High costs credit pressure and El Nino threaten Brazil crop growth
Brazil is the world’s largest soybean producer and a major corn exporter. For many years, its crop production has grown steadily. However, the 2027 crop season may face new challenges that could slow this growth.
Experts Joe Janzen from the University of Illinois and Joana Colussi from Purdue University highlight that production has increased by about 6.5% each year for both soybeans and corn. This growth has mainly come from expanding farmland rather than higher yields.
USDA forecasts suggest that Brazil will continue to grow production in 2027. Soybean and corn output are expected to increase compared to 2026, reaching new record levels. However, these forecasts follow long-term trends and may not fully reflect current economic pressures.
Farmers are now facing several problems. Fertilizer costs remain high, and Brazil depends heavily on imports for these inputs. This makes production more expensive and reduces profit margins. At the same time, lower crop prices and weaker export premiums are adding pressure on farmer income.
Access to credit has also become difficult. High interest rates and rising debt levels are forcing farmers to rely more on loans from banks and suppliers. This limits their ability to invest in expanding production.
Weather is another major concern. A strong El Niño is expected during the 2026–27 season. This could bring drought in some regions and heavy rains in others. Such conditions can reduce crop yields, especially for soybeans and second-crop corn.
Even with these challenges, Brazil has continued to expand farmland in the past, even during difficult economic periods. This suggests that production may not drop sharply. However, weather risks could still cause short-term changes in output.
Overall, Brazil is likely to remain a key driver of global crop supply. If production continues to grow, global commodity prices may remain under pressure, affecting farm income worldwide.
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