Trase Yearbook 2020
The state of forest risk supply chains
A review of commodity deforestation and expansion, the traders and markets that dominate exports and their exposure to associated deforestation risk, and the effectiveness of zero-deforestation commitments for half of global trade in forest-risk commodities.
The leading direct driver of deforestation in Latin America
The Brazilian cattle sector is the leading driver of tropical deforestation. However, pasture deforestation is highly concentrated in a few municipalities.
of pasture deforestation in 2017
The Brazilian cattle sector is the leading driver of tropical deforestation worldwide, and is estimated to account for a fifth of all commodity-related deforestation across the tropics . Trase estimates that pasture deforestation in the Brazilian Amazon and the Cerrado in 2018 alone was 1.1 million hectares.
of cattle deforestation risk per 1,000 tonnes of beef exports in 2017
Brazil exported 2.1 million tonnes of beef products in 2017, roughly 20% of its total production. These exports were mainly sourced from the Cerrado (43%) and Amazon (27%) biomes. These exports carried 113,000 ha of deforestation risk, most of it in the Cerrado (51,200 hectares) and the Amazon (40,500 ha).
Brazil’s 2.5 million cattle farmers are distributed across the country, and around 90% of cattle are raised on pasture for their whole lifespan, in contrast to the more intensive, feedlot-based systems seen in the US. This means that any increases in production tend to come through the expansion of pasture area.
Indirect land-use change deforestation linked to soy threatens prospects for sustainable intensification in BrazilSee insight
It is important to note that that the expansion of cattle pasture onto native vegetation in Brazil is closely related to the expansion of soy, Brazil's main agricultural crop. It typically takes between three and five years (depending on the region) before the first soy crop is planted on newly cleared land. In the meantime the land is often used as pasture. Unpublished analyses by the Trase team strongly indicate that soy expansion is an indirect driver of pasture deforestation.
China an increasingly dominant beef importer
Slaughterhouse approvals could increase China’s beef deforestation risk exposure in BrazilSee insight
Mainland China and Hong Kong were by far the biggest export markets for Brazilian beef products in 2017, together importing 767,000 tonnes. Hong Kong was the top importer throughout 2015–2017, but mainland China’s imports more than doubled in the period, from 136,000 to 309,000 t, taking it from the seventh largest to the second largest individual market. Over the same period, exports to the other top international markets – Egypt, Russia, the EU and Iran – all declined. The increase in China’s imports of Brazilian beef is set to continue in the wake of the African swine fever outbreak that began in 2018, which has decimated its domestic meat production, requiring the culling of more than half of China’s pig herd, with knock-on effects on prices and imports for all meat products.
A highly consolidated sector
Just three trader groups – JBS, Minerva and Marfrig, and their subsidiaries – handled 68% of Brazil’s beef exports in 2017 out of 135 exporters in total. These companies tend to have strong control over the origin of their products, as most operate their own slaughterhouses.
Widely variable deforestation risk
More than half of the deforestation risk linked to exports is associated with just 2% of cattle-producing municipalities. There are thus stark differences in deforestation risk associated with different export markets (and trader groups) linked to where they source exports from. For example, China was exposed to over 40,000 hectares of export-associated deforestation risk in 2017.
The top 5 beef exporter groups accounted for 76% of export volume and 74% of linked deforestation risk in 2017
However, exports to Hong Kong carried almost twice as much deforestation risk (64 ha/kt) compared to mainland China (36 ha/kt) because it accepts imports from all slaughterhouses licensed for export by the Brazilian federal government – whereas mainland China licenses a much smaller set of facilities, mainly in southeastern Brazil and far from deforestation frontiers. The European Union’s deforestation risk exposure was mainly linked to cattle sourced from the Cerrado savannah region: 2,788 ha, or 57% of the EU’s total exposure.
Live cattle have highest deforestation risk of Brazil's exported cattle productsSee insight
In turn, sourcing patterns, and the related deforestation risk, are influenced significantly by the beef products being exported. For example, live cattle exports are mainly sourced from Pará state and are associated with nearly five times more deforestation risk per tonne than other beef products the country exports (fresh and processed beef, and offal). Also important are importing countries’ restrictions and permissions concerning beef products from particular states or slaughterhouses, as in the case of mainland China and Hong Kong.
Emerging risks linked to rising exports
Lifting of import bans increases deforestation riskSee insight
Exports of Brazilian beef (as well as chicken and pork) have risen significantly in recent years. Brazilian beef exports grew fivefold between 2000 and 2019. The cattle needed to meet this rising demand increasingly comes from regions where pasture expansion is driving higher levels of deforestation – regions that until now have typically supplied the domestic market. As beef exports continue to grow, the associated deforestation risk can also be expected to rise, as seen, for example, in the recent licensing of risk-exposed slaughterhouses by mainland China or the lifting of the US ban on fresh beef imports from Brazil. The COVID-19 pandemic looks set to accelerate exports to the USA .
High deforestation risk despite commitments
(55 out of 2,803) of cattle-producing municipalities accounted for at least half of cattle deforestation risk in 2017
Although the companies that dominate Brazilian beef exports have adopted zero-deforestation commitments (ZDCs) , these commitments are mainly focused on the Amazon, meaning that in 2017 only 32% of Brazil’s beef exports were covered by a commitment. Just 20% of exports from the Cerrado were covered, compared to 84% of exports from the Amazon, despite the Cerrado accounting for a larger share (45%) of cattle deforestation risk associated with exports than the Amazon (38%).
of beef exports in 2017 were covered by a zero-deforestation commitment
Two main types of ZDC cover beef production in the Brazilian Amazon. Terms of adjustment of conduct (TACs) are legally binding commitments signed by individual slaughterhouses to not purchase cattle from properties with illegal deforestation within the Legal Amazon (which includes part of the Cerrado). The other type, G4, is an agreement by traders JBS, Minerva and Marfrig not to purchase cattle from properties in the Amazon biome that include land cleared after 2009. TACs and the G4 agreement covered 82% and 67% of exports from the Amazon biome, respectively, in 2017.
of cattle deforestation risk linked to exports covered by a trader’s zero-deforestation commitment in 2017
Trase data show that despite these commitments, beef exports were associated with 120,000 ha of deforestation risk in the Amazon between 2015 and 2017, including 74,000 ha associated with G4 signatory companies and their subsidiaries. This deforestation risk is associated largely with indirect suppliers.
At the slaughterhouse level, while slaughterhouses owned by G4 signatories and those with TAC commitments had on average lower deforestation risk than other slaughterhouses, they were still linked to 59% (86,900 ha) and 75% (110,000 ha), respectively, of deforestation risk in the Amazon in the same period.
More information on data sources and methods .