Brazil’s soybean farmers are facing a further squeeze on margins that are already at their weakest in at least a decade, a dynamic that could keep planted area broadly flat in the 2026/27 season. That’s according to André Pessôa, chief executive officer of Agroconsult, one of the most renowned crop forecasters in the nation.
Growers are caught between high costs and mounting uncertainty tied to the Middle East conflict, which has clouded the outlook for fertilizers, fuel and global freight. At the same time, ample global soybean supplies are expected to limit further price gains, while Brazil’s tight credit conditions and persistently high interest rates add to the pressure.
“We expect margins to weaken further,” Pessôa said.
Most Brazilian farmers are operating close to breakeven, on average, though profitability varies widely by region and leverage, he said. More heavily indebted producers, particularly those farming leased land, are already in negative territory.
The current backdrop echoes past cycles of low prices, high costs and elevated leverage, Pessôa said. The key difference now is the level of borrowing costs. “What’s different this time is persistently high interest rates,” he said. “Credit conditions are already tighter than a year ago and could deteriorate further.”
In a base-case scenario of continued tight credit and a relatively short-lived conflict — lasting about a month — Agroconsult sees soybean area holding steady in 2026/27. A worsening in either variable could prompt farmers to scale back technology use or planted area. In a more adverse scenario, with tighter credit and a prolonged war, both area and input intensity could decline.
“It’s not possible to determine which scenario will prevail. Our base case is for relative stability in area,” Pessôa said.
For now, producers are delaying planting decisions. That hesitation risks creating knock-on effects along the supply chain, including logistical bottlenecks. Slower input purchases prevent distributors and cooperatives from locking in supply with manufacturers, limiting their ability to plan shipments in advance.
“In 30 years in this sector, I’ve rarely seen so many moving parts at once,” Pessôa said. “This level of uncertainty is concerning.”
Sales Accelerate
While holding off on decisions for the next crop, farmers have stepped up sales of the current harvest. Forward sales of the 2025/26 crop, which had lagged until recently, have now caught up and are roughly in line with historical levels at about 50%.
Producers took advantage of a recent rally in Chicago futures to market part of their output, Pessôa said. The need to raise cash may also have supported sales, particularly ahead of soybean-related debt maturities due on April 30.
Still, elevated borrowing costs would typically incentivize even faster selling. “With interest rates this high, commercialization should be running above the historical average,” he said. “Holding inventories has become very expensive.”
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On Wednesday, Agroconsult raised its estimate for Brazil’s 2025/26 soybean crop. The country is projected to harvest 184.7 million metric tons, up 6.6% from the previous season. More than half of the increase reflects a rebound in output in Rio Grande do Sul and Mato Grosso do Sul following last year’s adverse weather. Planted area reached 49.1 million hectares.
