Top photo: Tipping compost from Tera Ambiental. Photos courtesy of Tera Ambiental

Fernando Carvalho Oliveira and Fernanda Latanze Mendes

What is a ton of organic matter worth? Brazil’s market still cannot answer that question, because compost is priced on its plant nutrients, not on the organic matter it returns to the soil.  Organic material accounts for 45% to 51% of the country’s municipal solid waste, yet only 1% to 1.5% is recovered through composting. The rest goes to the landfill.

In Brazil, feedstock volume is not a constraint for the composting industry, nor is the need for compost. According to the federal Institute for Applied Economic Research (IPEA), Brazil’s agro-industries were already generating about 320 million tons of residues per year in 2009 — and confined livestock operations generated another 400 million tons of manure. Brazil imports more than 80% of the fertilizer it uses, and in the highly weathered, acidic tropical soils that dominate the country, organic matter accounts for most of the cation exchange capacity (CEC).

In the U.S., farmers are looking to reduce their reliance on imported fertilizers at a time when prices spike due to global supply disruptions. In contrast, the global fertilizer price crisis, on its own, has not catalyzed interest in compost utilization in Brazil.

Many Brazilian composters identify primarily as fertilizer producers, charging little or no tipping fees to accept organic waste. As a result, they depend heavily on compost sales to cover both processing and operating costs, even though market prices do not fully reflect compost’s agronomic and environmental benefits. By contrast, U.S. composting facilities typically derive 60% to 100% of their annual revenue from tipping fees. Without comparable compensation for the waste management services they provide, Brazilian composters must recover a substantial share of their costs through the sale of a product that remains undervalued.

Turning a compost windrow at Tera Ambiental’s facility in Jundiai, São Paulo state.

Processing organic waste is costly, and that cost should be borne by the waste generator. For example, wastewater solids arrive at about 80% moisture and food waste at more than 90%. Most of that water evaporates during composting, and part of the carbon is released as CO₂, so only about half of the incoming mass, or less, leaves the facility as finished compost. A composter that depends on product sales is paid for roughly half of the tonnage it has to handle.

Composters also compete with raw manure and with products lacking an environmental permit or registration with the Ministry of Agriculture (MAPA), the federal agency that registers fertilizers.  By law, raw manure can be sold freely, although that does not make it safe or reliable; unregistered products simply ignore the rules. Spared the cost of compliance, both undercut regulated composters on price. Raw poultry litter supplies nitrogen, phosphorus and potassium (NPK), but not stable organic matter, and through the priming effect it can even deplete the soil’s native organic matter. Buyers seeking organic matter pay for something it does not deliver.

The lack of a consistent pricing metric for organic matter in compost is another barrier facing Brazil’s compost sector, even though in tropical soils it drives soil structure, water-holding capacity and biological activity. Mineral fertilizers are priced primarily on their NPK content, making it difficult for compost to compete on the same basis. Compost generally has lower nutrient concentrations, which vary by feedstock and batch, compared to mineral fertilizers with guaranteed nutrient content. Even compost with consistent nutrient content would be undervalued in a market that measures fertilizer value primarily through NPK and has no metric for organic matter. As in the U.S., Brazil has no benchmark price for compost, with prices ranging from US$45 to US$140 per ton in 2025 and 2026, depending on processing level, region and sales channel.

Agricultural Markets

Spreading compost onto rows of coffee plants.

In Brazil, agriculture is the main end market for compost, unlike in the U.S., where landscaping and horticultural uses play a larger role. These farm customers also face a budgeting challenge. Mineral fertilizer is considered an essential operating expense for the current crop, while compost is viewed as a longer-term investment in soil fertility. When budgets tighten, these investments are often the first to go. During the 2021–2022 fertilizer crisis, driven by pandemic-related supply disruptions and later the war in Ukraine, concerns about mineral fertilizer shortages sparked a surge in demand for compost. Today, with tight margins and high credit costs, growers have returned to prioritizing mineral fertilizers over longer-term soil investments.

International examples point to a more viable model based on fees for service. There are successful examples in Brazil. Tera Ambiental, in Jundiaí, São Paulo state, profiled in BioCycle in 2019, now processes more than 77,000 tons of feedstock per year, 65% of it wastewater solids, and produces about 44,000 tons of compost. Tera, like the poultry-litter composters Valoriza and Organosolvi, collects tipping fees and also sells its compost.

Sugarcane plantation that utilizes compost.

Charging for treatment does not remove the need to sell compost, because a facility that cannot move its product cannot keep accepting feedstock. Three practical lessons follow:

• First, price the service. Sign long-term contracts with waste generators, such as sanitation utilities, municipalities and agro-industries, with tipping fees that reflect the real cost of treating high-moisture material. That revenue gives the facility room to ride market highs and lows, accepting lower prices when necessary, rather than letting compost pricing become a barrier to moving product.
• Second, secure buyers before building, through long-term offtake agreements with cooperatives, ag retailers or large growers. If finished compost does not move, the pad fills up and operations stall.
• Third, choose the site and the market together. Coffee, citrus and vegetable growers pay more for compost, while for soybeans, corn and sugarcane, freight costs can discourage its use, so volume outlets such as row crops need to be balanced with value outlets such as landscaping and growing media.

If a country with Brazil’s favorable soils, climate and agricultural scale faces the same commercial challenges documented in the U.S., it suggests that the problem is rooted in the composting business model rather than geography. Ultimately, the value of a ton of organic matter depends on what the industry can demonstrate through field data and what society is willing to pay for the services composting provides, including treating organic waste, avoiding landfill methane emissions and returning fertility to the soil.

Fernando Carvalho Oliveira is an agronomist with a Ph.D. in Soils and Plant Nutrition from ESALQ/University of São Paulo. He is a founding partner of Biossolo Agricultura & Ambiente,  technical manager of Tera Ambiental and a board member of ABISOLO,  the Brazilian association of plant production technology industries.

Fernanda Latanze Mendes is an agronomist with a Ph.D. in Soils and Plant Nutrition from ESALQ/University of São Paulo and technical coordinator at ABISOLO.

References

Beltrame, M.J.L., K. Goldschmidt Beltrame and F. Carvalho Oliveira. 2019. “Composting In Brazil.” BioCycle, September/October 2019.

IPEA (Institute for Applied Economic Research). 2012. Diagnóstico dos Resíduos Orgânicos do Setor Agrossilvopastoril e Agroindústrias Associadas [Assessment of Organic Residues from Agriculture, Livestock, Forestry and Associated Agro-industries]. Brasília.

Kaza, S., L. Yao and A. Stowell. 2016. Sustainable Financing and Policy Models for Municipal Composting. Washington, DC: The World Bank.

Luu, P. 2026. “Compost Offers American Farmers a Path Out of the Global Fertilizer Crisis.” BioCycle, May 4, 2026.

Oliveira, F.C., F.L. Mendes and L.P. Carvalho Oliveira. 2026. “Lodo de Esgoto: de Resíduo a Fertilizante Orgânico de Uso Seguro na Agricultura Brasileira” [Sewage Sludge: From Waste to Safe Organic Fertilizer in Brazilian Agriculture]. Anuário Brasileiro de Tecnologia para Produção Vegetal. ABISOLO.

U.S. EPA. 40 CFR § 503.13, Pollutant limits. Standards for the Use or Disposal of Sewage Sludge.