Agri-input Distribution in Brazil Enters a New Era, Says FESA Group

Brazil’s agri-input distribution landscape is undergoing a transformative phase, according to a recent study conducted by FESA Group, a prominent HR and executive search firm specializing in agribusiness. Focused on the Central-West and North regions of Brazil, the research reveals a sector that is moving beyond rapid expansion and is now grappling with operational and financial recalibration.

A Phase of Intense Growth (2018–2022)

Over the past five years, Brazil’s agri-input distribution market experienced a period of strong growth fueled by high commodity prices—particularly soybean and corn. Distributors and resellers expanded aggressively by opening new branches and through mergers and acquisitions. Capital inflows were abundant, driven by high margins and investor confidence in the sector’s profitability.

2023: The Tipping Point

The upward trajectory began to show signs of strain in 2023. The study highlights a sharp increase in default rates, some reaching double digits, coupled with a tightening of credit access. Companies faced a liquidity crunch, and operational inefficiencies became more apparent as sales slowed and inventories piled up. Numerous businesses in the region filed for judicial recovery (a legal restructuring process similar to bankruptcy protection), indicating a sector-wide financial correction.

Key Challenges Identified:

• Credit Access: Resellers struggled to secure favorable financing terms from banks and input manufacturers.
• Liquidity Management: Working capital constraints disrupted purchasing and fulfillment cycles.
• Sales Productivity: With farmers delaying purchases and shifting to cash-based transactions, sales teams came under pressure.
• Leadership Gaps: The fast-paced growth period created managerial gaps, particularly in financial governance and talent development.

A Shift Toward Governance and Maturity

FESA’s analysis suggests that Brazil’s agri-input sector is now transitioning from a phase of aggressive growth to one of structural reorganization and professionalization. The most in-demand roles today are in commercial leadership, financial restructuring, and internal controls. Companies are prioritizing strong governance, process automation, and experienced management over rapid geographic expansion.

“We’re seeing a clear emphasis on ‘maturity over velocity’ now,” notes FESA’s agribusiness partner. “The companies that will thrive are those willing to make tough decisions around governance, risk, and culture.”

Broader Implications for Latin America

While this study is focused on Brazil, similar trends are playing out across Latin America. Countries like Argentina and Paraguay are also facing input cost volatility, delayed payment cycles, and consolidation of retail distribution. The study underscores a regional need for distributors to become not just resellers, but strategic partners to growers, offering value-added services such as credit advisory, digital farming tools, and crop planning support.

Conclusion

The FESA Group report marks a turning point in understanding Brazil’s agri-input sector. From a market once dominated by expansion and optimism, companies are now navigating a landscape where resilience, structure, and long-term planning are paramount. As credit tightens and farmer behavior evolves, only those distributors who adapt quickly—with strong leadership and a governance mindset—will remain competitive in this new era.