Brazil's rural bad debt rate soars to 19.6%, farm auctions surge by 30% due to dual pressure from climate and high interest rates

(1) Bad rural credit debt in Brazil has surged more than fourfold within two years to 171.2 billion reais (about 33 billion USD), with the proportion of outstanding agricultural loans soaring from 5.5% two years ago to 19.6%. (2) According to data from auction aggregation websites, the number of rural properties auctioned in Brazil in 2025 has jumped to 14,219, a 30% increase compared to the previous year, and the number of properties seized and auctioned in out-of-court proceedings has nearly doubled to 2,398. (3) Bankruptcy filings in the agricultural sector more than doubled in 2024 and are set to rise by another 56% in 2025. Rio Grande do Sul is one of the areas hardest hit by farmer defaults, following catastrophic floods in the state in 2024. (4) Brazil’s benchmark interest rate climbed from 2% to 15% in just five years, while weak export prices for agricultural products such as soybeans, soaring fertilizer prices during the Iran conflict, and unpredictable extreme weather have all combined to erode farmers’ ability to repay debts. (5) Farmers are now preparing for a potential “super El Niño” weather pattern, which may further harm crop yields. One local farmer stated that climate change is obvious, as excessive rainfall or too much sun leads to failed production, and climate factors have pushed them into their current predicament.