Supply Chain of Brazilian Beef

 In today's society, there has been a tremendous growth in demand for livestock products all across the world. This demand is not limited to affluent nations, but even to impoverished ones, owing to a decrease in cost. It is worth noting that the greatest growth in consumption has occurred in China and Brazil, both of which are rapidly developing countries. However, it is important to note that this tendency is becoming increasingly prevalent in low-income nations, where consumption of cattle products such as beef has increased in recent years. This study examines the supply chain of beef, with a special emphasis on Brazilian beef, and how it enters the rest of the world.

Over the last 50 years, the global beef consumption level has been increasing. According to the Organization for Economic Cooperation and Development (OECD), global beef output would increase by 1.28 percent per year until 2027, reaching 79.3 million tons. Brazil will consolidate its position as a major beef producer through 2040 (Casagranda et al., 2021). The industry aims to enhance output by utilizing new technology and reducing the amount of land utilized. The country distinguishes out in its efforts to increase quality production, which are primarily backed by genetics, hygiene, and governance. Brazil is known for its robust agriculture, which makes it one of the world's top food producers. Notwithstanding, this country has witnessed structural and production changes during the last decade (IBGE, 2019). Beef cow farming is crucial in this process; for example, the clearance of additional grazing lands has contributed to the expansion in farm numbers since 1950. Because the states of Rio de Janeiro, So Paulo, and Minas Gerais are known for their old occupations, the process of establishing grazing spaces proceeded through regions that were formerly inhabited by crops. However, the places deemed new agricultural frontiers have had a direct impact on the increase of cattle activities, particularly the usage of the Cerrado area in the Midwest (Casagranda et al., 2021).

Some restaurants' specialization in providing beef from certain breeds of cattle, such as Hereford and Black Angus, has resulted in a rise in demand for Brazilian imports (Lundström, 2007). This is notably true in several European eateries, albeit this demand does not represent the entire community. One of the reasons for the importing of beef from Brazil is its cheaper cost, which means that rather than considering the quality of the meat, purchasers frequently focus on the price. Furthermore, there is less worry about quality since, in certain countries such as Sweden, the long shipping time from Brazil means that the beef is tenderer, which not only raises the quality but also assures that buyers' emphasis remains only on the cost. The popularity for Brazilian beef is mostly due to the fact that it is produced in free-range systems, which are made possible by the good environment, which enables for stocking to take place all year.

Cattle farming is practiced in a variety of regions around Brazil. The two most significant locations, however, are the Southeast as well as the Center-West, which constitute 23% and 35% of the overall herd in the country, respectively. The South is closely followed by the North and Northeast, which represent 16% and 13% of the overall national herd, respectively (Lundström, 2007). It is necessary to highlight that these beef producing regions of Brazil are incredibly important since they not only contribute heavily to the beef export sector, but they are also able to remain operational throughout the year due to their geographical location. Their production is influenced by the supply of pasture, which guarantees that the beef cattle do not require hay at any time of year. As a result of the cattle being permitted to free range and consume natural forage, exceptionally high grade meat is produced. As a result of this circumstance, there is a strong demand for Brazilian beef all over the world, and developed nations prefer it due to the natural method it is produced.

One of the most pressing issues in 21st-century cattle markets is traceability. This is due to the fact that purchasers are constantly curious about where their meat originates from and how it was processed. As a result, it has become critical in Brazil to assure the production of high-quality beef (Hajjar et al., 2018). This is a procedure that entails having complete control over treatment of animals as well as the capacity to deliver the quality that the consumer demands. In this situation, the buyer is frequently an importing business that has specified terms that must be observed. Among these terms are the beef's quality, the needed cuts, the size of the packing, and the package's design (Lemos and Zylbersztajn, 2018, Casagranda et al., 2021). All beef exported from Brazil is killed, sliced, packed, and labeled inside slaughterhouses, and these must fulfill the importers' criteria. The criteria are frequently changing, and as a consequence, it is critical for exporters to verify that all requirements are satisfied in order to preserve their markets.

Brazil sends beef to a wide range of nations throughout the world. Egypt, Russia, and Chile are among the major importers of Brazilian beef, with their proportion steadily growing (Zu Ermgassen et al., 2020). However, the EU is the major importer of Brazilian beef, and its members have boosted their demand for Brazilian beef due to its excellent quality and production methods. Brazil's aim for attracting exports, particularly to the EU, is to advertise its beef as nutritious and ecologically beneficial. This allows importers to regard the beef as natural since, instead of being grain-fed, as is the scenario with most cattle in industrialized nations, it is grass-fed, making it marketable. Brazilian beef is imported into the EU throughout the year, assuring a consistent meat supply from this nation due to its climatic benefits over other cattle exporting countries.

