The beef chain in Brazil
Transfers and movement of cattle can occur throughout every phase of the production cycle and can include ranch-to-ranch (as formal or informal transactions) or through auctions, traders and other middlemen.
Whereas direct suppliers are ranches that sell cattle directly to meatpackers, indirect suppliers sell/transfer cattle to other ranches or intermediaries. While some ranches encompass various production phases (for example, full-cycle ranches that involve all three phases), the majority of suppliers only cover a portion of these phases. This breakdown of production phases poses traceability and monitoring challenges in the supply chain.
Why it’s important to include
indirect suppliers in monitoring practices
The last decade saw significant progress in reducing deforestation linked to cattle production in the Brazilian Amazon. The main meatpackers undertook public commitments and implemented purchase control systems to guarantee that the cattle sold does not come from areas with recent deforestation and other environmental irregularities.
Due to the complexity of the links involved in the supply chain, current systems implemented by meatpackers only cover direct suppliers, in other words, the final step of the cattle’s trajectory. However, studies show that a large portion of deforestation continues to occur on indirect supplier properties, which typically represent the first phases of the cattle’s life.
The lack of visibility in the early stages of the production chain exposes companies and investors to potential risks associated with illegal activity and unsustainable practices, which is unnecessary and avoidable.
Degree of visibility and possibilities for cattle flows within the supply chain
In order to reduce their risk exposure, companies are looking for alternatives to amplify their current systems’ reach and include indirect suppliers in their monitoring. Learn what companies are doing
The GTFI recognizes the challenge companies face moving forward and seeks to facilitate a collective solution-building process for monitoring, which will help the sector deliver on its deforestation commitments.