Producers' margins are expected to remain under pressure until 2027

Rabobank Brasil has released a new analysis on the fertilizer market and the outlook for rural producers. According to the survey, conducted by Bruno Fonseca, an inputs sector analyst, the combination of rising operating costs and falling commodity prices is expected to result in another season of compressed margins in the world's main agricultural regions, a trend that could continue until mid-2027.

According to the study, the scenario is similar to that observed in 2024, when farmers were already facing shrinking margins due to devalued commodities. However, this year, pressure intensifies in a more complex global environment, marked by geopolitical tensions, tariffs imposed by the United States, and rising production costs.

The analysis projects that the 2026 harvest will also be challenging, particularly due to the impact of rising fertilizer prices and high interest rates. Although some reduction in crop protection costs is expected, overall operating expenses remain on an upward trajectory, which is expected to affect producers of soybeans, corn, and other large-scale crops.

In terms of production, the report highlights that, even with tighter margins, farmers remain committed to investing to maintain or increase productivity. Projections indicate another record corn and soybean harvest, driven by expansion in key producing regions. This growth, however, is likely to intensify downward pressure on commodity prices in a market already marked by dwindling global inventories.