Brazil's grain harvest is projected to decline to 346.6 million tonnes in 2027, a drop of 2.6% — or 9.2 million tonnes — from the previous year, according to a forecast released by the Brazilian Institute of Geography and Statistics (IBGE) on Friday. The projection marks a notable reversal after 2026, when output is estimated to reach a record 355.8 million tonnes.

Planting Area and Output Projections

The area planted with grain crops is projected to reach 83.2 million hectares in 2027, a marginal decrease of 78,500 hectares compared to 2026. While the reduction in planted area is relatively small, the steeper fall in output reflects the anticipated impact of adverse weather and rising input costs rather than a large-scale withdrawal from cultivation.

Soybeans remain Brazil's dominant crop, with output in 2026 expected to reach 175 million tonnes. Corn ranks second at an estimated 145.5 million tonnes — a critical feedstock for both animal feed and ethanol production. Rice and wheat output in 2026 are estimated at 11.3 million tonnes and 5.3 million tonnes, respectively.

What Drove the 2026 Record

Favourable weather conditions across most of Brazil's major grain-producing states underpinned the strong 2026 harvest, pushing total output up 2.8% from the 346.1 million tonnes recorded in 2025. The record-breaking season set a high baseline that the 2027 crop cycle is now expected to fall short of.

El Niño and Rising Costs Cloud 2027 Outlook

The El Niño climate phenomenon is expected to disrupt growing conditions in key producing regions in 2027, with shifting rainfall patterns potentially weighing on yields. This comes amid a broader cost squeeze: higher global oil prices are pushing up farm production expenses, including energy, fertilisers, crop protection products, and fuel, compounding the climatic risk. Notably, this dual pressure — weather shock plus input-cost inflation — mirrors challenges that have periodically crimped Latin American harvests over the past two decades.

Brazil's Role in Global Food Supply

Brazil is among the world's largest agricultural producers and exporters, with soybeans and corn accounting for the bulk of its grain output. Any significant shortfall in Brazilian supply has direct implications for global commodity markets, animal feed prices, and food import-dependent economies across Asia and Africa. The IBGE's 2027 forecast, if realised, would return output levels roughly to those of 2026 before the record year — a correction rather than a collapse, but one with tangible downstream effects on trade flows and food prices.

All eyes will now be on seasonal weather monitoring as the 2027 planting season progresses and updated IBGE estimates emerge in coming months.