THE GLOBAL WINDOW OF TURKISH FOOD AND AGRICULTURE The Global Window of Turkish Food and Agriculture Sector
Related Articles
July 2026…
Brazilian agricultural cooperatives are emerging as one of the biggest winners from the recent financial downturn affecting parts of the country’s agribusiness distribution sector. While many input resellers have struggled with shrinking margins, rising producer defaults and mounting financial pressure, cooperatives have steadily expanded their market share by offering producers an increasingly diversified ecosystem of products, services and financial solutions.
According to Felipe Treitinger, CEO and founder of agribusiness education hub Cumbre, the industry’s biggest transformation has not been about who sells the most crop inputs, but about who has built the strongest long-term relationships with farmers.
“For years, we debated who would sell more agricultural inputs. But perhaps the real question has always been who could build the strongest ecosystem around the farmer,” Treitinger said.
He argues that while much of the market focused on prices, rebates and market share, many cooperatives quietly strengthened a business model that has become increasingly difficult to replicate.
Although tax incentives, governance structures and Brazil’s long-established cooperative model have certainly contributed to their growth, Treitinger said he believes that these factors alone do not explain the sector’s success.
“Cooperatives stopped being simple input distributors a long time ago,” Treitinger noted. “They invested in grain storage, origination, financing, supermarkets, agro-industries, seed production, animal nutrition, protein, ethanol and several other businesses that deepen their relationship with farmers, while reducing dependence on a single source of revenue.”
Meanwhile, many traditional input resellers continued relying on a business model heavily dependent on working capital, producer financing and increasingly compressed product margins.
Cooperatives Double Their Economic Relevance…
The structural shift is reflected in recent figures from L.E.K. Consulting. According to the firm’s latest study, Brazilian cooperatives increased their share of the country’s agribusiness GDP from 8.1% in 2019 to 15.4% in 2024, representing approximately 90% growth over five years.
The expansion occurred during one of the most challenging financial periods for Brazil’s agricultural distribution industry, marked by falling soybean and corn prices, tighter credit conditions and growing producer defaults.
According to Eric Emiliano, Partner at L.E.K. Consulting responsible for agribusiness and food sectors, this trend reflects a broader transformation in how Brazilian agriculture is financed.
The contrast became particularly evident after commodity prices retreated. Several major agricultural retailers, including AgroGalaxy, Lavoro and Belagrícola, entered judicial or out-of-court restructuring processes, while cooperatives continued expanding their operations and market presence.
Credit Model Under Pressure…
For Bruno Brandi, Senior Manager at L.E.K. Consulting, the downturn exposed structural weaknesses in part of Brazil’s agricultural retail sector.
“In many cases, input resellers had effectively become banks,” Brandi said. “They financed farmers through barter operations and extended payment terms. As default rates increased, that model reached its limits.”
Historically, agribusiness-related default rates hovered around 3%. According to the consultancy, they are now approaching 15%, surpassing levels recorded during Brazil’s agricultural crisis of 2016-2017.
“We’re seeing default levels roughly three times higher than the previous major downturn,” said Emiliano. “Farmers endured two consecutive crop seasons in which production costs increased faster than revenues.”
Against this backdrop, cooperatives have filled part of the financing gap by expanding credit programs, barter operations, technical assistance and integrated member services.
“Cooperatives create a complete ecosystem for farmers,” Brandi noted. “They finance production, purchase crops, provide storage and commercialize grain. That reduces default risk and strengthens long-term relationships.”
Ecosystem Becomes Competitive Advantage…
Treitinger believes this integrated model represents the fundamental difference between cooperatives and many independent distributors.
“The biggest difference was never selling fertilizers or crop protection products,” he added. “It was building a business capable of capturing value throughout the farmer’s entire journey, creating deeper relationships and making the organization far more resilient to agricultural cycles.”
Rather than depending primarily on input sales, cooperatives generate revenues across multiple business lines, including grain trading, industrial processing, retail operations, financial services and value-added agricultural production.
This diversification has provided greater resilience during periods of commodity price volatility and financial stress.
Next Phase: Industrialization and Expansion
According to L.E.K. Consulting, well-capitalized cooperatives are now accelerating growth through four strategic priorities:
- Industrialization of agricultural production;
- Expansion into biofuels;
- Geographic expansion into underserved regions;
- Acquisition of assets from financially distressed companies.
Industrialization allows cooperatives to capture more value from commodities already produced by their members, while investments in biofuels diversify revenue streams amid favorable market conditions.
The consultancy also expects cooperatives to play an increasingly active role in acquiring businesses undergoing restructuring, enabling territorial expansion and operational synergies.
While southern Brazil remains home to the country’s strongest cooperative network, L.E.K. identifies the Midwest and Southeast as regions offering the greatest growth opportunities due to their large agricultural markets and relatively lower cooperative penetration.
A New Competitive Landscape…
The evolution of Brazil’s agricultural cooperatives illustrates a broader transformation occurring across the country’s agribusiness value chain.
As digital technologies reduce product differentiation and financing becomes more complex, competitive advantage is shifting away from transactional input sales toward integrated service platforms capable of supporting producers throughout the production cycle.
For traditional input resellers, the challenge is becoming increasingly clear.
“Anyone who sells products will always have competitors,” Treitinger said. “Those who sell better decisions will build lasting customers.”
(Editing by Leonardo Gottems, reporter for AgroPages)
Source: agropages.com
