Mar 23, 2026
Middle East Conflict Could Impact 2026/27 Crop Selection in Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
A study by the Mato Grosso Institute of Agricultural Economics (Imea) looked at the strong increase in price of urea and phosphate fertilizers due to the bottleneck in the Strait of Hormuz and how it might impact the 2026/27 crops in Mato Grosso. While the study focused on Mato Grosso, the conclusions could probably be applied to the Brazilian agricultural sector in general.
According to Imea, the fertilizer crisis hits the market at a sensitive time for Brazilian supply. Nitrogen fertilizer imports, which are used for corn production, usually gain strength from March with higher volumes in the third and fourth quarters. Phosphate imports, which are mainly used for soybean production, also start in March and peak during the second and third quarters.
Urea prices have increased approximately 30 to 35% since the start of the conflict in Iran, but according to Imea, farmers in the state have only purchased approximately 6% of their urea needs for the 2026/27 growing season, well below the historical average for this period, leaving them exposed to price swings.
Imea estimates that for high-tech corn production at the city of Sinop in northern Mato Grosso, a 30% increase in nitrogen fertilizer would increase the Effective Operating Costs (EOC) by 4.68%, equivalent to 5.9 sacks per hectare (5.6 bu/ac).
For soybeans the concern is focused on phosphate fertilizers. Last year, Brazil imported 40% of this type of input from Egypt and Israel. In Mato Grosso, the dependence is even greater: the two countries accounted together for 58.9% of the state's purchases of phosphates.
The price increases are hitting Brazilian farmers at the beginning of the buying cycle, and it could impact their crop selection for 2026/27. The first impact may be that farmers in southern Brazil choose to reduce their first corn crop acreage in favor of more soybeans and shift some of the first corn crop to safrinha instead. The purchasing of nitrogen fertilizer for safrinha corn production occurs later in the year and maybe fertilizer prices will decline by then. Nearly all the first corn crop production is consumed by the livestock industry in southern Brazil. Nearly all of Brazil's corn exports come from the safrinha production.
To reduce input costs for soybeans, Brazilian farmers could cut back on their phosphate applications and "mine" the existing soil fertility. If the weather cooperates during the growing season, soybean yields could still be satisfactory. Bottom line: high fertilizer prices could have a bigger impact on Brazilian corn acreage and production than on soybeans.