(Bloomberg) -- The world’s top meat producer JBS SA is considering cutting back production at some of its Brazilian plants as a spike in cattle prices weighs on meatpackers’ profits.
The company is studying an option to put employees on leave at as many as 11 plants in December or January, a move that would reduce production, according to a person familiar with the matter who asked not be named because the information isn’t public. JBS could reduce cattle purchases in those locations, but no final decision has been made.
JBS shares erased an earlier gain to trade little changed as of 5:30 p.m. in Sao Paulo.
Cattle prices, a leading indicator for beef, skyrocketed to a record last month as a severe drought hurt pastures and constrained supplies of slaughter-weight animals for meatpackers.
The Brazilian company isn’t alone in seeking solutions to the high prices. Some smaller meatpackers have already cut production temporarily, said Alcides Torres, founder of consulting firm Scot Consultoria.
JBS didn’t respond to a request for comment.
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