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The Soy Sector Analyzer is an interactive tool designed to project the trajectory of the Brazilian soy sector and assess the resilience of representative soy producers amidst climate transitions.
The Soy Sector Analyzer is an interactive tool designed to project the trajectory of the Brazilian soy sector and assess the resilience of representative soy producers amidst climate transitions.
The Brazilian soy sector will face challenges in a transitioning world. By 2050, government, consumer and private sector responses to climate change, which we term ‘climate transitions,’ could drive a more than 15 percent decrease in soy pricing, putting a large proportion of today’s soy farmers at an over 60 percent risk of financial losses. Profitability shortfalls can be minimized by reducing production costs, land rent payments and greenhouse gas (GHG) emissions costs. Moreover, the opportunities provided by climate transitions are immense, especially given the diversified markets for soy products. Soy producers that invest in sustainable technology improvements, land ownership, reductions in emission intensity and diversified revenue streams from the bioeconomy could benefit substantially from climate transitions. A projected 88 percent increase in agricultural capital investment could unlock yield increases of at least 14 percent by 2050, improving land use efficiency across the Brazilian soy sector. Furthermore, despite a reduction in demand for ruminant meat feedstock, soy’s role as a significant contributor to the global plant protein supply, the plant-based oil supply and the biofuel supply could allow producers to capitalize on a more than 14 percent increase in projected global soy demand.
1. The Climate Transition Scenario Analyzer projects the impacts on the Brazilian soy sector across four modest and ambitious climate transition scenarios through 2050, in addition to a Business as Usual scenario representing the continuation of the status quo. Users can gain comprehensive insights into the topics discussed in our recent Brazilian soy reports (https://orbitas.finance/brazil-soy-report), including:
2. The Financial Stress Testing Simulator evaluates the likelihood of financial losses in Brazilian soy production based on hypothetical stress events that could impact yield, transportation costs and commodity pricing. These stress events are derived from climate transition projections and historical price and cost fluctuations.
3. The Transportation Reference Tool demonstrates the crucial role transportation and export port locations play in shaping transportation costs and profitability across the soy supply chain.
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