Key facts
- EU cereal production for 2026/27 is forecast at 273.7 million tonnes, a 5.6% decline from the previous season.
- The decline is attributed to a return to average yields after exceptionally high results in 2025/26.
- Oilseed production is projected to increase by 3.1% year-on-year.
- Farmers face challenges from rising fertilizer costs and weather uncertainties, with spring and summer crops potentially more affected.
- El Niño conditions are expected to intensify, potentially impacting global agricultural markets.
- EU milk supply is forecast to grow, supported by higher yields.
EU agricultural markets are navigating a complex landscape in 2026, with forecasts indicating a contraction in cereal production while oilseed output is expected to rise. Cereal production for the 2026/27 marketing year is projected to reach 273.7 million tonnes, a 5.6% decrease from the prior season. This adjustment is largely due to a return to more typical yields following exceptionally strong results in 2025/26, with overall production expected to remain close to the five-year average.
Oilseed production, however, is anticipated to grow by 3.1% year-on-year, driven by increased sunflower area and improved yields. Despite generally favorable crop conditions, farmers are contending with significant challenges, including rising fertilizer costs and weather-related uncertainties. Nitrogen fertilizer prices saw a peak in April 2026 before easing, but affordability remains a concern, particularly for spring and summer crops like maize, which are considered exposed to reduced fertilization.
The broader economic outlook for the EU in 2026 includes a forecast of 1.1% real GDP growth and inflation rising to 3.1%, influenced by energy costs. The European Commission's Fertiliser Action Plan aims to mitigate short-term cost pressures and enhance long-term resilience. Weather forecasts suggest generally favorable conditions, though heat and water shortages may impact certain regions. Globally, intensifying El Niño conditions are expected to peak in autumn, with potential ripple effects on international supply and price dynamics, even if direct impacts on EU yields are limited.
In the animal products sector, EU milk supply is forecast to grow in 2026 due to higher yields, with prices stabilizing after late-2025 declines, though farm margins are under pressure from input costs. Demand remains resilient, but food inflation and the pass-through of input costs pose risks.