Global Agriculture Forecast 2026: Continued Volatility and Needed Adaption Ahead
23 December 2025 Since 2020, we’ve developed a forecast of key events likely to impact global agriculture and agribusiness in the year ahead and beyond. We focus on major events likely to have the most impact on agribusiness.
So now what’s ahead for 2026?
Here are our nine key predictions for global agriculture and agribusiness for the coming year.
1. Agroindustry stagflation continues into 2026
We made this prediction for 2025, and now with some dismay we expect stagflation to continue into 2026. Globally the commodity market continues to be beset by overproduction: high grain inventory, oversupply of tree crops and vegetables, and lack of premiums for organic production.
Flat global demand in the Americas, Europe, and the Asia-Pacific nations is being driven by aging, shrinking populations, and in the U.S. particularly food consumption likely will be impacted by increasing use of obesity drugs and the Trump administrations Make America Healthy Again program.
All of this will continue as global migration slows and birth rates remain below replenishment rates. At the same time, cost of production still stresses producer margins. Some operations will seek economies of scale to generate cash for acquisitions, accelerating consolidation. Among suppliers, some relief in margins has occurred, but most of them are still under continued past and current inflation pressures on the operation expense side.
Action Plan:
- Automation is needed at all levels of the supply chain to continue driving efficiencies. To the positive: Original equipment manufacturers (OEMs) are offering low finance incentives to their dealers.
- Focus on new customers. New segments – e.g., biofuels – will be key.
- Aggressively adopt new technologies to improve yield, margin, and profitability.
2. Input prices likely will be flat to increasing as suppliers compete for farm purchases
We’re in an era of international tumult. We see global tariffs and the resulting retaliation against tariffs causing short-term volatility in input prices, then settling down to some measure of adaptation in the medium term. Blunting these effects somewhat will be government subsidies, which in the U.S. could be in the neighborhood of $40 billion to $60 billion.
Action Plan:
- Focus on automation, which continues to lag in the short term. Labor costs will continue to be negatively affected by inflation and a lack of supply.
3. China’s economy continues to be challenged
China’s enormous pesticide manufacturing capacity continues to drive margin erosion globally. While this is positive for end users of crop inputs, profitability for the supply channel remains challenging. Lower margins make the distribution channel’s reinvestment in technology and services that much more difficult, and certain markets will need further restructuring or reengineering.
Action Plan:
- Winners will be those companies that manage cash flow, make investments in technology that leads to on-farm adoption, segment their customers and focus on those with the greatest potential return, and control or outright avoid some costs.
- Diversification – focusing on growth segments with stable / better margins – also is advisable.
4. Energy outlook remains positive, except in areas where political taxes play a role
Global agriculture runs on energy. Continued supply-side policies in the U.S. and the Middle East are keeping energy prices stable and attractive, and helping to maintain a lower but stable value of the U.S. dollar. Meanwhile, China as a major consumer of energy has hedged its bet on the future by investing in all energy types from fossil to alternative while also upping their inventory of strategic oil. For its part, Western Europe will continue to need to adapt, possibly by ramping up its nuclear capacity.
Action Plan:
- Keep an eye on Russia and Iran. The energy supplies in these countries could make the global energy market more topsy-turvy.
5. South America is a two-sided coin in 2026
A key question, as always in this region, is Brazil. Will it recover from high interest rates and inflation that have caused major defaults in agribusiness sector, which accounts for about 25%-30% of its overall GDP? What will struggling input suppliers there do, as many are retreating. For instance, Nutrien divested some of its fertilizer blending plants in Brazil to focus on its core retail and tech businesses. Argentina on the other hand may experience an agricultural renaissance with U.S. financial support and under the political and economic leadership of President Javier Milei.
Action Plan:
- Look to invest in Argentina if the market signals are positive and political policy stabilizes, though history does also signal caution here.
6. The cost of money is a positive tailwind
As the U.S. economy goes, so goes the cost of money globally. Lower interest rates in the U.S. should drive a lower-but-stable value of the dollar, giving agribusiness predictability in regard to capital investments, inventory levels, and trading of commodities.
Action Plan:
- Watch for these particular developments: should tariff negotiations stabilize, and the strength of the U.S. economy plus lower interest rates reduces debt interest payments, and the economy accelerates into a GDP growth rate of 4%+ . . . this all will look favorable for agribusiness globally.
7. Technology: The future bodes well for integrated technology packages for farmers
There are admittedly some headwinds here. Cybercrime continues to be a threat, leading to disruptive risks and costs overall to agribusiness. A major cyberattack could cripple key areas including trading platforms, logistics networks, and agro-processing. At the same time, solutions for soil health continue to be needed to adapt farmland to new climate change, the high nutritional needs of improved germplasms, and sustainable long-term equity value for multi-generational farm families.
Action Plan:
- The trends to on-farm automation, precision farming, and robotics continue. Moving forward, the movement increasingly will be to pulling everything together into integrated technology packages for farmers. New products will be combining artificial intelligence, digital software, and quantum computing with robotics and input/output application.
8. Where to Invest: Full-service, full-gamut solutions
Biorationals seem to be the key growth segment, yet government regulation lags in process and direction. While biorational technology is improving, startup and small companies dating to circa 2000 continue to compete with one another, causing confusion and skepticism at the farmgate. Mature agribusiness channels also struggle with overhead and margins and are being disrupted by smart business models. To this sector’s favor is improving germplasm as biological breeding continues to become less capital-intensive.
Action Plan:
- Even with the continued growth of biologicals, classical innovation is still needed to find solutions and insect and weed resistance. IPM increasingly will be a full-service opportunity of customer solutions having nutritional, biorational, chemical, and germplasm components driven by technology as described in #7 above.
9. Realignment of supply chains
If tariffs or regulations shift and suddenly are imposed short-term or mid-season, producers will not be able to adjust their planting and/or harvesting decisions and capital investments, which will magnify their losses. Agribusinesses will see losses in export market shifts and potentially higher costs, i.e., in crop inputs. As a consequence producers will become more dependent on government supports.
Action Plan:
- A potentially serious danger: trade wars meeting climate shock. If tariffs collide with climate-induced crop shortages, the global food system will face a “double whammy” of food inflation and social unrest.
Our 9 Top “Watch-Outs” for 2026
We offer these top nine “watch-outs” for the coming year which could significantly disrupt all the above and more:
- Simultaneous failure of major global breadbasket regions.
- Nuclear winter resulting from military conflict.
- Rapid spread of new plant or animal diseases.
- Disruption in shipping corridors.
- Sudden regulatory shock – for instance, the EU deforestation regulation (EUDR), effective Dec. 30, 2025, for most businesses, and requiring companies to prove the products they sell in the EU do not contribute to deforestation or forest degradation.
- Trade disruptions and tariff escalations on agribusiness. In the U.S., for example, the Trump administration’s trade policies is likely to affect buyer demand for U.S. commodities with impacts on multiple other countries.
- China, Russia, and/or Brazil imploding, sending domino effects around the world as social unrest leads to drastic political actions as we saw during the COVID-19 pandemic.
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