Group 2: Balazs, Bilal, Diana, Gao, Karla Largest South American country  5th largest population worldwide (191million people)  Area: 8.5millionkm2 (Consisting of 47% of area of the continent)  9th largest economy in world      12% of fresh water in the planet 23% of population work in agri-business Relatively low prices of land and labor No extreme weather, no deserts Largest commercial beef herd worldwide  2nd largest producer of the beef globally, producing 9.7 million tones Carcass Weigh Equivalent  Exports beef to 180 different countries, without any subsidies from government     In the international meat trade market, for each 10kg of beef trade, 3kg come from Brazil Biggest beef consumer globally Low cost of beef production, 60% lower than Australia, 50% lower than USA      Roughly 150 million animals used for beef production Uses 140 million hectares of land 6.8 million direct or indirect employees Pasture system is used for feeding animals No. of beef processing plants and abattoirs are 750 Two imported components:  Zebu Cattle ◦ Originated from the Indian Subcontinent  Tropical grasses ◦ Originated from Africa   1.8 million farms Small size farms produce: ◦ < 500 heads/year  Medium size farms produce: ◦ >1000 heads/year Commercial Farms produce:  ◦ >4000 heads/year   Crossing Breeding used in all regions of the country European breeds used for cross breeding: ◦ ◦ ◦ ◦ ◦ ◦ ◦ Angus Red Angus Simmental Charolais Polled Hereford Limousin Braunvieh POPULAR BEEF BREEDS Herd 208 millions of cattle heads Import live animals 5.262 Carcase mean weight: 233 Kg Carcase yield (Nelore) 51-55% Grazing area: 172 millions Ha Density: 1.2 animals/Ha Offtake rate: 18.9% Export of live animals 404 853 Export 16.5% 1.5 millions T. Culling/year 39.5 millions Meat Production 9.1 millions T. In Natura 1.1 million T 71% 87 countries Finished animals in Feedlots 3.4 millions (8.6% of culling) Internal market (83.5%) 7.6 millions T. 40 Kg./year per capita Russia 28% Iran 16% Egypt 12% Others 44% Industrialised 260 000 T 17% 108 countries EU 27: 53% USA: 12% Others: 35% Offal/others 173000 T 11% 62 countries Hong Kong: 66% Russia: 5% Others: 29%     20% world’s beef export. 2006: Europe banned the use of antibiotics in animal production  Brazilian packing plants regulated their use (ionophores used as growth promoters) Implants or beta-agonists are forbidden 27 Brazilian states: only 16 are considered foot-mouth disease-free areas, and 15 of them are only free with vaccination 53 Million heads Mostly european breeds - Criollo Exports: average 20% (Currently 7%) Production systems:  Cow-calf operations: extensive grazing systems  Finishing: 90 days feedlots or semi intensive on pasture with supplementary feeding. CO2 and N2O Amazon deforestation…    In the last 20 years Brazil showed the greatest growth rates in annual methane emission estimates (2.12%/year) Brazil showed the greatest growth rate of beef production (4.01%/year). Brazil: (−1.82%/year) of net increase in rate of methane emissions per unit of product (kilograms of methane/kilogram of beef)   Brazilian beef operations are mostly based on perennial tropical grass graying systems. The production cycle conducted exclusively on grazing systems with only mineral supplementation during the dry season leads to older animals at market. This productions cycle from birth to market averages 36 months.    Grazing combined with stocker phase (concentrate supplementation) or feedlot operations during the dry season (winter) in the recent decade. Birth: end of winter / beginning of spring Weaning: beginning of fall, calfs are avg. of 7 month old.  1970  78.6 million cattle  124.4 million ha pasture /NATURAL/ anim/ha  29.7 million ha pasture /CULTIVATED/  0.51 2006  171.6 million cattle  57.3 million ha pasture /NATURAL/ anim/ha  101.4 million ha pasture /CULTIVATED/  - 67.1 m ha natural pasture  + 71.7 m ha cultivated pasture 1.08 INCREASED PASTURE EFFICENCY Millen 2011, Current outlook and future perspectives of beef production in Brazil    1. Maintaining/Increasing Production on reduced pastureland. The recently overhauled “Forest Act” (2012) -force farmers to replant trees on illegally cleared areas (80% of rural properties in the Amazon should be covered by forests). -Farmers will be