{"id":80,"date":"2009-04-14T14:35:53","date_gmt":"2009-04-14T13:35:53","guid":{"rendered":"http:\/\/www.cardy-brown.com\/?p=80"},"modified":"2009-05-01T12:57:45","modified_gmt":"2009-05-01T11:57:45","slug":"brazilian-slaughterhouse-resque","status":"publish","type":"post","link":"https:\/\/www.cardy-brown.com\/?p=80","title":{"rendered":"Brazilian Slaughterhouse Rescue?"},"content":{"rendered":"

2009, six Brazilian slaughterhouses file for bankruptcy protection.Independ\u00eancia was the first large company to do so followed by Arantes, Frigoestrela, Margen, IFC and Quatro Marcos. Mato Grosso State, home to\u00a0Brazil’s largest beef cattle herd, has lost R$4.2 billion in the last twelve months as slaughterhouses have closed down,\u00a0according to the State’s Livestock Farming Economy Institute.<\/span><\/p>\n

The global crisis, which has cut demand and reduced exports, has been the major block to cash flow for the slaughterhouses. Prior to the crisis, the rising price cycle for beef cattle had already begun to squeeze profit margins and reduce liquidity for slaughterhouses.<\/span><\/p>\n

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The Brazilian government is evaluating new alternatives as it looks to ease the financial problems faced by slaughterhouses. Two measures are being assessed, which would provide additional working capital to the sector. Both involve the use of up to R$800 million in accumulated tax credits owed to companies producing for export.\u00a0<\/span><\/p>\n

One alternative would see the government pay slaughterhouses\u00a0in cash for tax credits – \u00a0a move which would provide extra liquidity to cash-strapped companies. Receipt of these funds would be linked to guarantees that slaughterhouses would pay their debts to ranchers and meat workers.<\/span><\/p>\n

Another option would be to use these tax credits as a form of collateral against new bank loans to the sector. In this case however, there may be legal obstacles to financing companies that have filed for judicial recovery.<\/span><\/p>\n

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Meanwhile Brazil’s largest public-sector bank, Banco do Brasil, may increase credit available to Brazil’s agricultural sector by as much as 25% for the 2009\/10 crop season from 2008-09. Banco do Brasil’s current estimate is that 30.8 billion Brazilian real ($13.7 million) of credit will be issued to farmers for the 2008-09 crop season. This credit for 2009-10 should be finalized in May, he said.<\/span><\/p>\n

Banco do Brasil’s increase in credit would be in line with the government’s expected increase of 25% to R$100 billion in agricultural credit in 2009-10.<\/span><\/p>\n

According to the president of State development bank BNDES, Luciano Coutinho, the bank is also studying measures that could support the slaughterhouse sector, which might be announced later this month.<\/span><\/p>\n

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As other slaughter houses have cut back production, slaughter fell by 31% in Brazil in the last quarter of 2008, JBS-Friboi has begun to increase levels, primarily to take up slack left by other players exiting the market. In January it increased slaughter by 3% and in February, with the shutting down of Independ\u00eancia, this rose to 17%. In an indication of its aggressive domestic market strategy, JBS has announced that its board has approved the opening of two distribution branches in Minas Gerais (Contagem) and Santa Catarina (Itaja\u00ed) States, which will operate mainly in the wholesale beef, pork, and derivatives sectors.<\/span><\/p>\n

Other groups are also taking advantage of opportunities to boost market share domestically. Bertin is moving fast, and has already reactivated its second shift in Campo Grande (MS) and has hired over 500 people. Bertin has managed to increased slaughter by 25% in January and February. Bertin also plans to open a unit in Diamantino this half of the year, designed to slaughter up to 4,000 head of cattle a day.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

2009, six Brazilian slaughterhouses file for bankruptcy protection.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.cardy-brown.com\/index.php?rest_route=\/wp\/v2\/posts\/80"}],"collection":[{"href":"https:\/\/www.cardy-brown.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cardy-brown.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cardy-brown.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cardy-brown.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=80"}],"version-history":[{"count":0,"href":"https:\/\/www.cardy-brown.com\/index.php?rest_route=\/wp\/v2\/posts\/80\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.cardy-brown.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=80"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cardy-brown.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=80"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cardy-brown.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=80"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}