In recent years, Brazil’s agricultural production has been on a tear, surpassing the US in soybean and beef production. However, Brazilian agricultural growth hit a snag in 2026 when a number of factors — rising input prices, tight fertilizer supplies, and ongoing economic challenges — piled up.
This was the focus of discussing during a panel at the first day of the Farm Progress Show on Sept. 1.
“It’s no secret that Brazil’s land production area has been growing tremendously over the years. If you look at the last 20 years, they’ve averaged a land expansion slightly over 5% year-over-year. And so, what is different about next season is that we’re basically looking for a pause in that growth in land expansion. Or if there is expansion, it will be very modest at best, and so that’s what’s unique about what we’re seeing for next year,” said Matthew David Kruse, president of Commstock Investments.
Unpacking the factors driving Brazilian ag
Brazilian farmers are gearing up to plant soybean for the 2026/27 year, following a short sanitary period, with many growers facing higher input price El Niño uncertainty.
The Iran conflict is “affecting farmers even more so in Brazil” than their U.S. counterparts, given their reliance on foreign fertilizer imports, Kruse explained. This is creating downward pressure on acreage expansion.
In terms of production for next year, Brazil’s soybean crop could be spared the impact of the El Niño, but the second corn crop (safrinha) could see yield impacts if farmers delay planting, he added.
“The El Niño can probably impact the second crop of corn that follows the beans more than the first crop of beans itself because the farmers can delay their planting if they want to. So, there’s plenty of time for soybean crop, even if they just delay it a few weeks or whatever,” Kruse said.
He added, “They have a very short window to plant that second crop corn in Mato Grosso following the beans. … They want to get it planted in January or early February. Well, if they delay planting in just a few weeks to accommodate the beans, it’s really going to affect the corn crop that follows it more than the bean crop.”
Brazil’s ag sector still has room to grow
Longer term, Brazil has room to expand agricultural productions, while many of the largest ag producer, like the U.S., are hitting their limits. Brazil has “as much as 80 million acres that they could convert to row crop production,” but converting half of that could take 10-15 years, Kruse said.
“Some growers just want to focus now on the land that they currently have available and increase those yields, but there still is tremendous growth potential ahead in Brazil,” he added
Bringing more Brazilian agricultural production online does not have to be at the expense of the Amazon, explained Cesar Cruz, director of research at Advance Trading.
“When you talk about area expansion, if you focus on just replacing pastures for crops, you don’t need to move towards Amazon. I think [that’s the] big concern for European consumption. If they are able to prove that they are not going through deforestation, they’re going to get a lot more market share,” Cruz added.
