Ranchers Pay Price for JBS Graft as Giant Buying Less

On the flat green pastures of Brazil’s Mato Grosso state, ranchers are witnessing firsthand what happens when the biggest cattle buyer stumbles. JBS SA, the nation’s meat-producing powerhouse, used to buy almost half of the Mato Grosso cattle headed for slaughterhouses. But since the company’s owners admitted taking part in a sweeping corruption scheme, its finances have been squeezed and purchases have plunged. Even worse, JBS no longer offers cash upon delivery of animals and instead asks to pay ranchers as much as 30 days later. Producers say they fear not getting paid for the cattle delivered to JBS, especially with banks asking ranchers for additional guarantees on loans made against expected sales to the company. Still, no payment delays by JBS have been reported so far, ranchers say. JBS also is seeking to refinance part of its debt with lenders in Brazil amid tighter credit conditions. “If the banks aren’t providing credit to JBS, why should we?” said Alexandre Caiado, 30, a second-generation rancher in Juina, Mato Grosso. “A lot of producers are only making punctual sales, just enough to pay the bills.”...more