By Katherine Hamilton

Lavoro is restructuring agreements with some suppliers and withdrawing its full-year outlook as the ripple effects of a poor crop season continue to be a challenge.

The Brazilian agricultural products retailer said Wednesday it is restructuring about R$2.5 billion ($450 million) in trade payables owed to its agricultural input suppliers. Lavoro is withdrawing its outlook as a result of the complexities of the restructuring plan.

Lavoro reached an out-of-court agreement to restructure with a number of principal product suppliers to help mitigate supply chain disruption. The restructuring allows for the extension of payment terms and secures future product supply for multiple years, it said.

Chief Executive Ruy Cunha said the restructuring will help deal with product availability constraints and make Lavoro's future operations more predictable.

The extension to supplier payment obligations is expected to provide more flexibility so the company can right-size its fixed-cost structure and be more efficient, Cunha added. Obligations due in 2025 are now rescheduled over a two- to five-year period.

Brazil's crop in 2023 and 2024 was hurt by falling commodity and agricultural product prices, declining farmer profitability, droughts and restricted liquidity for farmers, Lavoro said. The deterioration in inventory financing conditions and a reorganization of one of Lavoro's main competitors led to severe shortages during the peak crop planting season.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

June 18, 2025 15:14 ET (19:14 GMT)

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