The global agricultural landscape has entered a new phase where geopolitics – not only traditional market forces – will dictate agricultural trade flows, prices, and production decisions, according to Rabobank’s Agri Commodity Outlook 2026.
The report describes a world increasingly divided between two spheres of influence – the United States and China – where agricultural commodity exports have become “pawns on a geopolitical chessboard.” And both of those spheres are crucial export destinations for New Zealand agri commodities.
Trade wars are reshaping long-standing patterns of production and export by means of tariffs and subsidies, leading to a fragmented, policy-driven global food system.
“Agriculture is no longer playing by supply-and-demand rules, it’s also playing by geopolitical ones,” Rabobank head of agri commodity markets research Carlos Mera said.
Stefan Vogel, General Manager – RaboResearch Australia & New Zealand
From tariffs to subsidies
The report says initial trade conflict that began with tariffs has evolved into a global subsidy race. Governments across the world – from the US and Brazil to Indonesia, Argentina, and Russia – have intensified agricultural support programmes through direct payments, minimum price guarantees, and biofuel mandates,
General Manager for RaboResearch New Zealand and Australia Stefan Vogel said this widespread protection has muted the reaction of farmers to low prices and will likely sustain high total planted areas, keeping global grain and oilseed prices subdued for 2026.
“And this should benefit feeding costs for New Zealand’s livestock farmers,” he said.
Diverging markets
Tariffs and trade barriers could widen price gaps between producing regions, the Rabobank report says.
“Before the Trump-Xi agreement, Brazil’s soy export prices benefited from strong Chinese demand, while US prices were heavily depressed. US and Brazil soybean prices have come closer together since the announcement of the agreement, but given that we still see a lot of trade barriers ahead, more price differences are likely,” Mr Mera said.
“We expect these geographic price differentials to persist or increase in 2026.”
Meanwhile, the report said the tariff war’s unintended effects are still being corrected. US authorities are reviewing tariffs on products the country does not produce – such as coffee and cocoa – which could ease costs for US consumers and restore trade flows from producing nations.
Economic outlook
Despite trade tension, global growth in 2025 has exceeded expectations, supported by monetary easing, lower energy prices and frontloading of exports ahead of tariff hikes – a tactical gambit to mitigate early shock, the report said. However, these mitigating factors will fade and the negative effect of the tariffs and uncertainty are likely to surface in 2026.
Rabobank forecasts global GDP growth at 2.9 per cent in 2025, easing to 2.7 per cent in 2026. While trade between major blocs will likely slow, intraregional trade could rise due to diversion. Inflationary pressures are expected to persist in some regions but will likely be less severe than previously projected.
The only certainty: Uncertainty
Mr Mera said the world is only at the beginning of the “middle game” of this geopolitical struggle.
“We foresee continued trade disruptions, fluctuating regional prices, heavy government intervention, and a high probability of unexpected events,” he said.
“Geopolitical fragmentation has redefined global agriculture. Farmers, traders, and policymakers alike must prepare for a world where trade is disrupted and the unexpected is now the baseline.”
Mr Vogel said New Zealand’s trade with the US and China is going strong, benefiting farmgate prices.
“And New Zealand will be hoping to fly largely under the geopolitical radar again in 2026.”
Commodity outlooks
Dairy: Milk production in most key global dairy-exporting regions is growing strongly, with a velocity that has outperformed RaboResearch’s previous expectations. These gains are expected to maintain momentum into 2026, though the pace will moderate.
Live Cattle: Lower US cattle and beef supplies should provide market support in 2026, while consumer beef demand will dictate the price ceiling. Rabobank expects US cattle slaughter to decline for a fourth consecutive year in 2026 and falling fed steer and heifer supplies reflect the cumulative impacts of recent herd liquidation on feedyard inventories, the continued ban on Mexican cattle imports, and increased heifer retention.
”US beef imports are expected to remain strong in 2026 which should benefit export nations including New Zealand” Mr Vogel said.
Wheat: The 2025/26 season marks the first global wheat surplus in six years, with output up by 25 million metric tons. However, the Rabobank report said lower prices (around an average of USc 533/bu in 2025 so far) are likely to trigger area reductions, leading to a projected 4 million metric ton deficit in 2026/27. Wheat prices are expected to remain constrained by cheap corn, though adverse weather or renewed geopolitical tension could lift them.
Coffee: After record-high arabica and robusta prices in 2025, we are expecting supply-demand balance in 2025/26, with the first significant global surplus in five years – estimated at 7 million to 10 million bags – likely in 2026/27. Prices are expected to stabilize between USD 2.5 and 3.5/lb by the end of 2026, although volatility will remain high in the short term.
Cocoa: Cocoa prices have nearly halved this year amid a rebound in production and weak demand. RaboResearch forecasts a 328,000 metric ton surplus for 2025/26 and a potential 403,000 metric ton surplus for 2026/27. Production is shifting from Côte d’Ivoire and Ghana toward Latin America and Indonesia, increasing the risk of future overproduction and continued volatility.
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