Super El Niño Threatens Brazil's Record Barley Area and Warm-Season Beer Demand
Federal forecasters put the odds above 90% that El Niño reaches the "very strong" category by November, with heavy spring rain forecast for southern Brazil just as barley harvest peaks. Paraná planted a record 130,000 hectares, but the share of fields in good condition has already slipped from 86% to 80% in one week. Brazil produced 955,000 tonnes of malt in 2024 against demand of 1.93 million tonnes.
Brazil entered spring on Tuesday with federal forecasters assigning more than a 90% probability that El Niño will reach the "very strong" category by November — the configuration known as a Super El Niño. According to the third bulletin of the government's El Niño Panel for 2026-2027, which draws on calculations by the US National Oceanic and Atmospheric Administration (NOAA), there is a 69% chance the event becomes the most intense since 1950. The trade publication Guia da Cerveja reported that the outlook puts both the barley harvest and warm-season beer demand under review.
The panel, published in August by the National Institute for Space Research (INPE) with the National Institute of Meteorology (INMET) and other agencies, projects three to five heat waves during the quarter, against two to three in years without the phenomenon. Forecasters expect more rain in the South and less in the North, the Northeast and parts of the Center-West and Southeast, with above-normal temperatures across almost the entire country. The panel notes that greater intensity does not guarantee greater damage, but raises the probability of it.
Record area meets excess rain
Paraná accounts for 84% of Brazil's barley area and is expected to deliver 88.1% of the national crop, according to the national supply agency Conab. Growers planted 130,000 hectares there, a record and 23% more than last year, encouraged by demand from new malting plants.
The latest Boletim Conjuntural from Deral, the rural economics department of the Paraná state government, released on Thursday, shows conditions already slipping. Harvest began in August and had reached 4% of total area, close to last year's 6% pace, with no relevant delay. But in a single week the share of fields rated in good condition fell from 86% to 80%. A year earlier it was 90%.
"The main uncertainty factor falls on the effects of El Niño," wrote agronomist Carlos Hugo Godinho, author of the bulletin's barley analysis. Rain was already prominent during winter, the state's historically driest period, leaving "little margin for favourable expectations in spring".
Harvest peaks in October and November, precisely when above-average rainfall is forecast for the South. The El Niño Panel warns that excess moisture can compromise grain quality. Godinho considers a repeat of last season's yield of 4,736 kg per hectare unlikely, though the larger area could still lift output above the 500,000 tonnes of the previous cycle if the weather eases. The bulletin does not estimate losses, and with harvest barely under way it is too early to measure them.
A malt deficit that amplifies the risk
Quality matters as much as volume, because Brazil is structurally short of malt. In 2024 the country produced 955,000 tonnes against the 1.93 million tonnes it would need, according to data presented by Jeferson Caus of Cooperativa Agrária at the Do Grão ao Gole congress. A weak crop tends to deepen that dependence on imported supply.
Demand rises with heat — up to a limit
Scanntech, matching retail sales with data from about 600 INMET weather stations between 2022 and 2026, found that each additional degree lifts volumes of weather-sensitive beverages by 4.1%. Beer gains 5.0% per degree, the third largest response, behind water (5.7%) and isotonic drinks (5.4%).
The relationship is not linear. Researchers from the University of California, ETH Zurich and North Carolina State University examined US retail sales between 2006 and 2023 and found alcohol consumption rising with temperature up to about 32 °C, with the positive effect diminishing above that level, Reuters reported. In June, Paris banned street drinking and beverage sales during a heat wave over dehydration risk.
On Ambev's second-quarter earnings call on 30 July, chief executive Carlos Lisboa told analysts that "2024 illustrated that higher temperatures can indeed influence demand", while adding that "these effects are unpredictable" and that "what we can do is prepare ourselves to face different climate scenarios".
Cost pressure along the chain
Lisboa noted that extreme weather events can affect agriculture, commodities, logistics prices and input costs. Electricity is one pressure point: regulator Aneel kept the yellow tariff flag in September, adding R$1.885 per 100 kWh, citing the seasonal dry spell and heavier use of thermal generation. That cost reaches a chain that depends on refrigeration from the brewery to the bar counter. Poor harvests that push food prices higher can also squeeze household budgets and move beer out of discretionary spending.
Felipe Passarelli, market intelligence director at Scanntech, told Valor Econômico that anticipating swings has become the market's main tool. "With a high-intensity El Niño forecast for the coming months, weather stops being an operational surprise and becomes a planning premise," he said. "The difference between reacting and anticipating lies in treating temperature as data, not as luck."
