Grains, feed and food processing could improve in the second half, but weather, diesel and fertiliser costs will decide whether volume recovery turns into profit.
Serbia’s agri-food sector began 2026 on the back foot. Its second half should be better, but the recovery will depend on weather and input costs as much as demand.
Official data show that the total value of sale and purchase of agricultural, forestry and fishing products fell 8.2 per cent at current prices and 5.7 per cent at constant prices in the first quarter compared with the same period last year.
That weakness came before the main harvest season, which is why the second-half outlook is more constructive. The US Department of Agriculture said Serbia’s wheat production reached a record 3.7mn tonnes in the 2025/26 marketing year and that the current fall-planted wheat crop remained in excellent condition. For 2026/27, it forecast wheat production of about 3.3mn tonnes, with higher carryover stocks helping push wheat exports to 1.7mn tonnes.
Corn is the swing factor. Serbia’s 2025/26 corn crop was hit by heat and low moisture, with production falling to 3.5mn tonnes, the smallest in a decade. Assuming normal weather and average yields, USDA forecasts 2026/27 corn production at 6.7mn tonnes, enough to cover domestic consumption of about 3.65mn tonnes and leave roughly 3.1mn tonnes available for export or storage.
The base case for H2 2026 is therefore volume recovery with margin caution. Grains, milling, feed, storage, cold-chain logistics and food processing should improve from the weak first quarter. But weather, diesel, fertiliser and transport costs can still erase much of the upside.
Serbia’s trade position gives the sector a structural outlet. CEFTA remains an important channel, with Serbia running a large surplus with the bloc in the first four months of the year. Cereals and cereal products were among the export categories contributing to that surplus, alongside road vehicles, pharmaceuticals, beverages and electrical machinery.
Food processors are better placed than farmers in some respects. Domestic retail demand is still positive: retail trade turnover rose 5.6 per cent in real terms in April, and food, beverage and tobacco retail turnover also rose 5.6 per cent at constant prices.
But processors face a different squeeze. They must secure inputs at acceptable prices, manage energy and cold-chain costs, and sell into a consumer market that remains price-sensitive. May inflation was 3.5 per cent year on year, while food and non-alcoholic beverages rose only 0.1 per cent month on month. That limits the ability to pass through sudden cost increases.
The winners will be companies with storage, logistics and processing capacity rather than those exposed only to spot commodity prices. Grain handlers with Danube access, mills with reliable procurement, feed producers with diversified raw materials, beverage exporters, frozen-fruit processors and branded packaged-food companies should be better positioned.
Farmers and smaller processors remain exposed to three variables. The first is weather during the critical summer period. The second is diesel, which has become a wider business risk because of the NIS licensing and ownership issue. The third is fertiliser, where global energy and logistics conditions can quickly affect local input prices.
The H2 forecast should not be read as a return to easy conditions. It is a recovery from a weak start, not a boom. Wheat looks supportive. Corn offers upside if the weather normalises. Food retail demand is steady. Export channels remain open.
The sector’s problem is that almost every positive is conditional.
Serbia’s agri-food companies can have a better second half. To turn that into profit, they need the harvest, the fuel market and the consumer all to co-operate.
