Higher costs squeeze margins for Brazil’s record soybean crop

In Brazil, where a record soybean harvest is expected in the 2025/26 season, rising production costs are putting pressure on farmers’ profitability. Total soybean output is projected to exceed 176 million tonnes, but higher prices for fertilisers and other inputs are reducing producers’ margins.

In Mato Grosso, the country’s main grain-producing state responsible for nearly one-third of national soybean output, production costs are expected to rise by almost 8% year-on-year. At the same time, the Mato Grosso Institute of Agricultural Economics (IMEA) has raised its yield estimate to 64.7 bags per hectare, about 7% higher than the previous projection.

Overall, the state supply agency Conab forecasts an average soybean yield of 3.61 tonnes per hectare, similar to the previous season, which benefited from favourable weather conditions. Improved crop performance is also expected in Mato Grosso do Sul and Rio Grande do Sul.

Higher input prices remain the main driver of rising costs. According to Comex data, fertiliser prices increased by an average of 11.8%, while potash fertilisers rose by around 15% between 2024 and 2025. Spending on fungicides, herbicides and insecticides also climbed by about 4.7%, reflecting tighter global supply and stronger demand.

Additional expenses related to insurance, financing, and storage have further increased production costs. As a result, total soybean production costs in Mato Grosso could reach about BRL 7,700 per hectare, narrowing profit margins amid relatively stable soybean prices. According to the Brazilian Soybean Producers Association, Aprosoja, profitability in the current season is expected to be lower than last year.

For the 2026/27 season, however, costs are expected to ease as fertiliser markets stabilise and interest rates potentially decline. The Brazilian central bank has already signalled possible monetary easing, which could reduce financing costs for farmers and partially improve soybean production economics.

Tags: Brazil, soybean, margin, fertilizers