SLC Agrícola Farm Day 2026: No questions on quality, but uncertainty on rain

Research evidence excerpt

SLC Agrícola Farm Day 2026: No questions on quality, but uncertainty on rain

correcting downwards materially and expect to price N for 2026/27 at similar

levels vs 2025/26.

Margin environment: SLC acknowledges the sector should face margin

pressure into 2026/27. The company expects that this will curb area growth in

Brazil that should ultimately lead to higher prices and an improvement in

margins for producers in the mid-term. SLC stated they view the current

environment, assuming interest rates should correct down, as supportive for

investments and growth - although did not flag anything in the pipeline.

Other projects: SLC flagged investments in biomass for corn ethanol as still a

smaller effort given returns for the company - albeit they continue to slightly

raise their forest plantations. While the demand is there, the economics

should limit investments to marginal areas with suboptimal soil for other

crops. On cattle production, this remains an opportunity for SLC, with higher

intensity routes as they prioritize their area for crops, particularly with

investments in feedlots.

Tax reform: The company is preparing for upcoming changes from the tax

reform. SLC expects cost reduction of ~R$100mn, albeit offset by larger

working capital requirements given increase in tax credits. They are aiming to

be compliant with the government's enhanced expectations in order to have

accelerated credit utilization.

Technology: SLC continues to be at the lead of technology deployment in

farming. Examples presented this year included the deployment of drones for

chemicals application, centralized control tower and large deployment of

sensors for better use of inputs. One sensor example SLC is testing has brought