Soybean farmer's profit margin drops by half in four years

In recent years, soybean production has experienced sharp fluctuations in revenues, costs, and margins. A study by Serasa Experian shows how this pressure puts pressure on the financial health of producers, who have seen their profit margins fall by half over the past four years.

The result reflects the combination of lower prices, still-high costs, and productivity declines, factors that reinforce the need for even more technological risk management, based on data and with real-time monitoring for the entire chain.

The sensitivity analysis was constructed using revenue and cost data (inputs, pesticides, leases, labor, etc.) collected in major Brazilian municipalities over the past five years and combined with productivity maps produced by Serasa Experian for the same period in these regions. Based on this, four analysis categories (below) were created to understand the impact on margins:

• producers with their own land and no need for financing;

• producers with their own land and 100% financed costs;

• tenant producers without the need for financing;

• tenant producers and 100% financed costs.

Compared to the last five harvests, the 2021/22 cycle marked the peak of profitability for the producer, with an average revenue of R$8.465,03 per hectare, driven by the price of the bag above R$150 and, in some cases, exceeding R$175. However, productivity fell 7% due to adverse weather conditions.

In the following years, the reality changed: in 2023/24, revenue per hectare fell 15% compared to the peak of R$8.465,03 recorded in 2021/22, reaching R$6.922,12, accompanied by a 3% drop in productivity.

Costs also weighed heavily. Fertilizer and pesticide prices rose sharply between 2021 and 2022, driven by the pandemic and the war in Ukraine. The cost per hectare peaked in 2022/23: R$5.713,62 for producers with their own land and R$7.505,49 for leaseholders. Even with a slight subsequent decline, prices remain high.

This mismatch directly impacted profitability. For owner-operated producers, the average margin, which was 48,6% in 2020/21, fell to 29,6% in 2022/23, and recovered slightly to 35,7% in 2024/25.

For lessees, the situation was even more critical: from 27,2% in 2020/21 to just 7,3% in 2023/24, with a partial recovery to 14,8% in 2024/25. Scenarios with full financing of costs in the credit market further increase this pressure, reducing margins to minimal levels.

"Brazilian agribusiness is a global benchmark in productivity, but to maintain global competitiveness, it's essential that risk governance matches this level of excellence. Today, we have much more accurate and accessible analytical resources than just a few years ago, enabling us to support producers in times of greater volatility and protect the credit system as a whole," says Marcelo Pimenta, Head of Agro at Serasa Experian.