Brazil Agribusiness Firms Post Strong Q2 Profits on Record Harvest, Exports; U.S. Tariffs Loom

Strong exports, diversification, and a “full” grain harvest were the factors that ensured profits for most agribusiness companies reporting second-quarter results this year. In addition, operational efficiency and hedging strategies helped soften the impacts of price and currency volatility, analysts said.

Analysts note that the U.S. tariff hike is likely to influence upcoming quarterly results in different ways. Beefpackers may limit losses thanks to operations abroad; sugar mills selling organic sugar to the U.S. will be the hardest hit, while grain companies could benefit from a potential increase in Chinese demand for soybeans.

A Valor Data survey showed that among the 24 companies analyzed, only four posted losses between April and June: Heringer, Vittia, Jalles Machado, and Raízen. All others were profitable, and only five earned less than in the same period of 2024.

The most significant gains were at FS, which swung from a R$40.3 million loss in Q2 2024 to a R$256 million profit; and Agribrasil, whose profit rose 715% to R$16 million, supported by record soybean and corn harvests.

“The sector benefits from Brazil’s structural position as a competitive global player in grains, meat, and sugar, which sustains demand even in adverse scenarios. That explains why few companies posted losses, reinforcing the resilience of Brazilian agribusiness,” said Terra Investimentos analyst Régis Chinchila.

Exports to key markets like China and the U.S. stood out, while portfolio diversification also made a difference — as seen with São Martinho’s corn ethanol and SLC’s cotton.

São Martinho was one of the few sugar mills that still posted a profit between April and June, although it was 40.9% lower year-on-year, with the setback in the sugarcane crop weighing on the results. Net income came to R$62.8 million.

SLC Agrícola posted R$139.8 million in net profit, down 56.5% from a year earlier, pressured by non-recurring effects, though adjusted EBITDA rose 115.6% with record commodity sales.

In the protein segment, analysts highlighted resilient beef exports despite higher cattle prices and a 10% extra U.S. tariff since April. Poultry faced bird flu restrictions after a May outbreak at a commercial farm, though exports began recovering before the end of Q2.

BRF reported net income of R$735 million, down 32.8% year-on-year. Seara, JBS’s Brazilian poultry and pork unit, saw revenue fall 2.5% to US$2.16 billion, though adjusted EBITDA rose 1.2% to US$391.8 million. Overall, JBS posted US$528.1 million in profit, up 60.6% from a year earlier, boosted by U.S. unit Pilgrim’s Pride.

For sugar companies, the tariff shock is harsher. Jalles Machado estimates that it will lose between R$20 million and R$25 million due to the reduced competitiveness of its organic sugar exports to the U.S.

Meanwhile, grain producers may benefit from the U.S.–China tariff war, as Brazilian soy could gain market share from U.S. competitors.

Source: Globo Rural

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