Beef

Beef is the third most commonly consumed meat in the world, after pork and chicken. Beef production generates significant greenhouse gas emissions and wastes that contribute to water pollution.

The brief provides summary of the main environmental and social factors that affect beef production worldwide, however, it spotlights key players in the U.S. value chain, and provides examples of actions being taken by companies operating or headquartered in the U.S.

KEY TAKEAWAYS

Demand for beef is expanding, propelled by rising incomes and population growth.
The U.S. and Brazil are the two largest producers of beef worldwide.
Beef production generates significant greenhouse gas emissions and wastes that contribute to water pollution, when handled poorly.
Beef production also uses a lot of water. In the U.S., water availability is one of the key issues affecting beef production.
The production of beef and cattle feed uses a lot of land and also drives deforestation in countries like Brazil.
Investors should address risk in the beef supply chain through direct engagement with their portfolio companies and support of relevant policies and multi-stakeholder collaborations. Effective implementation of a company's policies requires promoting commodity traceability and having a clear approach to supplier engagement, verification and disclosure of progress.

Download the Beef Brief

Environmental and Social Factors that Drive Risks

Climate Change
Deforestation and Land Use Change
Soil Health and Biodiversity
Land Rights
Water Use and Pollution
Working Conditions

Climate Change

high

Beef production has a significant impact on climate change, accounting for the emission of 3 billion tons of carbon dioxide equivalents per year, comparable to the greenhouse gas emissions of 6.8 billion barrels of oil. Approximately 43-51% of global emissions from the livestock sector are related to beef cattle production. Cattle contribute directly to GHG emissions when they digest their feed and produce manure. Fertilizers and energy used for growing the animal's feed also contribute to total greenhouse gas emissions.
Deforestation and Land Use Change

high

Beef production is a major driver of deforestation globally. In Brazil, cattle ranching occupies about 80% of the deforested area in the Amazon, and it has led to the conversion of nearly 200 million acres of Cerrado habitat. While significant progress has been made in Brazil in the last decade to cut this high rate of deforestation (for example, through collaborations like the Soy Moratorium), ongoing action to avoid further clearing of new land is required.
Soil Health and Biodiversity

high

Raising beef uses more land—between three to ten times more—than any other meat, including chicken and pork. Permanent pastures (much of it used for cattle) make up 70 percent of all the land used for agriculture. Overgrazing, soil compaction from cow's hooves and poor agricultural practices can degrade topsoil and organic matter, which can take decades or centuries to be replaced (see more at Ceres' Agricultural Supply Chains as a Driver of Financial Risks).
Land Rights

medium

Cattle and beef are reportedly produced with forced labor and/or child labor in a number of countries. U.S. companies face reputational, market, and litigation risks if importing beef from countries where these challenges occur. Brazil is one of the countries that is an important exporter of beef to the U.S. and for which there is documented evidence of child labor.
In addition to child labor concerns - since small producers are the largest producers of beef in many countries - there are land rights and livelihood associated with beef production. Small producers also may face other challenges, including limited grazing and resource rights as well as access to credit, fair pricing, extension services and cold chain infrastructure. Lack of attention to the issues involved with smallholder production can lower both the quality and quantity of supply for agribusinesses.
Water Use and Pollution

high

Cattle operations can contribute significantly to water pollution when manure and feed crop production are poorly managed. The nitrogen and phosphorus nutrients from the manure and synthetic fertilizers used to grow crops can run off fields and leach into the water. This contributes to “dead zones,” or areas of water bodies where aquatic life cannot survive because of low oxygen levels. Specifically in the Gulf of Mexico (into which runoff from production in the Mississippi River watershed flows), the National Oceanic and Atmospheric Administration (NOAA) reported that the dead zone in July 2017 was the largest ever measured, covering an area about the size of New Jersey.

Not only are these dead zones harmful for aquatic life, but they pose serious human health risks and contaminate local drinking water supplies. The economic impact is significant with NOAA estimating that the harmful algae blooms causing the dead zones cost the seafood, restaurant, and tourism industries about $82 million every year.
Surface water and groundwater can also be contaminated by sediment from poor grazing management. Moreover, as the global cattle industry expands, so have the beef slaughter and leather industries. Slaughterhouse and tannery waste—rich in organic matter, heavy metals and caustic solutions—is highly polluting to local water resources when it isn’t treated.
Working Conditions

medium

Working conditions in multiple stages within the beef supply chain are hazardous.

Commodity Background

Beef is the third most commonly consumed meat in the world, after pork and chicken.
Globally the demand for beef during the next several decades is expected to continue (by approximately 60 percent by 2050). This increase is driven in large part by a growing global population, rising incomes, urbanization and westernization of diets in developing countries.
Beef products are typically sold as wholesale cuts, ground beef for commercial use, or packaged cuts sold in retail outlets. Beef byproducts, including leather and fat, are used for many non-food items, including candles, crayons, paint and shoes.

Top Production Regions

The U.S. and Brazil are the Largest Producers of Beef, Accounting for One-Third of Global Production

On average, less than 5 percent of beef is exported globally, given the heavy weight of beef, trade policies, concern about spoilage and potential cold chain failures.

Production Statistics, Trends, and Drivers of Demand

65 million metric tons:
Average global beef production

$308 billion:
Global production value

3 percent:
Proportion of global production exported

Supply Chain

The beef supply chain is complex, involving numerous steps and types of operations

Download the Beef Brief

Company Examples

Cargill

Cargill has committed to reduce in beef production the use of antibiotics medically important to human health. It does not use growth promoting antibiotics--that are medically important--in the cattle it owns or its partnership cattle. It is also encouraging other cattle feeders to evaluate their use of antibiotics.

McDonald’s

McDonald’s has made several commitments to improving beef production:

In 2011, McDonald's helped found the Global Roundtable for Sustainable Beef (GRSB) and in 2016, the company began to purchase a portion of its beef from verified sustainable sources. In early 2017 it announced a 2020 aspiration to 'support sustainable beef production,' which includes setting specific country-based beef sustainability targets in 10 countries.
In 2017, 100 percent of the facilities from which the company buys beef (as well as poultry and pork) passed audits that complied with McDonald's animal welfare standards.

Walmart

Walmart has adopted an animal welfare policy and developed a position on responsible use of antibiotics in farm animals in the U.S. It has committed that, by the end of 2020, beef sourced from Brazil will be zero net deforestation and is working to create a dedicated sustainable beef supply chain for 15 percent of its beef sales in the U.S. It is also developing expectations for responsible labor practices with suppliers.

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