The implications of dietary changes for the environment and for human health are well documented, but the impacts on the agricultural sector are less well researched. We fill this gap by specifying scenarios in which European consumers' diets approximate the EAT‐Lancet dietary recommendations to varying degrees and estimate the effects on agricultural production, incomes and emissions using an agro‐economic modelling framework. The combination of different models allows for a detailed assessment of consequences for the agricultural sector from the global through European NUTS2 level to the farm level at different time scales. Shifting European consumption towards the EAT‐Lancet recommendations leads to decreasing production of animal‐based products, while production of fruits and vegetables increases sharply. The results indicate that the agricultural sector could benefit from a dietary shift, though the results are mixed at country, regional and farm levels. In particular, countries and regions that are highly specialised in animal farming are likely to lose income—at least in the short run—while regions with higher shares of vegetable and fruit farms can expect income gains. In Germany, pig and poultry farms may experience losses of up to 34% of their income, whereas farms with a high share of vegetables could gain more than 30% in income. Our results have implications for the policies to assist these extensive structural adjustments in response to widespread dietary changes.