Brazil’s grain sector continues structural transformation

In Brazil, the grain sector continues to shift toward more profitable crops. Corn production is expected to grow further in the 2026/27 season, driven by strong demand from the ethanol industry and more attractive margins compared to rice and wheat, according to a report from the Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (USDA).

According to the forecast, the gross corn harvest in the 2026/27 marketing year will be 136 million tons, up 1.5% from 134 million tons in the previous season. The area planted will increase from 22.8 to 23 million hectares.

Total corn consumption is estimated at 96.3 million tons, slightly higher than the previous season’s figure of 95.8 million tons.

According to the Brazilian Association of Corn and Sorghum Producers, approximately 60% of the country’s corn consumption is used for feed, 32% of which is used for poultry and 15% for pigs. The National Union of the Feed Industry forecasts feed production to grow by 3% in 2025, reaching 94 million tons from 91.1 million tons in 2024. At this output level, the sector could consume approximately 60 million tons of corn, including distillers dried grains (DDGS).

Bioethanol production remains an additional demand driver. The country has 31 corn ethanol plants with a combined capacity of approximately 12.93 billion liters per year, and another 20 plants are under construction. Annual production of DDGS is estimated at approximately 5 million tons.

Corn exports in 2026/27 are projected at 42 million tons, consistent with the previous season. Despite high production potential, a significant portion of the harvest is consumed domestically, and logistical constraints are hindering further growth in export shipments.

As noted by FAS, the pace of storage infrastructure development is lagging behind the growth of agricultural production, creating a structural imbalance that impacts food security, farmer profitability, and operating costs.

Additional risks are associated with Brazil’s dependence on fertilizer imports—approximately 85% of its needs are met through external supplies. Rising global prices, particularly for nitrogen fertilizers (in particular, urea), could increase the cost of producing corn, soybeans, rice, and wheat.

In the rice sector, a recovery in planting area is expected after the weak 2025/26 harvest. In 2026/27, it could increase by 3% to 1.6 million hectares, while production is expected to increase by 1% to 7.7 million tonnes (in milled rice equivalents).

Rice exports are forecast at 1.5 million tonnes (up 7% from the previous season), while domestic consumption may decline slightly to 7.3 million tonnes (down 0.7%).

At the same time, the wheat segment remains under pressure due to high production costs and low profitability. As a result, production in 2026/27 may decline to 7 million tonnes, down from 8 million tonnes the previous year. With demand at 12.5 million tonnes, imports will increase to 7.3 million tonnes.

Argentina remains the key supplier of wheat, accounting for approximately 80% of imports due to its geographic proximity, competitive prices, and logistical advantages.

According to FAS, wheat production in Brazil is limited by climatic, agronomic, and market factors, maintaining the country’s high dependence on imports.

In related segments, processing continues to develop: in early 2026, the first wheat-to-ethanol plant began operations in the state of Rio Grande do Sul. C.B Bioenergia plans to process up to 100 tons of grain per day and produce up to 12 million liters of ethanol per year.

By 2027, the company plans to increase production to 45-50 million liters by expanding capacity and integrating other crops, including triticale, barley, and corn. The company also plans to produce neutral alcohol and by-products for the feed industry.

Tags: corn, grain, Brazil, rice, wheat