“Nobody is making any money!” Matthew Kruse said earlier this year while speaking at Brazil vs the USA in the Global Grain Game.
At the time, Kruse was looking at the profit margins for his farm in Brazil and his home operation in Iowa, thinking about his farming in-laws and friends in South America and his neighbors in the U.S. He appeared on a Farm Futures panel at the Farm Progress Show to discuss ag competition between the U.S. and Brazil and how China is benefitting from a race to the price bottom for soybeans.
This week, however, financial data out of Brazil showed his instincts about economic realities for farmers were right on the money (pun intended).
Farm bankruptcies in Brazil tripled over the last two years, going from 534 bankruptcies in 2023 to 1172 in the first three quarters of 2025.
“Brazilian farmers are silently going broke,” Kruse reports in this Ag Marketing IQ video, referring to the title of a report recently issued in Brazil. “Silently,” Kruse explains because Brazil continues to expand production and bankruptcy laws in that country focus on reorganization.
Those two elements mask the farm financial crisis in Brazil.
- Bankruptcy in Brazil. Unlike the U.S., where Chapter 11 bankruptcy often leads to severe organizational changes, Kruse explains that Brazil’s bankruptcy system allows debt restructuring, often at the expense of creditors. This dynamic impacts the broader industry, as banks tighten lending restrictions for other farmers.
- Investment in South American ag. “New money is coming in from investment firms and individuals without production experience,” Kruse says. “They’re clearing tens of thousands of acres annually, fueling growth despite the financial struggles of established farmers.”
Ultimately, as U.S. farmers can attest, crop expansion on the backs of investors isn’t sustainable.
“Time will tell how long this lasts, but for now, fresh cash is keeping the wheels turning,” Kruse says.
Hear more on the financial woes in South America and planting progress in Brazil as Kruse provides an inside look at agriculture in Brazil.