US opens the door to deforestation risk from Brazilian beef

by Erasmus zu Ermgassen

The US announced that from last Friday, February 21st, 2020, it will lift restrictions on the import of fresh beef from Brazil. Given the link between last summer’s Amazon fires and Brazil’s beef sector, many are now asking whether this shift in trade will expose US companies and consumers to buying deforestation-linked products.

Fortunately, a lot can be learnt from the past — here we use Trase’s supply chain data to analyse the US-Brazil beef trade, and see how the USA’s deforestation exposure changed the last time that this happened — in 2016–2017.

Over the past few years, the US has been one of Brazil’s major trade partners for beef — importing processed beef products from slaughter and processing facilities in the South of Brazil — mainly in São Paulo (shown in light blue in Figure 1).

Figure 1: The source and volume of processed beef imports from Brazil to the US.

These processed beef imports had a low deforestation risk, mostly from cattle originating in Mato Grosso do Sul, as shown in purple in Figure 2.

Figure 2: The source and amount deforestation risk of processed beef imports from Brazil to the US.

Fresh meat, however, is a very different story.

The US has historically not permitted fresh meat imports because of concerns over mad cow disease and food safety in Brazil. Between July 2016 — July 2017, however, (i.e. between the dotted lines in the figure), the US did, however, permit fresh meat imports, and this led to a doubling in Brazil-US beef trade.

Figure 3 illustrates not only the impact of this brief opening of the market on overall trade volume but the very different pattern of sourcing as significantly more volumes come from states in the Legal Amazon (shown in shades of red) in comparison to processed beef.

Figure 3: The source and volume of fresh and frozen beef imports from Brazil to the US during the period the market was open (July 2016 — July 2017).

In turn, this has a dramatic increase in the US’s exposure to deforestation risk as illustrated in Figure 4.

Figure 4: The source and amount deforestation risk of fresh and frozen beef imports from Brazil to the US during the period the market was open (July 2016 — July 2017).

This window in time shows that we can expect that the reopening of the US market to fresh beef imports from Brazil will result in a steep increase in the US’s exposure to deforestation risk.

This pattern of different products having different exposure to deforestation risks also has implications for other markets — exemplified by the high exposure to deforestation of halal markets due to live cattle exports being sourced mainly from the North of Brazil. Similarly, the declaration of Brazil as foot and mouth free by the EU in 2018 and the resultant easing of restrictions on imports for many of the Amazon states will have knock-on impacts on the EU’s exposure to deforestation.

Companies in consumer markets, including the US, can only minimize their exposure to deforestation by pushing for improved traceability in Brazilian cattle supply chains. Efforts by companies such as JBS, Minerva, and Marfrig to monitor direct suppliers are a good first step, but slaughterhouses should monitor both indirect and direct cattle suppliers, with monitoring efforts independently audited and publicly reported.

Explore Trase Brazilian beef subnational data yourself here.