining good reservoir storage for summer demand.
The EA says if further measures are required, temporary use bans - more commonly known as hosepipe bans - will be determined by individual water companies.
Officials said recent abnormally high temperatures have exacerbated conditions resulting from lower than normal rainfall so far this year in many parts of England.
The Met Office is forecasting potentially several more dry weeks ahead, particularly in the south and east of the country, so the EA and water companies are now enacting the early stages of their drought plans and calling on everyone to do their bit in managing water use.
The EA takes a broad range of measures to manage drought risk, with many already in action.
Measures include helping those areas which are the worst affected by prolonged dry weather by operating water transfer schemes that allow rivers to be artificially maintained and working with the farming sector to provide greater assistance to farmers in prolonged dry weather areas.
Other measures include reoxygenating water and rescuing fish in distress where river flows are especially low, and supporting the Fire and Rescue Service to tackle waste fires and wildfires.
Harvey Bradshaw, EA executive director for the environment and chair of the NDG, said: "While last week's extreme high temperatures are now behind us and there are currently no plans for restrictions on essential water use, we can all do our bit by reducing unnecessary water consumption and following advice from our water company to ensure this remains the case while our rivers are exceptionally low.
"We are working very closely with water companies, farmers and other water users to manage the current situation.
"This meeting was an important step in agreeing joint actions to protect our water resources with further dry weather forecasted for August, including ever-closer working to monitor and manage water supplies and the environment."
Stuart Colville, Water UK director of policy, said: "Ongoing warm weather in much of the country follows the driest winter and spring since the 1970s.
"Water companies have detailed plans in place to manage water resources for customers and the environment, and are doing everything they can, including working closely with government and regulators, to minimise the need for any restrictions and ensure rivers continue to flow.
"As we continue to see extremely high demand, we are urging everyone to carefully consider the amount they are using given the unprecedented conditions."
Much of the country already has low river flows, affecting the quality and quantity of water, with impacts on farmers and other water users, as well as wildlife.
Low groundwater levels, dry soils and low reservoirs have also been seen following months of below average rainfall.
Southern Water has applied for a drought permit for the River Test in Southampton, Hampshire, amid falling water levels.
The most recent weekly rainfall and river flow summary for England, for the week to Tuesday 19 July, said river flows decreased at all but seven sites the EA reports on, with almost all sites classed as below normal and a third being exceptionally low for the time of year.
According to that summary, England has had just 10% of its long-term average (LTA) rainfall for July, with the east and south east recording just 4% of their LTA.
In June, England recorded 74% of its LTA, while the east recorded 67% and the south east recorded 63%.
The last time drought was declared was in 2018.
Country Land and Business Association (CLA) president Mark Tufnell said: "Many farmers are already doing everything they can to reduce their water consumption, including investing in water storage, efficient irrigation systems and irrigating crops at night to reduce losses.
"Agriculture represents just 1% of total UK water abstraction. The current dry weather comes at a critical time for crops such as potatoes, salads and vegetables which need irrigation if they are to reach the quality standards, so cutting supplies now will risk major impacts.
"Farming is on the front line of climate change, and with drought only set to become more prevalent in the UK, the Government must implement measures to build resilience and ensure water for food is prioritised."
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