beef production in brazil farming... · e. cow-calf phase usually: lowest economic returns and risk...

21/01/2010

1

Beef production in Brazilstructure, economics and environment

Luís Gustavo Barioni


History and Geography

Current Structure

Modal and alternative production systems

1.

2.

3 Modal and alternative production systems

Economic Aspects

Environmental Aspects

Drivers for change, Projections and Mitigation

3.

4.

5.

6.


A little about Brazil

Colonization of Brazil by cattle

History and Geography1.

a.

b Colonization of Brazil by cattle

Recent socio-economic context

Current geographical distribution

b.

c.

d.

A little about Brasil

Total area: 8.4 million sq kmLanguage: PortuguesePopulation: 192 millionGDP: $1.4 trillionGDP per capita: US$ 7,605

A little about Brasil:Main Roads and Cities

Fortaleza

São Paulo

Rio de Janeiro

Belo Horizonte

Brasília

A little about Brasil

Hot and humidHot and dry

Hot with 3-5 month dry

Subtropical 3 month dry/cold

Subtropical humid

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2

Colonization by Cattle

•European breeds introduced by the portuguesein 1534 for working in sugarcane meals in thenortheast and migrated with human population

b b d i d d i d b•Zebu breeds introduced in 1898 and became a major component in 80 % of the herd

•Brachiaria spp. introduced 1950 anddisseminated in the 1970´s

Socio-economic context

• Economic stabilization

• Increasingly open market

• Diversification of exports

• Increasing investments in infrastructure

Economic stabilization

40 00

50,00

60,00

70,00

80,00

90,00

e (

% p

er

mo

nth

)

0,00

10,00

20,00

30,00

40,00

1981

jan

1982

jan

1983

jan

1984

jan

1985

jan

1986

jan

1987

jan

1988

jan

1989

jan

1990

jan

1991

jan

1992

jan

1993

jan

1994

jan

1995

jan

1996

jan

1997

jan

1998

jan

1999

jan

Time

infl

ati

on

ra

te

Demais produtos

28,3%

Tabaco

19651965Diversification ofAgricultural Exports

Coffee

Soybean products

Tabaco2,0%

Milho2,1%

Algodão7,9%

Açúcar4,2%

Cacau3,1%

Café52,5%

Elaboração: GV AgroFonte: UN Comtrade

Coffee

Meat

Forestry productsSugar and Ethanol

Leather andleather products

US$ 71,8 bi (36.4%)US$ 1,35 bi (84,4% of total exports)

Current Geographical Distribution


Herd Numbers and farm structure

Exports

Current Structure2.

a.

b Exports

Traceability

Foot and Mouth Disease

b.

c.

d.

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3

Herd Numbers - Total

80100120140160180200

(mill

ion

hea

ds)

020406080

1960 1970 1980 1990 2000 2010

Her

d s

ize

(

Year

Evolution of herd numbersby region

Farms size and herd Farms size and herd

30

40

50

ap

ita

a

no

)

Per capita beefconsumption

nsum

ptio

nt/y

ea

r)

0

10

20

30

1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008

Co

ns

um

o p

er

ca

(kg

/ha

bit

an

te/a

A partir de FAS/USDA e IBGE(2008).

Per

ca

pita

be

ef

co(k

g/in

habi

tan

t

Exports

1.500

2.000

2.500

rtad

o (

1.00

0 t)

000

t ca

rca

ss-e

q)

A partir de FAS/USDA e IBGE(2008).

0

500

1.000

1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Vo

lum

e ex

po

rTo

tal e

xpor

ts(1

0

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Foot and Mouth Disease Traceability

•SISBOV: national systems of traceability. It was very vulnerable at the begining but is getting increasingly robust.

Ab illi i l i d•About 72 million animals are registered


Cow-calf, stocking and finishing

The low input “Brachiaria x Nelore” system

Modal and alternative production systems3.

a.

b The low input Brachiaria x Nelore system

Feed supplementation and feedlots

Crop-livestock systems

Silvopasture systems

b.

c.

d.

e.

Cow-calf phase

Usually:

Lowest economic returns and risk

Allocated to the worse land and pastures and places with less infra-structure

No supplementationNo supp e e o

60 - 65% calving rates

55-60 % weaning rates

Weaning weight 150 – 180 kg

Stocking phase

Used to be long (about 2.5 to 3 years) and had little pasture in dry season (which was allocated to finishing steers and bulls)

Now better pasture management (dropped the length of this phase to b t 12 t 15 th )about 12 to 15 months)

Supplementation becoming common in the dry season

LWG:

0.4 – 0.6 kg/day in wet season

0 – 0.3 kg/day in dry season

Finishing phase

Usually around 6 month on pasture or 3 month on feedlots or supplemented on pasture (1% of LW as grain).

