Producers are under pressure from multiple fronts.
In Brazil, the number of farms being seized by creditors for debts and put up for auction is rapidly increasing, Reuters reports. Almost one in five agricultural loans in the country is already considered problematic.
Producers are under pressure from multiple fronts. Grain prices have fallen, interest rates remain very high, and costs for fertilizers, fuel, and other resources have only increased. To this, unstable weather is added, becoming less and less favorable due to climate change. As a result, more and more farms in Brazil are going bankrupt, and creditors are increasingly seizing farms for debts.
Brazilian farmers are now preparing for a possible "super El Niño" – a sharp warming of surface waters in the Pacific Ocean that alters weather patterns in various regions of the world. It could impact yields and further reduce farmers' incomes. Additionally, the sharp rise in fertilizer prices during the war in Iran has forced more Brazilian farmers to temper their plans for new plantings.
The southern state of Rio Grande do Sul has been particularly hard hit. It is one of the regions where farmers most frequently default on loans. In 2024, the state experienced catastrophic floods. These were influenced by climate change and that year's El Niño, according to a study published in January in the scientific journal NPJ Natural Hazards, part of the Nature journal group.
Problematic debt on loans issued under Brazil's agricultural credit system has more than quadrupled in two years. By the beginning of this year, according to the Central Bank of Brazil, it reached 171.2 billion reais, or 33 billion dollars.
The share of problematic debts has risen to 19.6% of all outstanding agricultural loans. Two years ago, it was only 5.5%, according to central bank data.
"Debt in the agricultural sector is currently in an extremely difficult situation," said Guilherme Campos, Secretary of Agricultural Policy at the Brazilian Ministry of Agriculture, to Reuters.
Brazilian creditors have become tougher on problematic loans. If farmers do not repay loans, banks are increasingly seizing agricultural lands that served as collateral for these debts. This is leading to a rise in the number of rural properties being put up for auction. This is indicated by data from the real estate auction aggregator site Leilao Imovel, provided to Reuters.
The number of such auctions has sharply increased. In 2025, 14,219 rural properties were auctioned, which is 30% more than the previous year.
The number of properties being seized and sold through expedited extrajudicial procedures is growing particularly quickly. Last year, they nearly doubled to 2,398.
However, the data cannot be directly compared year on year, noted Leilao Imovel co-founder Andre Figueiredo. According to him, in 2025, the site studied about 7% more auction houses. But the largest auction organizers have been providing data since 2019, and the overall picture is still clear: financial pressure on Brazilian farmers has noticeably increased in recent years.
"The number of rural properties at auctions has significantly increased," said Andre Figueiredo. He added that regions where soybeans and other grain crops are grown have been hit hardest.
The number of bankruptcy filings in the agricultural sector rose by 56% in 2025. The previous year, it more than doubled. This is stated in data from the credit agency Serasa Experian.
Producers are still trying to recover from a series of blows, noted Marcelo Pimenta, CEO of Serasa Experian for agriculture.
According to him, farmers are struggling more and more with debts due to bad weather, falling prices for agricultural exports, especially soybeans, and the sharp rise in the base interest rate in Brazil. Over five years, it has risen from 2% to 15%.
"The outlook for the future does not look good," added Marcelo Pimenta. "Interest rates are very high, and it is unclear where commodity prices will go. The likelihood of another blow due to climate issues is very high."
A farmer from Rio Grande do Sul, who requested anonymity, said that after extreme weather destroyed the harvest, it became almost impossible for the family to service the debt with "unmanageable" interest rates. Recently, the credit agency took more than half of their family farm.
"Climate change is serious, that’s obvious. Today we cannot produce due to heavy rains, tomorrow due to too much sun," said the farmer.
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