Food Chain Impacts in an Era of Geopolitical and Climate Disruption
Mark Lumsdon-Taylor · Posted on: February 18th 2026 · read
The Future of Food series: Risk, Resilience and the Path to Sustainable Value Chains
Europe’s food chain is entering one of the most turbulent periods in recent decades. What was once positioned primarily as a sustainability transition is now inseparable from geopolitics, climate instability, regulatory divergence and supply-chain fragility. Across inputs, logistics, trade relationships and domestic agricultural policy, multiple pressures are converging to reshape how food is produced, processed and distributed.
Regulatory reforms are tightening expectations around transparency and sustainability performance. For food‑system participants, sustainability has shifted from a reputational concern to a core driver of food security, economic resilience and long‑term competitiveness.
Our recent participation in the 2026 Sustainable Foods Conference reinforced our confidence in these priorities, and it was welcomed to see, that it was clear that the industry is actively collaborating to deliver scalable, practical solutions.
The Forces Reshaping Food Production, Processing and Distribution
Geopolitics as a Food-Chain Risk
Geopolitical instability, like conflicts, trade sanctions, tariff escalations and strategic rivalries.
Structural Input Dependencies
High and volatile input prices are now consistently identified as primary threats to EU food-supply stability.
Internal Market Fragmentation
Geopolitical pressures also amplifying internal EU tensions.
Climate Instability as a Structural Threat
Europe is warming faster than any other continent. Climate volatility is now persistent, not episodic.
Logistics as Critical Security Infrastructure
Food systems rely on just‑in‑time movement of inputs and goods.
Regulatory Realignment and Sustainability Reporting
Regulation is shifting rapidly. Divergence between UK and EU frameworks increases complexity.
Geopolitics as a Food-Chain Risk
Geopolitical instability has re-emerged as the dominant risk shaping global supply chains. Geoeconomic confrontation - where trade is used as a strategic tool - has intensified. Recent tariff escalations between major trading blocs have introduced fresh uncertainty for exporters and importers alike. For European agrifood businesses, this volatility affects both outbound markets (such as dairy and processed foods) and inbound supplies, including machinery, feed additives and crop inputs.
The cumulative effect is reduced predictability across the entire value chain. For Europe’s interconnected agrifood supply chain, this volatility reduces predictability across production, processing and distribution. External shocks increasingly translate into:
- higher input costs
- logistics disruptions
- squeezed margins across livestock and crop systems
- greater exposure for both inbound supplies and outbound markets
Structural Input Dependencies
Europe remains structurally dependent on imported goods, like fertilisers, protein feedstocks and certain feed additives. This dependency creates systemic vulnerability when geopolitical tensions or regulatory changes disrupt supply.
Uncertainty surrounding implementation of the EU Deforestation Regulation (EUDR), for example, has already contributed to instability in soybean markets. Suppliers have withdrawn forward contracts amid unclear compliance timelines, while remaining shipments command price premiums linked to regulatory risk.
When input costs rise sharply, farmers face difficult choices, with each option Each option affecting the resilience of the broader food chain.
- absorb losses
- reduce production
- or pass costs downstream
Internal Market Tensions and Agricultural Fragmentation
Geopolitical tensions are also interacting with internal EU dynamics. Disputes over Ukrainian grain flows, border blockades and farmer protests, have exposed fractures within the single market.
At the same time, proposed reforms to the Common Agricultural Policy (CAP) risk increasing national discretion in implementation. While flexibility can improve local responsiveness, it may also lead to policy fragmentation, undermining market consistency across the bloc.
For food‑chain participants operating cross‑border, fragmentation complicates compliance, distorts competition and weakens collective resilience.
Climate Instability as a Structural Threat
Europe is the fastest‑warming continent, and extreme weather events, such as droughts, floods and heatwaves are becoming structural features rather than exceptional shocks.
Climate‑related agricultural losses are already substantial, placing pressure on public budgets and insurance systems. Production variability is reshaping commodity markets, and businesses are being forced to diversify sourcing regions, adjust processing capacity and reimagine risk‑management strategies.
Climate adaptation is no longer an environmental aspiration; it is a food‑security imperative. Regenerative farming, soil‑health improvement, water‑efficiency measures, diversified cropping systems and climate‑smart technologies are increasingly essential to stabilising production.
Logistics as Security Infrastructure
The 2025 Małaszewicze border disruption in eastern Poland - where a two‑week closure caused hundreds of millions of euros in losses - demonstrated how fragile key corridors can be.
Surveys of logistics managers indicate geopolitical factors now rank as the most serious supply‑chain threat. Food systems, which depend on just‑in‑time movement of both inputs and finished goods, are particularly exposed.
Building resilience requires digitalised logistics systems, diversified trade routes and greater redundancy in transport networks. The reclassification of logistics as strategic infrastructure reflects its centrality to food security.
While these physical and geopolitical pressures intensify, regulatory expectations are also evolving.
Regulatory Realignment and Sustainability Reporting
The UK is moving toward mandatory sustainability disclosures aligned with the UK Sustainability Reporting Standards (UK SRS), closely modelled on international ISSB standards. Climate‑related disclosures will become compulsory for listed companies, with broader sustainability reporting introduced on a “comply or explain” basis. This marks a transition from voluntary transparency to structured, investor‑grade reporting.
The EU, meanwhile, continues to advance its own sustainability framework under the CSRD and ESRS regime. Although the UK and EU approaches are diverging in structure, both signal heightened scrutiny of environmental and climate‑risk exposure.
For food‑system businesses robust sustainability data, governance systems and credible transition plans are now strategic necessities. Disclosure is becoming intertwined with access to capital and market trust.
Conclusion: Sustainability as Strategic Security
The convergence of geopolitical volatility, climate instability and rapidly evolving regulation means sustainability is no longer a peripheral environmental commitment — it has become a foundation of economic resilience, supply‑chain stability and long‑term competitiveness across the food sector.
Looking ahead, we believe the future of the food industry will be shaped by five strategic pillars. Together, these will define what strategic security looks like for modern agrifood businesses.
- Resilient and future‑proof food systems
- Strategic autonomy and secure supply chains
- Climate‑adaptive production and circularity
- Policy coherence and fair transition
- Innovation in sustainable and alternative value chains
MHA’s capabilities - from regulatory‑risk management and Scope 3 transparency to climate‑resilience planning and fair‑value policy work - sit at the centre of this transformation. As the pressures on the food system intensify, these disciplines are no longer optional: they are essential to safeguarding competitiveness, investment readiness and food‑system stability in an era where volatility is the new normal.
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