Take advantadge of compensatory growth

LWG:

0.6 – 0.7 kg/day on pasture

1.2 – 1.5 kg in feedlots

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5


“Brachiaria x Nelore” Low Input System

Brachiaria

Tolerant to low fertility soils

and also responsive to soil fertility

Easy to seed and persistent

Tolerant to bad pasture management

Highly productiveHighly productive

Low to average quality feed

Nellore (zebu)

Lower maintenance requirements

Higher intake of low quality feed

Higher tolerance to low protein diets

Higher tolerance to heatBrachiaria brizantha


“Brachiaria x Nelore” System

Brachiaria decumbens started to be cultivated in large areas in the 70’s particularly in the Cerrado (savanna)

Brachiaria humidicola was also cultivated in the wet lands

During the 80’s severe attacks of Spittlebugs (Deois flavopicta) made farmers adopt Brachiaria brizantha which was tolerant but required higher soil fertility

Brachiaria humidicola

Feed Supplementation and Feedlots

Feed supplementation on pasture and feedlots are carried out in the dry season

Feedlots are not covered and only for finishing for 70-120 days (usually only males)d ys (usu y o y es)

Large use of agricultural byproducts (cottonseed, citrus pulp, maize and soybean residues, sugacane yeast, etc.)

Sugarcane and maize silage used as fiber source

Crop-livestock Systems

Pasture after rice in the low fertility lands

Pasture after soybeans or intercroped with maize in more fertile land and large scale farms

Need large investments

High management demand

Silvopasture Systems

Decrease heat stress

Improved carbon balance

Allow use of high declivity areas

Usually Eucaliptus or pinus but oil producing palms (Dendê and Macaúba) Mohogany and otherMacaúba), Mohogany and other high value woods are being studied

High wood and coal demand with increasing control of deforestation

High management demand in the first years

Intensive pastoral systems

High nitrogen

Rotational grazing

Sometimes irrigation

Usually supplemented orallocated to feedlots in the dryseason/winter

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Cattle as reserve of value

Land ownership

Economic Aspects4.

a.

b. p

Intensification and management demand

Intensification and production risk

Cost of production and investments

c.

d.

e.

Cattle as Reserve of Value

40 00

50,00

60,00

70,00

80,00

90,00

e (

% p

er

mo

nth

)

0,00

10,00

20,00

30,00

40,00

1981

jan

1982

jan

1983

jan

1984

jan

1985

jan

1986

jan

1987

jan

1988

jan

1989

jan

1990

jan

1991

jan

1992

jan

1993

jan

1994

jan

1995

jan

1996

jan

1997

jan

1998

jan

1999

jan

Time

infl

ati

on

ra

te

Land Ownership

Land opening is facilitated by the timber extractors

Main practices:

Correntão – pasture

Slash and burn or clear cut – rice – pasture

Coal production – pasture

Coal production – soybean

Land in the agricultural frontier have low value but it increases as infrastructure (particularly roads) comes closer

In the forest cannot plant mechanized soybean or corn in the first years

Intensification and Management Demand

•Many beef ranchers in Brasil do not live in the ranch

•Extensive beef is usually taken as a low profit i f d i b lper unit of area and investment but low

management demand and of high profit per unit of labour

•Increasing management and technical demand may be a barrier to adoption

Intensification and Production Risk

80

100

120

140

nam

en

to (

Dia

s)

Pastagem (Redução de 1500kg MS na Massa Média de Forragem)

Animal (Perda de 10% do PV)

Total (Pastagem + Animal)

me

(d

ays

)

Pasture (loosing 1500 kg DM/ha)

Animal (10% of LW)Total

0

20

40

60

80

0 0,5 1 1,5 2 2,5 3 3,5 4 4,5 5 5,5 6 6,5 7 7,5 8

Taxa de Lotação (UA/ha)

Te

mpo

de

Tam

po

n

Barioni e Martha Júnior(2003)Stocking rate (LU/ha)

Buf

feri

ng ti

m

Investment and economicreturn (land excluded)

System Invest. Expenses Total Invest. Expenses Total

Total, R$/ha Aditional, R$/ha

Low productivity

pasture2.123,61 2.593,68 4.717,29 ‐ ‐ ‐

pasture

Avg productivity

pasture2.774,86 4.644,33 7.419,19 651,24 2.520,72 3.171,96

Crop‐livestock 5.048,54 23.894,04 28.942,58 2.924,92 21.770,43 24.695,36

Feedlots 3.267,42 7.462,67 10.730,09 1.143,81 5.339,06 6.482,87

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7

Investment and economicreturn (land excluded)

Sistemas VPL (R$/ha) IRR

Low productivity pasture (1.857,84) NC*

Avg productivity pasture (1 128 76) 0 56%Avg productivity pasture (1.128,76) 0,56%

Crop‐livestock 1.953,46 15,47%

Feedlots (95,19) 7,50%

Prices

1,00

1,20

1,40

(197

5=1)

Frango (kg) Boi gordo (15 kg) Suíno (15 kg)

975

= 1

)

Chicken PorkBeef

0,00

0,20

0,40

0,60

0,80

19

75

19

76

19

77

19

78

19

79

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

Índ

ice

de

pre

ços

reai

s (

De

flate

dp

rice

s(1

9

Deforestation LAND USE CHANGE(past)