When Brazilian beef enters the EU, it is purchased by two types of buyers: supermarket chains and wholesalers. In Sweden, for example, the top of the local chain of distribution is dominated by two major importers. North Trade and Flodins are two of them. North Trade sells the majority of its beef to supermarkets, which account for a sizable portion of its market and serve as its primary consumers (Lundström, 2007, Cederberg,Meyer and Flysjö, 2009). However, it also performs deliveries to semi-manufacturing enterprises, a market segment that is predicted to increase significantly in the future. North Trade also supplies some of its beef to the market in Finland, however this accounts for a small portion of its total beef distribution. Flodins, on the other hand, focuses the bulk of its distribution to stockists and supermarket chains, with wholesalers obtaining 60% and supermarket chains receiving 40% (Lundström, 2007). However, despite their apparent similarities, supermarkets and wholesalers operate in very different markets. While the former focuses on selling beef in retail, the latter is responsible for distributing beef to smaller retailers, likely to result in wholesalers prolonged reach than supermarkets because there are several more phases of distribution before they reach their ultimate customers.

Beef production is the single largest source of greenhouse gas emissions in Brazil (GHGs). Because of its influence on deforestation, it was directly responsible for 17% of Brazilian greenhouse gas emissions in 2014 and indirectly responsible for another 24% (Lerner et al., 2013, Brazil – Resource Efficiency Program for Brazil’s Beef Supply Chain). The beef sector is expected to increase by 30% by 2023, with correspondingly increasing consequences. This poses a significant challenge to Brazil's capacity to meet its Nationally Determined Contribution (NDC), which includes ambitious aims to cut national emissions by 37% below 2005 levels by 2025 and rehabilitate 15 million hectares of deteriorated pasturelands by 2030 (Brazil – Resource Efficiency Program for Brazil’s Beef Supply Chain). Realization of Brazil's NDCs thus necessitates a significant shift in attitude by the beef sector and its supply chain. The latter suggestion is one that intends to catalyze that shift in mindset and assist realize the enormous untapped potential to improve the efficiency of the beef industry by supporting the deployment of proven best-practice interventions throughout its supply chain.

To summarize, the beef supply chain is regulated by a variety of elements, including the quality of the beef, the location from which it comes, and the distribution system in place. The increased demand for beef reared in a natural setting has created a scenario in which it is critical to get the greatest grade, pasture-fed cattle onto the market. This is a critical element because it demonstrates how the global supply chain has gotten more complicated in order to meet the demand for varied products. Furthermore, governmental bodies taking the lead in the enactment of laws aimed at ecological conservation and resource sustainability. Businesses are urged to adopt sustainable measures connected to their operations, such as collaborating with their suppliers throughout the supply chain. Governments' proactive engagement in ensuring compliance with the new environmental legislation has become increasingly crucial in ensuring the development of sustainable practices among enterprises. These have come to be required to follow safety, health, and environmental requirements.

References

Brazil – Resource Efficiency Program for Brazil’s Beef Supply Chain.   Available at: https://www.nama-facility.org/projects/brazil-resource-efficiency-program-for-brazils-beef-supply-chain/ (Accessed: April 20).

Casagranda, Y.G. et al. (2021) 'The Brazilian beef supply chain and food security: a productive inputs view'. Research, Society and Development, 10 (13), pp. e260101320895-e260101320895.

Cederberg, C., Meyer, D. and Flysjö, A. (2009) Life cycle inventory of greenhouse gas emissions and use of land and energy in Brazilian beef production.   SIK Institutet för livsmedel och bioteknik.

Hajjar, R. et al. (2018) 'Scaling up sustainability in commodity agriculture: Transferability of governance mechanisms across the coffee and cattle sectors in Brazil'. Journal of Cleaner Production.

Lemos, F.K. and Zylbersztajn, D. (2018) 'International Demand Shaping Governance Mechanisms in Brazilian Beef Agri-systems: The Case of the Three Main Processors'. International Journal on Food System Dynamics, 9 (2), pp. 178-196.

Lerner, H. et al. (2013) 'Stakeholders on meat production, meat consumption and mitigation of climate change: Sweden as a case'. Journal of agricultural and environmental ethics, 26 (3), pp. 663-678.

Lundström, M. (2007) The winner of the expanding meat industry: A study of the power structures within the production chain of beef meat produced in Brazil and consumed in Sweden. Bachelor  Institutionen för livsvetenskaper.

Zu Ermgassen, E.K. et al. (2020) 'The origin, supply chain, and deforestation risk of Brazil’s beef exports'. Proceedings of the National Academy of Sciences, 117 (50), pp. 31770-31779.