Corn prices lose ground over five years while production costs climb in Mato Grosso

Corn has accumulated significant real-term losses over the past five years in Brazil's leading producing state, even as input, energy and logistics costs have risen steadily. The squeeze is eroding farm margins in Mato Grosso and raising questions about the crop's profitability.

Corn is going through an unfavorable price cycle in Mato Grosso. While nominal and real quotations have retreated over a five-year horizon, operating costs have moved in the opposite direction, driven mainly by higher prices for fertilizers, crop protection products and fuel, items that account for a large share of total production expenses.

This gap between revenue and expenditure is one of the key warnings for 2025/26 crop planning. Growers who do not restructure their cost base or secure forward sales contracts risk closing the season in the red, even if yields come in at historical averages.

The situation underscores the value of more active marketing strategies. Locking in part of the crop during seasonal price peaks, using hedging instruments and closely tracking the spread between farm-gate corn prices and freight costs to export terminals are all measures that become more critical when operating margins narrow.

Over the medium term, a price recovery will depend on factors such as the pace of Brazilian exports, domestic demand from the animal protein sector and the performance of the North American crop. Until those drivers align more favorably, the pressure on Mato Grosso producers is likely to continue.