Rapid crop expansion in South America, specifically Brazil, has challenged U.S. competitiveness over the past decade. Further expansion of South American acreage is expected to remain a headwind for U.S. crop markets in the upcoming 2025/26 season. Total crop output could reach a record 353.8 million metric tons (MMT), led by strong soybeans, corn, and cotton production.
Soybean planting growth continues
The U.S. and Brazil compete to meet global soybean demand, primarily through exports. Brazil’s soybean acreage is expected to increase by 3.6 percent in the upcoming season, according to Brazil’s National Supply Company (Conab). Brazil has accelerated its total soybean acreage over the past decade, averaging a 4.4 percent annual growth rate since 2014. In earlier years, some expansion was linked to deforestation in the Amazon, as clearing forest for cattle or crops was historically cheaper than developing already-cleared land.
However, the pace of direct deforestation for soy slowed significantly after 2006, following government enforcement measures and the soy moratorium signed by major grain traders. Since then, most soybean growth has come from converting underutilized pasture or fallow land, allowing production to continue rising despite policy changes.
Rural credit availability has played a significant role in the country’s grain expansion, resulting in a 205 percent increase in total crop output over the past 20 years. Government subsidies funded seed, fertilizer, and chemical inputs, as well as long-term investments in infrastructure, machinery, and technology.
Farmers took advantage of incentives to boost acreage and improve yields. This year, Conab forecasts soybean production to reach a record 178 MMT, up from the 2024/25 record of 171 MMT. Total production has increased 76 percent over the past decade.
Lower yields to cap higher corn acreage
Conab forecasts the 2025/26 corn crop one percent lower at 138.3 MMT. Acreage is expected to increase by 3.5 percent due to higher domestic demand, though yields are expected to offset the growth in plantings. Brazilian corn yields benefited from exceptional weather this past season, driving corn production to a record 140 MMT.
Due to its geography, Brazil’s agricultural production supports two corn crop seasons. The first season corn crop is planted from October to December and harvested from February to June. The crop accounts for 27 percent of Brazil’s total crop production.
Brazil’s second (winter) corn crop, also known as the Safrinha corn crop, is planted from January through February and into March. The winter corn crop planting takes place after the country’s soybean harvest, where the crop is primarily grown in Mato Grosso.
Brazil cotton production to set another record
Brazil’s cotton acreage has more than doubled over the past decade. Like corn, the country has a “Safrinha cotton” crop that allows farmers to maximize land use by planting cotton after the summer soybean harvest. Economic incentives, a favorable climate, and technological advancements have helped bolster cotton production over the past 10 years.
A profitable outlook for farmers is expected to drive higher cotton plantings this season. Conab forecasts cotton acreage to increase by 3.5 percent, driven by higher acreage in Bahia, Piaui, Minas Gerais, and the Tocantins. Total production is expected to increase 0.7 percent to a record 4.09 million metric tons.
Crop trade dynamics
Brazil’s soybean exports continued to progress at a rapid pace this calendar year, running 3.7 percent ahead of last year, according to Brazil’s Ministry of Development, Industry, Trade, and Services.
Brazil is expected to export a record 112 MMT during the 2025/26 season, driven by large supplies and strong demand from China. Large investments in Brazilian infrastructure have enabled China to become the primary beneficiary of the rapid expansion of soybeans in South America.
Brazil’s corn export growth stalled in recent years, primarily due to larger domestic usage for biofuel production. In August, Brazil’s corn exports totaled 6.85 MMT, up from a year ago. However, shipments between January and August are down 12.2 percent year-over-year and running at the slowest pace in four years.
The percentage of corn used in ethanol production has rapidly increased since the 2016/17 season. Domestic usage is likely to challenge exports amid supportive domestic policies for ethanol.
Brazil exported a record amount of cotton in the 2024/25 marketing year, totaling about 2.88 million metric tons, according to monthly trade data. Brazil’s cotton exports have backed off in recent months, as overall demand from China declined. Brazil has also had to diversify its cotton export program due to lower purchases from China.
The latest export campaign saw a nearly 200 percent increase to Pakistan, a 59 percent increase to Turkey, and a 46 percent jump in shipments to Bangladesh. Brazil is forecast to ship 3.1 MMT in 2025/26, surpassing U.S. exports for a third straight year, according to the USDA.
U.S. significance
Strong economic incentives propelled Brazilian crop production to new all-time highs over the past decade. Going forward, rural credit availability remains strategic not just for boosting output, but for steering expansion toward sustainable practices.
Continued investment in infrastructure, technology, and market access will likely sustain Brazil’s trajectory of record production across soybeans, corn, and cotton, further solidifying its position as a global agricultural powerhouse. Brazil’s record-breaking acres and dual-season crops are quietly rewriting the rules of global grain trade, forcing the U.S. to develop more partnerships and trade flows.
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