BackgroundLocal sward dieback, especially in grasslands on peat soil, in response to the extreme 2018/2019 drought demonstrates climate vulnerability of intensive grasslands in northern Central Europe.MethodsWe explore the influence of microtopography, that is, the within‐field mosaic of depressions and elevated patches, on soil volumetric moisture content, standing biomass and biomass crude protein (CP) and fibre content in intensively managed grassland on peat soil in a moist year (2021) and a dry year (2022) for quantifying small‐scale spatial heterogeneity within a field.ResultsWe found high within‐field variation in soil moisture, biomass and forage quality and a moisture dependence of productivity that was stronger in the dry year. CP ranged from 10% to 25% within a field, being lower in moist depressions than elevated patches in the wet (but not in the dry) summer.ConclusionsThe moister depressions help to limit the overall productivity decline in dry summers, whereas, in moist summers, the higher dry patches produce more protein‐rich forage than the depressions, where productivity is higher but quality is lower. We recommend adapting grassland management to this heterogeneity through spatially differentiated management regimes in order to better cope with an increasingly drier and more variable climate.