Brazil’s growing dominance in global soybean markets continues to raise concerns among US producers

According to the January 2026 Purdue University Ag Economy Barometer survey, 44% of U.S. farmers said they were “very concerned” about the competitiveness of U.S. soybean exports relative to Brazil, while another 36% reported being “concerned.” An analysis published by Farmdoc compares production costs and profitability at the farm level in both countries over the 2020–2024 period.

The study focuses on representative farms in Iowa, U.S., and Mato Grosso, Brazil — two key soybean-producing regions. Together, the United States and Brazil account for nearly 70% of global soybean production. During the analyzed period, the average soybean area totaled approximately 1,800 acres on the Iowa farm and 5,900 acres on the Brazilian farm. All cost and revenue data were standardized in U.S. dollars to enable direct comparison.

Cost structures differ significantly between the two countries. In Brazil, direct costs — including seeds, fertilizers, crop protection products, and financing — accounted for more than 60% of total production costs on average between 2020 and 2024. This reflects the input-intensive nature of tropical agriculture, particularly in the Cerrado region, where soil correction and pest management require substantial chemical inputs. In contrast, overhead costs represented nearly half of total costs on the U.S. farm, largely driven by high land values and their continued appreciation in recent years.

Between 2020 and 2024, total soybean production costs in Brazil nearly doubled, rising from $172 per ton to $337 per ton. The sharp increase was mainly linked to soaring fertilizer prices following the war between Russia and Ukraine, as Brazil imports around 85% of its fertilizer needs. Currency depreciation further amplified domestic production costs. In the U.S., production costs also increased, though more moderately — by 13% over five years — reaching $448 per ton, driven by higher land, fuel, and labor expenses.

Despite rising costs, Brazilian soybean farms maintained positive profitability throughout most of the period, although margins narrowed after 2022 as global prices stabilized. Strong export demand, particularly from China — which accounted for an average of 71% of Brazil’s soybean exports during 2020–2024 — helped sustain returns. In contrast, the U.S. farm experienced greater income volatility, including losses in 2020 and 2024, reflecting higher sensitivity to cost increases and commodity price fluctuations.

Looking ahead, analysts suggest that Brazil’s continued expansion into lower-cost frontier regions and ongoing infrastructure improvements may reinforce its competitive advantage. Meanwhile, maintaining U.S. competitiveness will depend on productivity gains, effective cost management, and robust risk management strategies amid persistent global competition and input price uncertainty.

Tags: Brazil, soybean, USA