As the U.S. and China edge closer to a trade deal, Brazil’s biggest soybean grower is sounding the alarm for farmers in the South American nation.

Early indications from both sides in the trade talks signal that China may buy fewer crops from South America, said Erai Maggi Scheffer, the owner of the Grupo Bom Futuro. Losing out on Chinese demand will probably mean lower prices for Brazil’s farmers, he said in a telephone interview.

Margins for some growers may turn negative, said Roberto Machado Bortoncello, commercial director at Bom Futuro.

“We are in a moment of big apprehension,” Bortoncello said. “We are hedging costs and putting our foot on the brake for expenses.”

Earlier this month, it was reported that China was proposing to buy an additional $30 billion a year of U.S. agricultural products including soybeans. When China slapped retaliatory tariffs on U.S. farm goods last year, premiums for Brazilian crops jumped.

After optimism grew that China and the U.S. would strike a deal, soybean prices in Brazil declined by as much 20 percent since last year’s peak in September, mainly amid the drop in premiums paid at ports, according to University of Sao Paulo researcher arm Cepea.

“Brazil’s growers will have to reduce costs and improve logistical operations to face this new global dynamic in the soybean market,” Scheffer said. His company cultivates 270,000 hectares (667,185 acres) of soybeans in Mato Grosso state, an area equivalent to more than three times the size of New York City.

Premiums for soy at Brazilian ports currently stand at about 60 cents a bushel. That may turn into a discount of 60 cents, compared with the Chicago futures price, if a trade deal includes more U.S. soy going to China, Bortoncello said.

The new scenario may reduce growth for Brazilian acreage, especially as fertilizer and crop-chemical costs continue to rise, he said. Over the past five years, the nation’s soy area increased 12 percent and production jumped 20 percent amid more use of technology, according to state crop agency Conab.

“We may see less conversion from pasture areas to agriculture,” Bortoncello said. “Smaller growers, who plant on rented lands, may reduce area due to low or negative returns.”