The Real Risk of 2026 Is Not Geopolitics. It Is Supply Chain Fragility in Brazil
Why European food companies sourcing from Latin America are preparing for the wrong problem
On January 3, 2026, global risk committees were jolted awake.
The United States confirmed a direct intelligence operation that resulted in the capture of Nicolás Maduro. The diplomatic fallout spread quickly across Latin America. Markets reacted. Headlines exploded. Emergency calls were scheduled.
For many European food companies sourcing from Brazil and the region, this moment crystallized what they believed would define 2026. Geopolitics.
But here is the uncomfortable reality.
Wars, elections, and diplomatic shocks rarely break food supply chains on their own.
Financial and operational fragility is what turns shocks into disruption.
And that fragility is already visible inside Brazil’s agricultural system.
The Risk Narrative Everyone Shares
Most senior executives are aligned on what they believe are the main risks for 2026.
Geopolitical instability in Latin America, specially after the Venezuela operation.
Extreme climate events disrupting harvests.
Regulatory pressure from EUDR enforcement.
Trade tensions between China, the US, and Europe affecting grain flows.
None of these concerns are wrong. They are obvious. They are loud. They dominate boardroom conversations.
The problem is not what companies are looking at.
The problem is what they are not.
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The Blind Spot. Financial Fragility Inside the Supply Chain
While executives debate geopolitics, a quieter risk has been compounding across Brazil’s agricultural backbone.
Credit stress.
Over the last eighteen months, Brazil’s agribusiness sector has experienced a sharp increase in defaults, judicial recovery filings, and credit tightening.
State lender Banco do Brasil, one of the largest financiers of farmers and agribusiness operators, reported record levels of non performing agricultural loans in 2025. Provisions increased. Credit criteria tightened. Liquidity became selective.
At the same time, requests for judicial recovery in agribusiness rose sharply. Data from credit agencies and sector analysts shows increases exceeding 100 percent in some segments, not only among producers, but also among intermediaries, input suppliers, and service providers.
This matters more than most sourcing teams realize.
Agriculture is a capital intensive business. Seeds, fertilizer, machinery, storage, transport, and export operations are financed months before revenue materializes. When credit tightens or disappears, production does not stop because of geopolitics. It stops because cash flow breaks.
And when cash flow breaks, contracts become irrelevant.
Why 2026 Is a Turning Point
Some executives will argue that financial stress in Brazilian agriculture is not new.
They are correct.
What is new is the context.
First, the geopolitical shock in Venezuela reinforced a false sense of where risk originates. It pulled attention outward, toward events that feel dramatic but remain external to daily operations.
Second, margins across several Brazilian crops have been compressed by rising costs, volatile prices, and uneven productivity. This weakens balance sheets over consecutive seasons, not in isolated years.
Third, the financial buffer that previously absorbed shocks has disappeared. Cheap credit is gone. Banks are less patient. Input suppliers are less flexible. Insurance does not cover liquidity gaps.
In 2026, there is no cushion left.
That is what transforms a long term vulnerability into an immediate risk.
Where Companies Are Getting It Wrong
Most European food companies believe they are managing supply risk properly.
Procurement focuses on price and volume security.
Sustainability teams focus on compliance and documentation.
Risk teams focus on geopolitical exposure and climate scenarios.
Each function does its job well.
Together, they miss the point.
If your risk model treats suppliers as scorecards instead of financial and operational entities, you are not sourcing. You are hoping nothing breaks.
A supplier can be fully compliant with EUDR requirements and still be one liquidity shock away from operational failure.
A producer can have excellent agronomic performance and still collapse if credit lines are pulled mid season.
A logistics partner can meet every audit requirement and still shut down if an upstream default cascades through the system.
Documents do not move soybeans. Cash does.
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The Questions Leaders Should Be Asking Now
Executives preparing for 2026 should pause and ask different questions.
Who actually finances my suppliers, beyond the first tier?
How leveraged are key producers and intermediaries in my supply chain?
Which actors depend on short term credit to operate?
What happens if a distributor or originator enters judicial recovery before harvest?
Do we have visibility beyond contracts into balance sheet health?
These questions feel uncomfortable because they challenge long standing sourcing models.
They also separate companies that absorb disruption from those that react to it.
A Different Lens for 2026
The central mistake companies make is assuming that the biggest risks are the most visible ones.
In reality, supply chains rarely break where everyone is looking.
They break where fragility has been quietly accumulating.
In Brazil and across Latin America, that fragility is financial and operational. It sits inside farms, intermediaries, logistics providers, and financing structures. It does not announce itself with headlines.
And by the time it becomes visible, it is already too late to manage reactively.
2026 will not punish obvious risks.
It will expose structural ones.
Companies that recognize this now will plan differently, source differently, and allocate capital differently.
Those that do not will spend the year explaining disruptions they never modeled.
PS: Most agricultural risks do not emerge in the field.
They emerge when financial and operational fragility is ignored in sourcing and risk decisions.
That is what my advisory work focuses on: helping food and ingredient companies sourcing from Brazil and Latin America identify and manage structural risk across finance, operations, governance, and incentives.
This is advisory for leaders accountable for continuity and results, not narratives.