BRASILIA, BRAZIL — Concerns over subdued demand from China and rising costs is holding back Brazilian farmers from increasing soybean planting, according to a report from the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS).

The planted area for 2019-20 is estimated at 36.5 million hectares, nearly even with the 36.2 million hectares planted in 2018-19.

Market analysts expect overall demand in China for soybeans will be subdued because of African swine fever, which has killed swine herds and curbed feed needs, FAS said. In addition, there is uncertainty over whether the U.S. and China will reach a trade agreement. That would dampen demand for Brazil’s soybeans and put downward pressure on prices, FAS said.

Producers are also expecting tighter margins due to rising input costs.

Yields are expected to return to the average seen in the last several harvests of 3.4 kilograms per hectare. Total production is expected to reach 123.5 million tonnes in 2019-20, up from 116 million tonnes in 2018-19.

“Adverse weather affected yields across most of soybean producing states,” FAS said.

Exports are estimated at 75 million tonnes, up more than 10% from the current season. The increase is based on recovery of available supplies. Total exports are still down from the 84.1 million tonnes in exports from the 2017-18 season, FAS said.

Processing in 2019-20 is forecast at 44 million tonnes, based on trend expansion of about 2% per year. FAS estimates 34.1 million tonnes of meal and 8.6 million tonnes of oil will be produced.