Times are tough for farmers in the U.S., but they’re not the only agricultural producers folding under financial pressure exacerbated by war, geopolitics and trade disputes.
Farm bankruptcies are rising in Brazil as lending conditions deteriorate and acreage expansion stalls, according to Matthew Kruse, president of Commstock Investments, who farms in the U.S. and Brazil.
Brazilian farmers face a perfect storm of economic challenges that threaten to reshape South American agriculture for years to come. Rising fertilizer costs, stagnant commodity prices and tightening credit conditions combine to create unprecedented financial pressure across Brazil’s farming sector.
“Times are difficult right now for the typical American farmer considering profit margins are very tight,” Kruse said in this video report. “It’s actually much worse in Brazil, considering what’s going on with the war in Iran and fertilizer prices.”
The crisis stems partly from timing. Many U.S. grain farmers purchased a majority of their fertilizer supplies for this year’s crop before prices spiked, but Brazilian producers delayed purchases for their 2026-27 crop season.
Banks tighten lending
Market dynamics compound the problem. While U.S. farmers saw modest price rallies following conflict in Iran, Brazilian producers received no such relief.
“They really haven’t had any increase in market prices in Brazil to kind of offset their increase in fertilizer prices,” Kruse said.
Financial stress manifests in rising farm bankruptcies, triggering stricter lending standards. “Anytime that happens, the lending in Brazil starts to tighten,” Kruse explained. “I think a lot of the banks will begin to shut off some farmers as time goes forward.”
Historical precedent suggests significant consequences ahead. Brazil last saw contracted acreage 22 years ago during 2004-06, reducing soybean plantings by 6.5 million acres over multiple seasons. Recovery took five years.
“We’re potentially running into a situation where at the very minimum, acres in Brazil will stay stagnant,” Kruse said. “But I wouldn’t be surprised if we do see a reduction — even if a modest reduction — in Brazil acres.”
To hear more from Kruse, watch the video.