The Brazil Factor

Can U.S. Soybeans Still Compete?

Heading into the 2026 planting season, soybeans seem like the topic to discuss. Yet, I’ve found myself wondering if anyone is still interested in the conversation. Even as the market rallies, growing season decisions are anticipating a further compression of profits. A repeat of the same story we’ve been circling for quite some time.

The facts remain the same. China hasn’t officially agreed to increase soybean purchases.  Seeds, fertilizers and manpower are still costly. Farm incomes are expected to decrease this year despite $11 billion in bridge payments.  And, rural farm families continue to watch their vocations caught up in the global crossfire of trade negotiations. There is some new optimism as oil prices rise.

On a positive note, soybean crush facility capacity is increasing with new infrastructure set to be up and running as we get further into 2026. Insurance options are favoring soybeans over corn this year thanks to biofuel expansion and a 2025 surplus of corn. The market appears to be demanding more soybeans.

Brazil is still in our periphery. The country, once dependent on food aid from the United States, is steadily increasing its agricultural exports, above U.S. levels. With cheaper goods available to global markets they continue to disrupt U.S. trade. China, the largest buyer of soybeans, has turned their eyes towards South America.

It's the Brazil factor that keeps grabbing my attention and engaging me in further conversation. What has contributed to their agricultural boom and could the U.S. take a page from their playbook? Or, does the United States have an entirely different set of variables to contend with?

Reasonably Priced Land- Brazil’s Agricultural Success

How did Brazil transform itself from a country dependent on food imports and aid into an agricultural powerhouse on the global stage? Before infrastructure development and technological advancement investments were made, Brazil focused on expanding arable acreage and invested in seed research to increase yield. They achieved their goal by converting degraded soil into farmland. In fact, this expansion is responsible for 50% of increased output.  Coupled with soil health, seed genetics, and double cropping Brazil has transformed it’s national economy through agriculture.

Mimicking Brazil by creating more farmland isn’t in the cards for the U.S.  The United States isn’t having a problem producing soybeans. We have the land and infrastructure to produce in abundance. However, unlike Brazil, where land is still underutilized in many regions, land use in the United States tends to be competitive. The U.S. is fully utilizing land and agriculture must vie for acreage and resources with energy, industry, and urban expansion. This is increasing demand for oilseeds. While the United States slowly gives land over to other projects, Brazil could still convert 100 million acres into farmland. Similarly, the U.S. tends to lead the way when it comes to seed genetics and research devoted to producing more on existing arable acreage.

Double Cropping Gives Brazil an Edge

Where we could perhaps take a page out of the Brazil playbook is off-season growing. Currently, Brazil benefits from double growing seasons in sub-tropical regions. In the past, fall planting hasn’t been a feasible option for U.S. growers worried the risk of frost is too great if seeds are planted too early in the spring or too late in the fall.  

Today, the concept of double cropping has taken hold with southern farmers looking to maximize usage per acre. If corn crops are planted early, in mid March, a fall soybean crop is also feasible before winter temperatures threaten yields. Multiple crops create more expenses as seed prices are not expected to drop, but the method could keep both corn and soybeans profitable for U.S. farmers able to harvest two times per year. 

The real issue for the United States is our ability to sell soybeans at a competitive price. Adding fall or winter crops doesn't automatically spell profit. Brazil made more farmland and made it affordable, tackling one of the many high costs of farming.  In 2023 Brazilians paid $44.58 per acre while Americans paid $182 per acre. Due to less competition for land use, Brazilians also farm under fewer regulations than American growers which contributes to lower production costs.

Seed Cost Comparison

While land is one of the largest expenses for U.S. soybean farmers, it may not be the expense we can realistically focus on reducing. After land, equipment and seeds represent the next largest expenses.  Both Brazilian and U.S. farmers have access to high quality seed varieties, modified to increase yields based on specific growing conditions.

Yet, Brazilian farmers pay as much as one-third less than American farmers do for seeds. In the U.S., seed genetics are considered intellectual property and can be protected. In Brazil enforcement of these intellectual property rights is less stringent which can lower seed costs.

Gaining competitive ground might not be a question of soil science or even genetics, but rather a closer examination of regulatory policy and economics.  Seed prices have climbed 260% since 1997.  The high cost of seeds is another high cost that makes American farmer less competitive in global markets. The size of the Brazilian market also has seed companies paying attention to the region and developing new varities specifically for Brazil. After so much America investment in seeds and seed technology, I'm not sure that U.S. farmers ever expected to lose this competitive advantage to Brazil.

Building a competitive strategy involves scrutinizing the high cost items of the soybean growing process and determining the most feasible way to decrease expenses. Brazil's success can largely be attributed to tackling one major issue at a time. First they developed farm land and made it affordable. Second, they increased the infrastructure to support more farming. Of the high ticket items, land, seeds, equipment and other inputs, is there one element that if we focus on entirely could bring the U.S. more competitive without harming American industry?