Brazil to halt soybean area expansion after 20 years

Although the bank does not expect a reduction in the planted area, it believes that the incorporation of new land will lose momentum.

According to the report, the 2025/26 crop concludes a long period of expansion, with around 49 million hectares planted and a record production of approximately 182 million tonnes.

For 2026/27, the initial forecast is 178 million tonnes, reflecting a stabilisation of the planted area and an expectation that yields will return to levels closer to the historical average.

“After more than 2 decades of sustained growth, soybean planted area expansion in Brazil is expected to pause in 2026/27, marking an important change and a possible turning point in farmers’ strategic focus,” said Marcela Marini, Senior Grains and Oilseeds Analyst at Rabobank and author of the report.

Turning point for Brazil’s soy sector

The change represents a turning point for a sector that has established Brazil as the world’s largest soybean producer and exporter.

Between the 2000/01 and 2025/26 seasons, the planted area expanded by an average of around 4% per year, driven by pasture conversion, infrastructure investment, technological advances and favourable market conditions.

Over the same period, Brazil’s share of global soybean production increased from approximately 28% in 2010 to around 42% in 2026. Its share of global exports also reached almost 60%.

The report describes that this cycle began to lose momentum from the 2022/23 season onwards.

More expensive fertilisers, falling international soybean prices, the appreciation of the Brazilian real during part of the period and a high-interest-rate environment reduced the economic incentives for expanding the planted area.

“Farmers have shifted their focus from expanding the planted area to preserving cash, managing risk and optimising land use,” Marini said.

According to her, this does not represent a loss of the structural potential of Brazilian soybean production, but rather a change in the sector’s growth model.

Land asset market adjusts to new reality

Rabobank also believes that the more restrictive financial environment is beginning to change the dynamics of the land market.

The need for liquidity among some producers has increased the supply of properties available for sale or lease.

This movement is likely to reduce the pace of opening up new areas, particularly through pasture conversion.

In the author’s assessment, this process should encourage more efficient use of land already incorporated into agriculture.

“Future growth will increasingly depend on productivity gains and more intensive land use, particularly through second-crop systems and improvements in operational efficiency, rather than the incorporation of new agricultural land,” she said.

International market impact

According to Rabobank, the slowdown in the expansion of Brazil’s soybean planted area could also have effects on the international market.

As Brazil accounts for the largest share of global soybean production and exports of the commodity, slower supply growth is expected to contribute to a better balance between supply and demand and to a reduction in global stocks.

The report stresses that this does not mean the country will lose its leading position. Production is expected to remain at high levels, although at a slower growth rate than in recent years.

In the domestic market, slower supply growth could provide moderate support for premiums on Brazilian soybeans.

Risks beyond farmers’ control

Marini points out, however, that the initial estimate for the 2026/27 crop assumes a normalisation of yields but does not yet incorporate the possible climate impacts associated with El Niño.

According to her, recent episodes of the phenomenon have significantly reduced yield potential in important agricultural regions of Brazil.

In addition to the weather, the report highlights that producers’ profitability will continue to depend on exchange rate movements, fertiliser costs, credit conditions and geopolitical tensions.