The European Commission’s latest short-term outlook shows that EU agriculture remains broadly resilient in 2026, even as the sector faces rising input costs and growing uncertainty. The conflict in the Middle East, trade tensions, animal diseases, and weather-related risks are all adding pressure to agricultural markets, while higher energy and fertiliser costs continue to weigh on producer margins. The report also notes that it does not yet reflect the impact of the ongoing heatwaves affecting farmers across Europe.

Economic conditions remain difficult, with EU GDP growth forecast at 1.1% and inflation expected to reach 3.1%, mainly because of energy prices. Food prices are also likely to rise as higher production costs move through the supply chain. Although the outlook assumes a gradual normalisation of energy markets, the Commission warns that risks remain on the downside and that fertiliser affordability has fallen back to levels last seen in 2022.

Sector forecasts are mixed. EU cereal production in 2026/27 is expected to reach 273.7 million tonnes, close to the five-year average, while oilseeds production is forecast to rise by 3.1%. Dairy output is expected to grow, and pigmeat and poultry production should remain stable or increase. By contrast, beef, sheep and goat meat, sugar, and olive oil production are expected to decline. Overall, the report presents a stable but cautious outlook for EU agricultural markets. 

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