Natural Vegetation

Grassland

Other crops

Grasslands

Natural Vegetation

LAND USE CHANGE(present)

Grasslands

Other Crops

Grasslands

Natural Vegetation

LAND USE CHANGE(future)

Grasslands

Other Crops

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8

Pasture Degradation Pasture Degradation

Pasture DegradationStocking rates

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

200,000,000

a (ha)

‐

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

‐ 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00

Área

Taxa de lotação (cab/ha)Stocking rate (heads/ha)

Pasture DegradationStocking rates

100 000 000

120,000,000

140,000,000

160,000,000

180,000,000

200,000,000

(cab

eças)

anim

als

‐

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

‐ 50,000,000 100,000,000 150,000,000 200,000,000

Reban

ho (

Área de pastagem (ha)

Nu

mbe

ro

f

Pasture Area (ha)


Deforestation

Pasture degradation and nutrient cycling

Environmental Aspects5.

a.

b. g y g

Greenhouse gases emissions

Drivers for change and Mitigation options

c.

d.

Greenhouse Gases Emissions

21/01/2010

9


Cattle Enteric Fermentation 68% of CH4 emissions (1994)

Cattle Enteric Fermentation

68%

14%1% 1%1% 1%


Beef Cattle 82% of enterirc fermetation emissions in Brazil (1994)

82%

Gado de Corte Gado de Leite Bufalos Ovinos Caprinos outros


Emissao de metano por novilhos a pasto

450

kg P

V

100

120

140

CH4-43m CH4-39m CH4-26m CH4-20m

sio

ns,

kg

0 4 8 12 16 20 24 28 32 36 40

Idade de abate, meses

CH4

rum

inal to

tal, k

g/4

5

0

20

40

60

80

Age at slaughter, mthRum

inal

met

hane

emis

Mitigation Options

Main mitigation options:

•Increase animal productivity

•Improve grasslands (to increase soil carbonImprove grasslands (to increase soil carbonstocks)

•Avoid deforestation (increasing stocking rates)

Drivers for change

• Economic stabilization

• Decreasing deforestation

• Expanding agricultureExpanding agriculture

• Increasing meat demand

Projections

Projections and evaluation of alternatives for mitigation of greenhouse gases emissions by the Brazilian beef industry – Direct emissionsand Land Use Change – Demand for Land

National herd model

Bovine herd projections

Beef demand projectionsto 2030

Land productivity

Demand for land

Farm‐level model

Economic forecasts

Emissions forecasts GHG Abatement Cost Curves

Pasture/crop GHG emissions/sequestration

Animal GHG emissions/sequestration

Input‐related GHG emissions

Pasture management, crop production

Pasture management, feeding practices, genetic improvement

Pasture management, crop production

Land productivity

21/01/2010

10

Projectionsreference scenario

100000

150000

200000

250000

size per system (h

ead)

0

50000

2009 2012 2015 2018 2021 2024 2027 2030

Herd

Year

Complete cycle ‐ degraded pastures

Complete cycle ‐ extensive pastures

Extensive cow‐calf + growing w/ supplementation + finishing on Integrated Crop‐Livestock

Extensive cow‐calf + growing w/ supplementation + finishing in feedlot

Projectionslow carbon scenario

100000

150000

200000

250000

ze per system (he

ad)

0

50000

2009 2012 2015 2018 2021 2024 2027 2030

Herd siz

Year

Complete cycle ‐ degraded pastures

Complete cycle ‐ extensive pastures

Extensive cow‐calf + growing w/ supplementation + finishing on Integrated Crop‐Livestock

Extensive cow‐calf + growing w/ supplementation + finishing in feedlot


140

160

180

200

0

20

40

60

80

100

120

CO

2e (

Tg)

Transportes Fermentação entéricaTransportation Enteric Fermentation


260

265

270

275

06t CO2‐e

Baseline Low Carbon

235

240

245

250

255

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Emissions 10

Year


21.00

22.00

23.00

24.00

25.00

e/kg carcass eq.

Baseline Low Carbon

15.00

16.00

17.00

18.00

19.00

20.00

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Emissions kg CO2‐e

Year


150

200

250

(millions of ha)

Baseline Low Carbon

0

50

100

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Pasture area (

Year

21/01/2010

11

Projectionsconclusion

Moderate intensification of the Brazilian Beefproduction systems simulated here would:

1. Reduce land demand by around 60 million ha, being a mean ofbuffer agricultural expansionbuffer agricultural expansion.

2. Capture over 100 million tons of CO2-e by incorporating C to Soil Organic Matter

3. Avoid the increase of GEE emissions that would be caused bymeeting the projected demmand, being around 35 million tons CO2-e/year lower than a reference scenario by 2030

ThankThank youyou!!ThankThank [email protected]@cnptia.embrapa.br

beef production in brazil farming... · e. cow-calf phase usually: lowest economic returns and risk...

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