As global corn markets become increasingly competitive, new research from Purdue University suggests that American corn farmers face a growing challenge from Brazil, where a unique production system is helping producers maintain a cost advantage despite rising input expenses.
The study, conducted by Purdue Center for Commercial Agriculture researchers Joana Colussi and Michael Langemeier, found that U.S. corn production costs remained consistently higher than those in Brazil between 2020 and 2024, largely because of soaring land values and overhead expenses that continue to weigh on American farms.
While the United States remains the world’s largest corn producer and one of its dominant exporters, Brazil has emerged as an increasingly formidable rival over the past decade. Much of that growth has been fueled by the expansion of “second-crop” corn, known locally as safrinha, which is planted immediately after soybean harvests and now accounts for nearly 80 percent of Brazil’s corn production.
That system allows Brazilian farmers to spread fixed costs across two crops grown in the same year, creating a fundamentally different economic model than the one used by most U.S. producers.
“The role of second-crop corn in Brazil helps explain these differences,” Colussi and Langemeier wrote in their analysis. “Land and some machinery-related costs can be spread across soybeans and corn within the same production year.”
Using standardized data from the international agribenchmark network, the researchers compared a representative corn farm in Iowa with a typical operation in Mato Grosso, Brazil’s largest agricultural state and a major center of corn production.
The findings reveal a widening contrast in how farmers in the two countries absorb economic shocks.
Between 2020 and 2024, production costs on the Brazilian farm more than doubled, rising from $69 per metric ton to $147 per ton. Much of that increase stemmed from higher fertilizer prices, exacerbated by Brazil’s heavy dependence on imported nutrients and disruptions triggered by the Russia-Ukraine war.
Yet even with those increases, Brazilian production costs remained below those of the Iowa farm, where costs climbed from $160 per ton in 2020 to $195 per ton in 2024.
Researchers attributed much of the U.S. increase to rising land costs, labor expenses, machinery ownership costs and broader inflationary pressures that followed the COVID-19 pandemic.
“The Iowa farm had higher total costs throughout the 2020-2024 period, largely reflecting higher overhead and operating costs, including land, machinery, labor and capital-related expenses,” the report said.
The contrast is particularly evident in each country’s cost structure.
On the Brazilian farm, direct input expenses such as fertilizer, seed and crop protection products accounted for more than half of total production costs every year studied. In the United States, overhead expenses — especially land costs — represented the largest share of total costs in most years.
That distinction became increasingly important as corn prices retreated after the commodity boom of 2022.
Both farms experienced their strongest financial performance that year, when Chicago corn futures surged above $6 per bushel amid global supply concerns following Russia’s invasion of Ukraine. The Iowa operation generated an economic profit of about $60 per ton, while the Mato Grosso farm earned roughly $45 per ton.
But as grain prices fell, profitability deteriorated on both sides of the equator.
By 2023 and 2024, both farms were losing money when all economic costs were considered. The Iowa farm recorded losses of $28 per ton in 2023 and $21 per ton in 2024, compared with losses of $14 and $12 per ton, respectively, for the Brazilian operation.
The sharper decline in U.S. profitability reflects the challenge of managing high fixed costs when commodity prices weaken. Expenses tied to farmland, machinery ownership and capital investments typically adjust much more slowly than market prices.
Brazilian farmers, meanwhile, benefit from the ability to allocate some of those costs across both soybean and corn production.
Still, the researchers caution that Brazil’s apparent advantage is not without risk.
Second-crop corn is planted during a narrow window after soybeans are harvested and depends heavily on favorable rainfall patterns. Delays in soybean harvest or adverse weather conditions can significantly reduce yields, making the system more vulnerable to agronomic risk.
“Profitability in Mato Grosso is also influenced by the agronomic risks associated with second-crop production,” the authors noted.
Despite Brazil’s growing influence, the study emphasizes that the United States continues to hold major competitive advantages.
American farmers benefit from higher productivity, advanced production systems and significantly stronger yields. U.S. corn yields are more than twice as high as Brazil’s on average, reflecting decades of investment in genetics, technology and agronomic management.
But the research suggests that Brazil’s ability to expand acreage, produce a second annual crop and maintain lower overall production costs is reshaping the global competitive landscape.
For U.S. corn growers facing compressed margins, elevated land costs and uncertain grain prices, that shift presents a growing challenge that is likely to extend well beyond the current market cycle.
As Brazil continues to expand production and improve transportation infrastructure linking its interior farm regions to export markets, Purdue researchers conclude that competitiveness in global corn trade will increasingly depend not only on yields, but also on which production systems can most effectively manage costs in a volatile agricultural economy.
