Some reality?A recent and not uncommon story!
Two farmers, brothers, farming in MT. Appled for, and given Judicial Recovery status (similar to Chapter 11, US).
Total creditors R$29million.
Included in that R$29M is R$495k owed to Verde for fertiliser purchase.
Well worth a read to get a better understanding on recent matters.
Below is an extract from the published notice (DOEMT 30/10/2023 p200) giving the history of the farmers/company in crisis. Link also included below for those who have access to JB):
'1. Taking into account the provisions of article 51, item I, of the Law No. 11,101 /2005, the Claimants present their history and reasons of its current economic-financial crisis, under the narrative of the partners, according to attached documents.
2. By carrying out the activity together rural, the stories of the applicants intertwine and become unique. Like this, despite the compliance with the presentation of the individualized history in the attached documents, for the purpose of presenting the applicants in the Exordial, the story is narrated in a single text.
3. The Rural Producer Volme Alves in April 1999, acquired his farm in the State of
Gois with its own resources, starting its activities in the field of livestock, and later began to carry out agricultural activities in years after the start of activities.
4. Before the financial return not as satisfactory of the activity carried out, the rural entrepreneur decided expand its operations in the agribusiness sector, starting to plant soybeans and corn in leased areas.
5. From the beginning, Volme Alves prioritized strictly comply with payments from its suppliers, as well as such as investments in technologies and machines to increase productivity and income.
6. Business lasted for good years, so as well as other care and investments in the areas they owned. Occurs that, unfortunately, with the beginning of the pandemic crisis, the input market underwent an intense change, with prices never seen before,
completely disorganizing business planning, and consequently causing enormous inconvenience to maintain the balance between income and expenses.
7. In the State of Gois, leased areas are located close to sugar cane mills, a factor that is very significant value and value for competition, where leases they went up to 18 bags per hectare, currently reaching 20 bags/ha.
8. Therefore, with the increase in rental values, it was necessary to search for new alternatives, including areas of opening in the State of Mato Grosso, a State that had much more eye-catching and interesting for the producer.
9. In mid 2010, Mr. Jos Clebion, brother of Mr. Volme, who until then worked
livestock farming activity, he joined forces with his brother to also carry out farming activities planting of soybeans, corn and sugar cane, in leased areas, forming both, an economic group.
10. The beginning of the activity was extreme difficulty, considering that it started in leased areas, as well as degraded, thus requiring a large investment in preparation of soil and correctives, with the aim of making the property productive. 11. From the beginning, the brothers strictly complied with their commitments, including payment of suppliers and institutions banking sectors, investing in greater market confidence, technology and machines, which consequently brought an increase in productivity, turnover and income.
12. During these years, several machines were acquired for the development of crops, including two harvesters and their platforms for collecting soybeans and corn, which were also used GOVERNMENT OF THE STATE OF MATO GROSSO - State Secretariat for Planning and Management - SEPLAG - Official Press - IOMAT - Authenticity Code: 175cc187 form, with the function of supplementing income from the activity.
13. In this context, agricultural activity presents intense challenges, mainly with regard to changes in commodity prices and inputs, in addition to adverse weather conditions.
14. Furthermore, along with the beginning of the pandemic years, the input and machinery market underwent a major change, taking prices to values never seen before, causing an immense change and disorganization in the balance of activity between revenues and expenses.
15. In line with the above, there is the disorderly increase in inputs, which also saw a brutal increase in rates of bank interest, causing the then businessman to have the release of very few controlled resources and, consequently, having to bear very high interest rates. Now, the annual interest plus fees exceeded 20% (twenty percent) per year, a percentage that was impossible to support for the given period.
16. In addition to the significant increase in interest rates, the activity experienced a major destabilization, which caused a sudden drop in agricultural commodities, notably soybeans, whose sales prices no longer covered production costs, making the ability to pay costs and , also, of the investments used.
17. In the case of the applicants, the low prices of soybeans in the 2022/2023 harvest immediately made it impossible to pay in full on funding and investment loans, even though they managed to pay off a significant percentage of their total bank debts.
18. This time, the rural producer, in an opportunity to improve his income and recover the values lost due to the increase in inputs and rents, expanded his production to the State of Mato Grosso and, during the process, needed to pay for the construction of roads and other expenses to transport production, undertakings that generated excessive costs, but he had no alternative other than to pay for whatever was necessary for the regular continuation of his activity.
19. In this context, at the beginning of 2021, after an order was broken by a fertilizer trading company where they had to pay new amounts to acquire them, with extremely high prices, reflecting the economic effects of the pandemic, added to the
Excess interest, Volme Alves and his brother Jos Clebion saw their business activity enter a serious crisis.
20. In this way, the facts mentioned above, added to the combination of interest and increase in inputs that occurred enter the years 2022/2023 with the sudden drop in agricultural commodities, notably soybeans, whose sales prices did not cover production costs and, also, with the sharp drop in corn prices in the second harvest, completely making the production capacity unfeasible. payment of costs and investments made by the rural producer.
21. The last few years were crucial for Mr. Volme and Mr. Jos Clebion to see their rural activity at the beginning of an economic-financial crisis, that is that expenses increased significantly and, in the same proportion, caused a significant decrease in revenue received, making it difficult the producer's activity.
22. Currently, the entrepreneur aims to restructure, with a view to returning to growth and expansion of his business, however, the margins generated do not allow the payment of all financial commitments signed at the time of investments performed.
23. Therefore, the ultimate objective is to settle your liabilities, at this initial stage, they are able to gain momentum and deadlines that allow them to undertake economic-financial restructuring and maintain their activities. After all, this is the central objective of the recovery institute stamped on the article 47 of Law 11,101 /2005, the maintenance of the production source, with the consequent preservation of the company.
24. On this path, Judicial Recovery presents itself as the best and only way to face the problems and crisis that producers are going through. Through this institute, the Claimants intend to negotiate the liabilities with their creditors, banks and Investment Funds, so that they can, in the short term, continue with their activities, aiming to grow production and the activity itself, maintaining jobs. direct and indirect, generating income, paying municipal, state and federal taxes and contributing to the country's growth.'
https://www.jusbrasil.com.br/diarios/1270972135/doemt-30-10-2023-pg-200