Extreme weather cuts major crop forecasts as global production outlook turns mixed
The dry conditions have stressed palm trees, reducing the development of female flowers and impairing pollination
WASHINGTON, October 12, 2026 — Extreme dryness and unfavourable weather are expected to reduce production of several major crops around the world, according to the latest United States Department of Agriculture [USDA] World Agricultural Production report.
The USDA has revised down its forecasts for palm oil in Indonesia, peanuts in China, wheat in Mexico, rice in the Philippines, sorghum in Mexico and maize in the European Union, citing adverse weather conditions, declining planted areas and weak farm profitability.
Indonesia’s palm oil production for the 2026/27 marketing year is estimated at 45 million metric tonnes, down 5 percent from last month and 4 percent from last year. The agency attributed the decline largely to a prolonged dry spell that has affected major palm-producing areas since July, particularly eastern and southern Sumatra and parts of Kalimantan.
The dry conditions have stressed palm trees, reducing the development of female flowers and impairing pollination. USDA said observations of withering fronds in Sumatra, supported by satellite-based vegetation indicators, confirmed the extent of crop stress.
China’s peanut production is also projected to fall to 18mln metric tonnes in 2026/27, down 4 percent from last month, 2 percent from last year and 4 percent below the five-year average.
USDA attributed the decline to reduced planted areas in major producing regions of the North China Plain and unfavourable weather. Rising costs of fertiliser, land rent and labour, coupled with poor returns, have prompted some farmers to switch to crops such as maize, sweet potatoes and soybeans.
Heavy rainfall brought by Typhoon Dolphin in August also caused waterlogging in parts of Shandong, Henan, Anhui and Hubei during critical stages of peanut development, reducing yield potential.
In Mexico, wheat production for 2026/27 is forecast at 1.9mln metric tonnes, down 8 percent from last month, although it is 8 percent higher than last year’s drought-affected crop. The estimate remains 37 percent below the five-year average.
USDA said above-average temperatures, particularly in Sonora, disrupted wheat development despite improved water availability that had enabled farmers to plant a larger area.
The Philippines is similarly facing a decline in rice production. USDA estimates 2026/27 output at 12.1mln metric tonnes on a milled basis, down 2 percent from both last month and last year.
Below-average rainfall at the beginning of the wet season reduced water availability and delayed planting in some areas by up to two weeks. Preliminary government data also showed third-quarter rice production falling 15 percent from the same period last year, while harvested area declined 16 percent.
The European Union is recording one of the sharpest declines in maize production. USDA estimates the bloc’s 2026/27 maize output at 48mln metric tonnes, down 5 percent from last month, 16 percent from last year and 21 percent below the five-year average.
The forecast represents the smallest EU maize crop since the 1994/95 marketing year. Extreme summer heat and dryness severely affected France and Hungary, while prolonged drought also reduced production in southern Germany.
France’s maize production is estimated at 7mln metric tonnes, the country’s lowest output in 50 years, while harvested area is projected at its smallest level in 58 years. Hungary’s production is estimated at 2.1mln metric tonnes, the lowest in USDA’s historical series dating back to 1960.
Mexico’s sorghum sector is also under pressure, with production projected at 3.6mln metric tonnes, down 13 percent from last month and 18 percent below the five-year average. USDA said low crop prices, high farmer debt, limited access to credit and erratic rainfall are discouraging farmers from planting the crop.
However, the global picture is not uniformly negative.
Turkey’s wheat production is forecast to reach a record 23mln metric tonnes in 2026/27, up 2 percent from last month, 37 percent from last year and 28 percent above the five-year average.
USDA attributed the increase to above-average rainfall and moderate temperatures across Turkey and the wider Middle East and North Africa region, following drought-related production declines last year.
Brazil is also expected to achieve a record cotton crop of 19mln 480-pound bales in 2026/27, up 3 percent from last month and 1 percent from last year. Record yields are expected to offset a 4 percent decline in harvested area from the previous year.
Argentina’s maize production is projected at a record 64mln metric tonnes for 2025/26, up 2 percent from last month and 31 percent from the previous marketing year, supported by favourable seasonal conditions and higher yields.
The USDA said its estimates draw on information from its global network of agricultural attachés and counsellors, official government statistics, economic data and satellite imagery. The estimates are reviewed by the USDA’s Inter-Agency Commodity Estimates Committee.
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