Brazilian Beef and Deforestation

BILLINGS, Mont. (DTN) -- The chairman of the U.S. Senate Finance Committee led senators on a push against Brazil's cattle industry, pointing to a two-year investigation into the meatpacking powerhouse JBS and Amazon deforestation.

Sen. Ron Wyden, D-Ore., pointed to the rising growth of beef imports from Brazil that topped $1 billion last year, but said Brazil's meatpacking industry is "turning a blind eye" to its supply chain and continued deforestation for cattle production. Wyden pointed to claims by JBS, Brazil's largest beef producer, that the company is driving toward ending cattle supplies tied to illegal deforestation.

"The reality is JBS is nowhere near meeting this commitment," Wyden said.

Instead, Wyden said JBS is playing a "cattle-ranching shell game," by moving cattle and then greenwashing the company's role in ignoring the problem.

"It's what's known as cattle laundering," Wyden said. He added that U.S. cattle producers have to compete with that lack of environmental standard. "The bottom line here is American ranchers are not getting a fair shake," Wyden said.

The Senate Finance Committee held the hearing because it oversees trade legislation.

Sen. Mike Crapo, R-Idaho, ranking member of the committee, pointed to Brazil's strong laws against deforestation but the lack of enforcement that has led to "illegal land-grabbing activities" in the Amazon. Crapo also highlighted a letter the committee had received from the Brazilian Embassy warning of "the potential for unintended consequences that may arise" if Congress were to take specific actions targeting Brazil over deforestation.

Deforestation, most of it illegal, reached a 15-year high under former President Jair Bolsonaro, noted Rick Jacobsen, manager of commodities policy for the Environmental Investigation Agency.

Jacobsen said cattle ranching is the largest driver of deforestation in the Brazilian Amazon. He described how a group of investigators saw the ways meatpackers "laundered their cattle through intermediaries." Essentially cattle raised on recently deforested areas will be moved to multiple other farmers to hide their origin.

"In many cases, this appeared to be a deliberate effort by ranchers to use weaknesses in the oversight and the permitting process in order to create a paper trail," Jacobsen said.

Jacobsen pointed to legislation that could be reintroduced that would raise standards for imported agricultural commodities to trace back to the farm of origin. He pointed to new regulations in the European Union to trace agricultural commodities to ensure they are not tied to deforestation. Without matching those rules, Jacobsen said the U.S. "risks being a dumping ground" for imports tied to deforestation.

Jason Weller, former leader of the USDA Natural Resources Conservation Service, is now the global chief sustainability officer for JBS out of Greeley, Colorado. He had the unenviable task of defending JBS and the Brazilian beef industry overall. He said JBS had a "zero tolerance" policy for sourcing its cattle from producers who hide the origin of their cattle. He said JBS plans to ensure "zero deforestation from indirect suppliers" by 2025.

"Simply blocking farms because of deforestation concerns is not enough because these blocked farms will continue to produce cattle and other ag commodities," Weller said. "They will find a way to enter regional and global supply chains."

Weller said JBS had set up 18 "green offices" to provide technical support to producers and help them bring their farms into compliance. Weller added deforestation in Brazil is a challenge larger than one company or one industry.

Ryan Berg, director of the Americas Program for the Center for Strategic and International Studies, noted deforestation in the Amazon is tied heavily to criminal activity, including both illegal logging and gold mining.

Also referenced was the erosion of Brazil's "cerrado" or savanna landscape, which is a large chunk of Mato Grosso. Berg highlighted "China's insatiable demand for soy" as driving that loss of cerrado.

"The role of Brazil's soy industry is also underappreciated in contributing to Brazil's changing landscape and increasing carbon footprint," Berg said.

Still, Berg also cautioned that Brazilian government officials will "bristle" because of criticism over deforestation because a large part of the population sees it as a sovereignty issue.

Leo McDonnell, a Montana rancher representing the U.S. Cattlemen's Association in the hearing, strongly criticized JBS for both deforestation and the company's history in Brazil. McConnell pointed to allegations of forced labor and child labor, as well as JBS's history of bribing Brazilian government officials to secure the loans that helped build the company. McDonnell then noted imported Brazilian beef is allowed to carry a USDA inspection stamp.

"They get to launder their product through here to unsuspecting consumers," McDonnell said. He added, "We're not competing with them. They are taking their market from us."

If the meat is further processed or packaged, it can be labeled as "Product of the U.S." USDA is trying now to change that rule.

Weller sought to counter complaints about Brazilian beef exports. He said, "Almost three-quarters of Brazilian beef is eaten domestically." About one-quarter of Brazilian beef is exported. Less than 2% of Brazilian beef is exported to the U.S., Weller said.

McDonnell pointed out that $1 billion in Brazilian beef amounted to about 460 million pounds. "We have a very supply-sensitive industry," McDonnell said. He added that 2% of beef volume could impact cattle producers' price up to 4%, "which is very huge when you only have margins of 3% or 4%."

When asked if Brazil could tighten its traceability standards to prevent deforestation, McDonnell said, "We're going to trust these people who have bribed government officials in their own country ... the facts show they are not good people, and so far, they need to earn our trust."

Wyden agreed Congress needs to better examine the traceability standards for agricultural commodities coming into the country because of the competition with ranchers.

"It's not fair to them and ultimately we are going to pay a price for this kind of trade cheating," Wyden said.

The full hearing can be watched at: https://www.finance.senate.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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