Brazilian agribusiness went through 2025 under the weight of historically high debt and a slower pace in the fertilizer market. This is the assessment of Eduardo Monteiro, country manager at Mosaic in Brazil and guest on the tenth episode of Raiz do Negócio, a podcast made in partnership between InfoMoney and The AgriBiz.
During the interview, Monteiro says that the sector’s numbers leave no room for doubt. The agribusiness financial debt is around R$188 billion, which is equivalent to approximately two and a half harvests of cash generation.
For him, this is a high level of leverage, aggravated by momentarily high interest rates. Although the basic rate is around 15%, he highlighted, the risk of agribusiness causes the final cost to exceed 20% per year. “This brings an additional challenge to the farmer, who is a segment that needs financing,” he stated.
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In the fertilizer market, the year started with optimism, but lost momentum at the end of the first quarter and beginning of the second. One of the main reasons was the limited availability of credit. Many purchase intentions signed with farmers did not materialize due to a lack of guarantees, the slower release of resources from the Safra Plan and greater demands from banks.
As a consequence, the expected growth of around 4% is unlikely to be confirmed. The estimate is now 1% to 2%, which represents 1 to 2 million tons more than last year. Monteiro highlights, however, a relevant point: this increase occurs in absolute tons. When converted into nutrients, the metric that really defines application to the soil, the volume will be very similar to the previous year.
Marathon, not sprint
Monteiro also recalled that agriculture is a cyclical sector, more like a marathon than a 100-meter race. And that, therefore, requires preparation. There are producers who took advantage of the pandemic and post-pandemic years to build up reserves, save and position themselves better. There were, however, those who leveraged more, suffered from climate events or adopted less effective risk management processes. This second group, although small, according to the executive, contributed to the significant increase in judicial recoveries throughout the year.
For him, the main way to overcome this environment is to invest in technology, increase productivity and generate more cash flow to be able to honor commitments. With around 90% of the harvest already planted and climate models indicating normality, he reinforces that 2025 offers no room for error: rigorous cost management, attention to exchange ratios and focus on profitability are essential to allow cash generation.
