Drought Cuts Brazil’s Soybean Forecast, Raising Global Supply Concerns

Brazil, the world’s top soybean producer and exporter, has lowered its production forecast for the 2024/25 season due to drought in key agricultural regions.

AgRural, a leading agribusiness consultancy, announced on February 24 that it now expects production to reach 168.2 million metric tons, down from the 171 million estimated in January.

This adjustment reflects poor yields in southern states like Paraná, Mato Grosso do Sul, and Rio Grande do Sul. Insufficient rainfall has hit crops during critical growth stages in these regions.

While southern regions struggle, central and northern areas such as Mato Grosso are thriving. Favorable weather has boosted yields there, with Mato Grosso expected to produce over 50 million metric tons for the first time.

These regional disparities highlight Brazil’s dependence on weather conditions and its vulnerability to climate variability. Farmers have harvested 39% of the planted soybean area so far—on pace with last year’s 40%—but uneven progress remains a concern.

Delayed harvesting in some areas could disrupt the planting of the second corn crop (safrinha), which accounts for three-quarters of Brazil’s total corn output and relies on timely soybean harvests.

Brazil’s Soybean Harvest

Despite the challenges, Brazil remains poised for one of its largest soybean harvests ever. Earlier estimates from Rabobank suggested a record-breaking 170 million metric tons this season due to expanded planting areas and favorable conditions in central regions.

However, AgRural’s revised forecast underscores the impact of recurring droughts in southern states. This development carries global implications. Brazil supplies nearly 60% of global soybean exports, making its production levels critical for international markets.

A reduced harvest could tighten supply chains and push prices higher. This would affect industries reliant on soybeans for animal feed and biofuels.

The situation underscores the need for investments in irrigation and climate-resilient farming practices. These investments are essential to stabilize production and safeguard Brazil’s role as a global agricultural powerhouse.