As soaring costs for fertilizer and other inputs squeeze margins, Brazil’s soybean farmers are about to hit the brakes on a two-decade planting expansion binge that turned the country into the world’s top producer and exporter of the oilseed.
Brazil soybean acreage rose by an average of about 5% a year over the past 20 years, said Matthew Kruse, president of Commstock Investments. “What’s different next season is we’re basically looking for a pause in that growth,” Kruse said during a panel discussion Tuesday at the annual Farm Progress Show in Boone, Iowa.
Cesar Cruz, director of research at Advance Trading Inc., also spoke on “The Brazil Factor: How South America’s corn and soybean production and use impacts global markets.”
Brazil’s expected slowdown has a lot to do with disruptions to global fuel and fertilizer markets caused by the U.S.-Iran war. Fertilizer prices remain elevated and supplies constrained just as the South American soybean planting season begins this month.
“Obviously, [costly fertilizer] is affecting farmers here, too, but the timing of it all is affecting farmers even more so in Brazil,” said Kruse, who operates farmland in Brazil and in Iowa. “They rely a lot more on imported fertilizer than we do. So, because of the lack of profitability, you’re finally seeing a pause in land expansion growth.”
Analysts see Brazil’s planted soybean acreage flat to up fractionally. Last week, Brazil-based firm Agroconsult estimated planted area for the country’s 2026-27 soybean crop at 49.2 million hectares (121.6 million acres), up just 0.2% from last season.
Biofuels increase domestic demand
A planting pullback in Brazil would surely be welcomed by U.S. farmers, who watched their share of export markets shrink in recent years as top oilseed importers like China increasingly turned to South America’s abundant supplies. Brazil accounted for almost three-fourths of China’s soybean imports in 2025, while the U.S. share dropped to about 15%.
To be sure, slower acreage growth doesn’t mean Brazil’s crops will be getting any smaller. USDA forecasts Brazilian soybean production in 2026-27 at 186 million metric tons (6.83 billion bushels), which would be up 3% from 2025-26 and a record for the fifth year in a row.
However, marketing analysts pointed to a number of factors that suggest South America’s farmers may be facing an inflection point as expensive inputs, high interest rates and escalating domestic biofuels demand alter market dynamics.
On the demand side, Brazil has embraced biofuels at a much faster pace than the U.S. Cruz said Brazil’s strong embrace of biofuels is incentivizing corn planting, with the country planning to upshift to an E32 blend gasoline (32% ethanol) from E30 currently. Brazil is also ramping up biodiesel blending mandates.
“Brazil is setting itself up to be the place to go for advanced biofuels,” Kruse said. “You don’t see the same resistance there as you see in the U.S.”
On the production side, Cruz also noted Brazil’s high borrowing rates, in the neighborhood of 13.75% to 14%, are an impediment for the country’s farmers. The prospect for weather problems stemming from a predicted “Super” El Niño also adds uncertainty.
Longer term, Brazil’s crop sector “still has tremendous growth potential ahead,” Kruse said. He cited estimates that as many as 80 million acres, much of it currently in pasture, could conceivably be converted to row crops, though he said only about half of that number is closer to reality.
“It’s not going to happen all at once. It’s going to take years,” he said. “But Brazil is going to continue to grow and be a force.”