Serbia’s agri-food sector started 2026 with weaker momentum, with expectations for improvement in the second half. The trajectory will depend on weather and input costs as much as on demand conditions. Official figures also point to a softer early-year trading environment.
In the first quarter, the total value of sale and purchase of agricultural, forestry and fishing products fell 8.2% at current prices and 5.7% at constant prices compared with the same period a year earlier. The decline occurred ahead of the main harvest season, which shapes the outlook for later months.
Wheat production and export outlook
The US Department of Agriculture said Serbia’s wheat output reached a record 3.7mn tonnes in the 2025/26 marketing year. It also reported that the current fall-planted wheat crop remained in excellent condition. For 2026/27, USDA forecast wheat production of about 3.3mn tonnes.
USDA linked the 2026/27 outlook to higher carryover stocks. That support is expected to push wheat exports to 1.7mn tonnes.
Corn supply as the key variable
Corn is described as the swing factor for volumes across the sector. Serbia’s 2025/26 corn crop was affected by heat and low moisture, reducing production to 3.5mn tonnes, the smallest in a decade. USDA forecasts that if weather returns to normal, corn output in 2026/27 could reach 6.7mn tonnes.
That level would be sufficient to cover domestic consumption of about 3.65mn tonnes. It would also leave roughly 3.1mn tonnes available for export or storage.
Second-half improvement depends on margins
The base case for H2 2026 is framed around volume recovery alongside margin caution. Grains, milling, feed, storage, cold-chain logistics and food processing are expected to improve from the weak first quarter. However, weather conditions and cost pressures remain central to whether gains translate into profitability.
Diesel, fertiliser and transport costs are highlighted as factors that could offset part of the upside from higher volumes. The sector’s performance is therefore tied to multiple operational inputs rather than demand alone.
Trade flows and retail demand
Serbia’s trade position provides an outlet for agri-food activity through regional channels such as CEFTA. The country was running a large surplus with the bloc in the first four months of the year, according to the data cited. Cereals and cereal products were among the export categories supporting that surplus.
Other export categories mentioned alongside cereals include road vehicles, pharmaceuticals, beverages and electrical machinery. On domestic demand, retail trade turnover rose 5.6% in real terms in April, while food, beverage and tobacco retail turnover increased by 5.6% at constant prices.
Cost pass-through limits for processors
Food processors face constraints distinct from those affecting farmers under changing supply conditions. They need to secure inputs at acceptable prices while managing energy use and cold-chain costs. They also sell into a consumer market described as price-sensitive.
May inflation was reported at 3.5% year on year, while food and non-alcoholic beverages rose only 0.1% month on month. That pattern limits room to pass through sudden cost increases to final prices.
Where capacity matters most
The report points to companies with storage, logistics and processing capacity as better positioned than firms exposed mainly to spot commodity pricing. Grain handlers with Danube access are cited alongside mills with reliable procurement arrangements.
Feed producers with diversified raw materials are also mentioned, together with beverage exporters, frozen-fruit processors and branded packaged-food companies. These segments are expected to benefit relative to businesses more dependent on immediate commodity movements.
Key risks for farmers and smaller processors
Farmers and smaller processors are described as exposed to three variables affecting outcomes during critical periods. The first is weather during summer when crops develop most actively.
The second variable is diesel risk tied to the NIS licensing and ownership issue mentioned in the source material . The third is fertiliser pricing volatility driven by global energy and logistics conditions that can quickly change local input costs.
Conditional recovery picture for H2 2026
The H2 forecast is not presented as a return to easy operating conditions but as a recovery from a weak start rather than a boom scenario . Wheat is described as supportive within that framework, while corn could offer upside if weather normalises after earlier heat-related damage.
Food retail demand is characterised as steady and export channels remain open based on the same set of facts cited earlier . The overall issue remains that most positives are conditional on harvest outcomes, fuel markets and consumer conditions aligning with operational requirements.
