The European agriculture commissioner is still hopeful the UK will opt to stay inside the customs union when it leaves the EU.
Phil Hogan said "crazier ideas about crashing out without a deal or falling back on World Trade Organisation rules" seemed to be receding.
There were still "loony" voices on the Conservative Party's right who would generate abrasive headlines, he added.
But the impact of such a scenario was finally being understood more widely.
"Now that the worst of the Brexit triumphalism appears to have abated - at least for now - everyone with a stake in the future of the EU-UK relationship should exercise whatever influence they can to maintain this common sense trajectory," said Mr Hogan at an event in Dublin.
He hoped the government would soon recognise that the best way to maintain the trade in agri-food was to say in the Customs Union.
Mr Hogan pointed out difficulties of negotiating trade agreements with countries such as the US, which has different animal welfare and food production standards.
He asked whether British farmers and consumers would accept "hormone beef and chlorine chicken" on their supermarket shelves.
"I seriously doubt it. There may yet be a bloodbath over this issues," he said.
Preserving the single market was the priority for the EU, which meant there could be no sectoral deals for the UK - including on agriculture, he added.
There was a lot of understanding in Europe for "Ireland's predicament arising from Brexit", said Mr Hogan.
This included the "negative impact of restoring a so-called hard border", he added.