Opinion: Agriculture could break records in 2026, but the numbers still don't add up in the field.

Brazilian agribusiness has presented quite favorable macroeconomic indicators in 2026. In the first quarter, the GDP of agriculture (relative only to activities carried out within the farm gate) advanced 0,7% compared to the same period in 2025, a year in which the sector had already registered significant growth of 11,7% (for the full year, compared to 2024). The outlook for production also remains positive: the 2025/26 Brazilian grain harvest is expected to reach a new record of 358 million tons, a volume 1,6% higher than the previous harvest, which was already historic. The main highlight is soybeans, whose production is estimated at more than 180 million tons, an increase of 8,6 million tons compared to the previous cycle, according to a survey by the National Supply Company (Conab).

The overall performance of foreign trade reinforces this scenario. Between January and April 2026, agribusiness exports grew by almost 4% in value (current dollars) compared to the same period of the previous year. Among the most prominent segments are meat and the soybean complex, whose external sales advanced by approximately 20% and 15%, respectively, according to data from the Secretariat of Foreign Trade (Secex).

However, aggregate figures only tell part of the story. Behind the positive performance observed in national macroeconomic statistics, rural producers face an increasingly challenging environment, marked by rising costs, increased risks, and worsening financial difficulties. This is a reality that does not always appear immediately in macroeconomic indicators, but which tends to have significant repercussions on the sector's activities in the coming periods.

Not by chance, the expression "perfect storm" has gained traction in public debate. Former minister and senator Tereza Cristina recently used the term during an industry event to refer to the growing signs of deteriorating conditions faced by producers. The same expression was used by the current Minister of Agriculture and Livestock, André de Paula, who, in a recent interview, described the current situation in agribusiness as a conjuncture in which several warning signs are "flashing at the same time."

These warnings can be summarized in a worrying combination of factors: sharply rising production costs, commodity prices that are not keeping pace with this movement, high levels of indebtedness, and uncertainties. However, this situation should not be interpreted as a natural or temporary adverse phenomenon. It exposes structural weaknesses accumulated over decades.

Recent pressure on inputs clearly illustrates this vulnerability. Driven by international trade wars and disputes, fertilizer prices have risen sharply. The biggest direct impact was on nitrogen fertilizers: according to Platts data, the price of granulated urea increased by more than 60% between February and April. During the same period, ammonium sulfate registered an increase of nearly 40%. Phosphate fertilizers also followed a similar trajectory. As a reference, the price of MAP (monoammonium phosphate) advanced by about 30% between January and May, according to a survey by Itaú BBA based on data from LSEG/Consultoria Agro.

As a result, fertilizer prices have reached their highest levels since 2022, a period marked by the impacts of Russia's invasion of Ukraine and the effects of the COVID-19 pandemic, as well as potential risks of shortages. More than a temporary situation, this new escalation highlights, once again, the greater structural vulnerability of the Brazilian production system: soils that require continuous nutrient replenishment to sustain high levels of productivity, while approximately 85% of the fertilizers consumed in the country are imported.

Furthermore, the nitrogen, phosphorus, and potassium supply chains have distinct production structures and depend on different regions of the world for their supply. This characteristic means that each group of nutrients is subject to specific geopolitical, logistical, and commercial risks, increasing the country's exposure to external shocks (read more details in the study). "Fertilizers and the structural vulnerability of Brazilian agriculture").

Regarding inputs, the resale price of diesel fuel rose by approximately 15% between January and May, according to data from the ANP (National Agency of Petroleum, Natural Gas and Biofuels), primarily increasing road freight costs, which are still responsible for about 70% of the flow of national production, according to a report by the Confederation of Agriculture and Livestock of Brazil (CNA). As a consequence, increases in energy costs end up spreading throughout the agro-industrial chain, highlighting the country's difficulty in structuring more efficient logistical alternatives.

The National Institute of Meteorology (Inmet) has been issuing warnings of conditions favorable to an El Niño episode in its formation phase, with an 80% chance of consolidation, potentially extending until the beginning of 2027. This could lead to crop failures and losses for producers and consumers. However, no new policies to contain and mitigate these imminent risks have yet been implemented. 

Persistently high interest rates and increased credit restrictions are also creating difficulties for financing, investments, and even potential loss management. The Selic rate, currently at 14,50% per year, keeps market interest rates at a high level and, combined with the increase in the number of judicial reorganizations, has led banks to demand more guarantees and caution in operations with the sector. According to a survey by Serasa Experian, in 2025 there was a 17% contraction in the volume of rural credit, a trend that, according to the entity, should intensify throughout 2026.

The renegotiation of rural debts is also taking center stage in the debate. A growing number of producers are already outside the credit market or unable to take on new financing, a topic that is being discussed to receive more appropriate treatment in the next Harvest Plan.

At the same time, the prices received by producers have contributed to worsening this situation. As a reference, there was a nominal drop of 3,6% in the average price of soybeans between January and May 2026 compared to the same period of the previous year, according to the CEPEA/ESALQ Paranaguá indicator. This movement reflects the greater supply, both in Brazil and in South America, in addition to expectations of expansion of the cultivated area in the United States. Other agricultural commodities have also been registering declines compared to the same period last year. And the excess product on the market must be disposed of, given that the country has low storage capacity, yet another problem related to the structural logistical bottleneck. And there are still new market barriers being imposed, such as the impediments to the export of products of animal origin by the European Union (read more here) and also the tariffs that can be implemented by the US via investigation under section 301 of US trade law (read more here), which indicate the need for greater diplomatic effort and possibly production adjustments to demonstrate compliance with trade rules.

In short, the positive results in agribusiness demonstrate the sector's high production capacity, but the current scenario indicates that this performance has not necessarily translated into profitability for producers. Relative production prices have consistently been lower than the evolution of costs, largely pressured by exogenous shocks. But, at the same time, they reveal structural problems that reinforce the need for advances in risk management, precisely in a context made difficult by high interest rates. This combination should begin to impact future harvests, as a result of the difficulty in making necessary new investments. And from there, this "storm" could be reflected in macroeconomic data.

In this context, public and private responses need to go beyond emergency measures aimed at times of crisis. The central challenge is to address structural bottlenecks related to dependence on imported inputs, logistics, storage, credit, and more adequate risk management. Brazilian agribusiness has once again demonstrated its extraordinary capacity to produce and generate foreign exchange. However, the sustainability of this performance will increasingly depend on the ability to reduce vulnerabilities that remain hidden during periods of prosperity, but which emerge strongly whenever the economic and geopolitical environment becomes less favorable.

About the author:

Leandro Gilio Leandro is a professor and researcher at Insper, and is part of the research group at the Global Agro Center (Insper Agro Global). He is an economist with a master's and doctorate in Applied Economics from the University of São Paulo and experience in research related to agribusiness.

*The text above is the responsibility of the author and does not necessarily reflect the opinion of Insper Agro Global.