Business and Policy January 2026: Management Matters – Geopolitics and Global Trends

Geopolitics

Looking ahead for 2026, with a trend starting with Donald Trump’s inauguration back in January 2025, geopolitics will continue to be the key influencer over agricultural commodity markets; with the age old simple ‘laws’ of economic supply and demand continuing to take a back seat.

While the war in Ukraine and other conflicts around the globe will continue to influence supply and demand especially with regards grain, energy, and fertiliser prices; on the global stage, the two key ‘influencers’ emerging for 2026 are the United States and China.  Both leaders of which have already demonstrated that they are not bound by convention or societal ‘norms’ and have no difficulty rewriting the rules as and when they deem it to be in their country's best interests.  While protectionism still comes in the form of tariffs, import restrictions and subsidies; as the United States favours goods being produced within the country, many companies that have sought to locate production to developing countries where costs of production are low are being economically leaned on to relocate to the US.

While the EU committed on the 3^rd of December 2025 to end imports of Russian natural gas by September 2027; it still buys Russian fertiliser made from natural gas and now buys more than it did before Russia invaded Ukraine.  Before February 2022, Russia supplied about 30% of all fertilisers bought by European farmers.  As by the second quarter of 2025, this had risen to a third, with the bloc importing a total of 911,000 tonnes in June 2025 alone: the reliance on Russian fertiliser for food production in Europe is concerning.   In an attempt to curb imports, on the 1^st of July 2025, the EU introduced new import duties on fertiliser imports from Russia starting at 40 euros per tonne for nitrogen fertilizers and 45 euros per tonne for compound fertilizers.  However, while, Egypt and Algeria export nitrogen-based fertilisers, Morocco exports phosphorus-based ones and Trinidad & Tobago exports ammonia; these countries are all more expensive than Russia.

On the 1^st of January 2026, the EU’s Carbon Border Adjustment Mechanism (CBAM) came into effect.  CBAM is a carbon pricing policy introduced by the European Union to ‘reduce greenhouse gas emissions and create a fair, competitive environment between EU-produced goods and imports.’ CBAM applies to carbon-intensive goods, including cement, electricity, iron, steel, hydrogen, aluminium, and fertiliser.   Importers who fail to report emissions accurately, under-report emissions or do not follow the required standards will face fines.  This adds another layer of geopolitical complexity to agricultural inputs given that CBAM will hit fertilisers that use carbon-intensive processes to make ammonia. 

Global Trends - What are the key influencers to look out for in 2026?

Weight Loss Drugs

Entering stage left on the global stage is weight loss drugs namely Glucagon-like peptide-1 abbreviated to GLP-1 and GLP-1RA, more commonly known by one of its trade names, Mounjaro.  GLP-1 mimics a hormone that plays a crucial role in our glucose metabolism and appetite regulation.  It enhances insulin secretion, meaning it helps lower blood sugar levels when they are elevated.  It also slows gastric emptying and promotes a feeling of fullness contributing to appetite regulation.

Originally developed as a treatment for diabetes, it is estimated that 12-14% of adults in the United States have tried the drugs for weight loss, and 6-8% in the UK.  With the US and the UK healthcare systems looking at funding weight loss drugs, the EU looking to approve GLP-1 prescriptions for children as young as 10, and coupled with the expected introduction of a pill form as an alternative to the current need for injections by mid-2026 to deal with the growing obesity crisis; it is expected that the percentage of users in both continents will increase.

What does this mean for the food sector? 

With the drugs reducing sensitivity across the five senses, not only are these people eating less; with concerns over muscle as well as fat loss, there is a greater interest in high protein foods.  The UK and European dairy sector are already responding to this trend with new ranges of high protein yoghurts increasing in prominence on supermarket shelves.  However, with less cravings for snacks, there may be reduced demand for crisps, biscuits and cakes going forward, impacting on the demand for both potatoes and cereals. Supermarkets have kicked off the New Year by advertising their new ranges of high protein/nutrient dense foods aimed at people who are taking weight loss drugs and as a result have lower appetites.

It’s a Generation Game

With the drinks industry already seeing changes in demand with many ‘Gen Z’s choosing not to drink alcohol, like the dairy sector, brewers and distillers are already modifying their product ranges to include low or zero alcohol versions of their popular beers, ciders, and spirits.  Additionally, there is growing interest in alternative beverages like hard seltzer which is made from fermented cane sugars and alcohol and offers a lower calorie and gluten free alternative to traditional beers.  With weight loss drugs also impacting on people’s ability to tolerate alcohol, the low and zero alcohol market is expected to continue to develop as we head through 2026.

Artificial Intelligence (AI)

The agricultural sectors have embraced artificial intelligence in many shapes and guises, from GPS guided tractors and equipment through to robot milkers, scrapers, and feed pushers.   All using sensors to map out its environment and to get the given task done efficiently.  Labour saving virtual fencing and drones allow stock to be contained and checked without needing to leave the farmyard.

While once viewed that AI could not replace human judgment; through image analysis AI can now recognise specific weeds and pests, which if selectively sprayed, saves on chemicals and helps to protect the environment.  Data management programs can crunch data to allow you to benchmark your stock’s performance without the need to chain yourself to a desk or to risk repetitive strain injury from overuse of a calculator.

With labour not only hard to find but increasingly harder to pay for, the ever-evolving field of AI can and will help to enhance efficiency, productivity and the sustainability of farming going forward, but its ultimate success will depend on technology accessibility and affordability.

christine.beaton@sac.co.uk