limited from expansion Expansion of cashcrop production (soybean) - has increased land prices - forced cattle production to move to the North    - While there is potential for further increase in productivity, the industry is heterogenous, uncoordinated and strategically not well-defined. Overcoming lack of infrastructure - roads railways, processing plants to comply with international standards Manage public perception about of deforesting the Amazon to create grazing for cattle; GGE Controlling greenhouse gas emissions  Delivering a traceable product -requires huge investment. -Control systems susceptible to bribery. It is possible for tags to be removed and cattle to move without documentation. -Address potential for abuse in biosecurity and disease control.  Manage the dynamic, aggressive global market -Competition for market share will increase from Argentina, Australia with similar production systems.  Overvaluation of the Brazilian Real, (1,7:1) with US Dollar – - This has directly reduced the competitiveness of Brazil's low value commodity exports.  Managing breeding programmes - Increased resistance from producers to changes in herd genetics causing ''backyard'' deals.   Improving quality of product -Currently producing lower value, slower growing and poor muscle grass- fed beef cattle. -Brazil is a top producer in terms of quantity , not quality YET; ''The future portends market segmentation of meat demand based on quality attributes.''   Future is uncertain: continuous government intervention in order to provide for domestic market and control inflation. Global share of exports will not increase in the short term because of government's objective to control inflation. CHALLENGES - Gaining market access - Their image as a reliable supplier has been damaged. -Increasing cow- calf herd which was reduced in the past years. - Beef cattle production on less land- More land is being used for grain and oilseed production.   Increasing investment especially to expand capacity to take advantage of the current economic environment. High export taxes – Government has removed rebates on exports. A PERSPECTIVE FOR BEEF PRODUCTION IN ARGENTINA A PERSPECTIVE FOR BRAZIL BEEF INDUSTRY         Herd sizes will increase – low production costs. Intensifed farming will increase as a response to land pressure- produce relatively cheap feed . Brazil will benefit from trade liberalisation and removal of farm support schemes; Will be able to deal with fluctuations in input costs Intensifed farming will increase as a response to land pressure- produce relatively cheap feed . Diet will be more grain-based Although feedlot numbers (currently 4%) will increase, they will continue to push the ''natural product'' as a marketing initiative. (Thompson, 2008) Increases of production will be offset by consumption as income increases; Net surplus will decrease Reduced pastureland • Intensification Maintain current growth • Modernization Keep leading and expand market access • Globalization Feeding Breeding Perennial tropical grass Grazing system or feedlot INCREASED PASTURE EFFICENCY Zebu cattle Cross breeding Large beef herd size     Management Family holdings Low cost of beef production ABIEC(Brazilian Beef Processors and Exporters Association) Economic sustainability Environmental sustainability Large domestic consumption World’s leading exporter 2nd LARGEST PRODUCER Challenges of land use and deforestation GHG emission Beef quality Antibiotics Implants or beta-agonists BSE/FMD  Feeding: • Development in Center-West region; Pasture subdivision; Recovery and maintenance of soil fertilization; Feed supplementation for critical periods  Breeding : • • • • Animal genetic improvement Develop specialized pedigree herds  Management: • • • • Sanitary control; Adjustment of the genotype-environment Keep traceability  Quality Achieve good feeding, breeding and management •  • Economic sustainability Domestic: • • International: • • •  • • • develop infrastructure and publication Governmental subsidy and organizations’ investment Build well traceability Extend new market(Iran, Egypt) Environmental sustainability Produce more with less land Utilize by-products: use the waste beef fat to make biodiesel Develop regulations to control GHG and deforestation