Brazil is projected to produce a record 6.5 billion bushels of soybeans in the 2025-2026 crop season, while farm margins should decline to their worst level in almost two decades. Depressed soybean prices, increased production costs and weak port premiums have compressed profitability for Brazilian farmers. The situation could lead to a slowdown in soybean-acreage expansion in Brazil, which has been increasing year after year since the early 2000s. In this article we analyze production costs, revenues and profits for high-technology soybean production in Brazil. We also present the latest official projections for the harvest currently underway and discuss the implications of the changing economic environment for the global soybean market.
Costs increase, revenue volatile
Figure 1 shows average production costs and gross revenue per acre for high-yield soybean production – more than 60 bushels per acre – in Mato Grosso, Brazil’s leading soybean-producing state. Figures are from the 2009-2010 to the 2025-2026 crop seasons, based on estimates from the Credit Score Calculator developed by Cogo Intelligence in Agribusiness. Values are nominal and were converted from Brazilian reais to U.S. dollars using the annual average commercial exchange rate. Total production costs exclude cash rent. More than 80 percent of soybean farmers in Brazil operate on land they own. Instead, the land cost included in the calculation reflects the opportunity cost of land and the capital invested in it.
Production costs have increased through the long term, particularly since the 2021-2022 crop season – a pattern also observed in U.S. agriculture. During the early part of the period from 2009-2010 to 2016-2017, production costs generally ranged from $340 to $470 per acre in Mato Grosso, Brazil. But beginning in 2021-2022 and especially in 2022-2023, costs increased sharply – reaching $602 per acre, the most expensive level in the series. Much of the increase was driven by increased fertilizer prices following the Russia-Ukraine conflict. Brazil imports almost 85 percent of its fertilizer needs. Because the inputs are priced in U.S. dollars, the appreciation of the dollar relative to the Brazilian real further amplified production costs for Brazilian farmers.
Meanwhile gross revenue has been more volatile than production costs, largely reflecting fluctuations in international soybean prices. Revenues increased during the commodity-price boom in the early 2010s, peaking at $740 per acre in 2011-2012. They declined during the mid-2010s price decrease, reaching $405 per acre in 2016-2017. A second revenue peak occurred in 2021-2022 and 2022-2023, when global soybean prices surged due to strong global demand and supply disruptions associated with the pandemic and the Russia-Ukraine conflict.
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