Bolsonaro's Beef With the Amazon Forces US Meat Industry to Change
WHY YOU SHOULD CARE
American beef firms have long resisted pressure to reduce their carbon footprints, but the global outcry over Amazon fires is leaving them with little choice.
By Andrew Hirschfeld
When Brazilian President Jair Bolsonaro turned down aid from France in late August to tackle the wildfires that are scorching the Amazon rainforest, he was signaling his refusal to buckle under global pressure over his anti-environment policies. After all, Bolsonaro, who touts himself as pro-business, has encouraged farmers and ranchers to torch parts of the Amazon to clear land for pasture. But his actions are pressuring a sector well beyond Brazil’s borders to change: the American meat industry.
For years now, the industry has tried to resist calls from environmental activists to cut down on beef production and imports, despite the carbon emissions and deforestation that are known byproducts of rearing animals on a large scale for meat. But America’s meat giants are now facing unparalleled pressure, in the wake of the Amazon fires, to adopt more environmentally friendly policies. And early signs suggest that the global outcry over the fires in Brazil is forcing them to change.
The U.S. imports $295 million worth of beef from Brazil, making it the sixth-largest buyer of the meat from that country. Environmental groups such as Greenpeace are publicly demanding that American firms temporarily boycott Brazilian beef. But amid the forest fires, they’re also pressuring the firms to cut carbon emissions and shift away from beef more broadly.
Brazilian agribusinesses are feeling the pressure — the country alone is responsible for 20 percent of the world’s beef exports. Blairo Maggi, Brazil’s former agriculture minister and the primary shareholder at Amaggi, one of Brazil’s main grain trading groups, says that he is worried the crisis could lead to a boycott of the country’s exports, a view echoed recently by Marcello Brito, the head of the Brazilian Agribusiness Association.
Leaders of agribusiness are concerned. We have a challenging global environment, and competitors will use this.
Zeina Latif, XP Investimentos, São Paulo
And American companies are responding. In late July, as global attention began to focus on the fires, U.S. agricultural giant Cargill announced a target to cut the emissions intensity across its North American beef supply chain by 30 percent, by 2030. In August, Brazilian firm Marfrig Global Foods SA announced a partnership with U.S.-based agribusiness company Archer Daniels Midland Co to introduce a plant-based meat alternative — which will be called the Rebel Whopper — to Burger King restaurants in Brazil. Last year, Marfrig had sold Keystone, a U.S. subsidiary, to Tyson Foods, which is responsible for 15 percent of beef exports from Brazil.
“President Bolsonaro’s reaction has given companies sourcing from Brazil little option,” says Richard George, spokesperson for Greenpeace.
For sure, America’s food industry has faced pressure over its carbon footprint in the past too. Last year, the then Brazilian government fined Cargill for buying soy from illegally deforested land. But the level of global attention that the Amazon fires have drawn and the broader increase in awareness around climate change are together changing the equation, forcing companies to act — in Brazil and in the U.S.
“Leaders of agribusiness are concerned,” says Zeina Latif, chief economist at São Paulo–based XP Investimentos. “We have a challenging global environment, and competitors will use this [against them, if they don’t act].”
The expansion in demand from consumers for plant-based foods as an eco-friendly alternative to meat is adding to the pressure, suggests Maurice Schweitzer, professor of operations and information management at the Wharton School of Business. The plant-based meat industry is expected to touch $85 billion by 2030. “There are broad trends that have boosted demand for plant-based alternatives to meat,” he says.
Beyond the meat industry, American investment firm BlackRock — accused of having invested $2.5 billion in stakeholders linked to Brazil’s deforestation efforts — is also responding to criticism. In a recent statement, its CEO, Larry Fink, conceded that “companies must demonstrate their commitment to the countries, regions and communities where they operate.”
It’s unclear whether this pressure will indeed make Bolsonaro change what has been his consistent approach toward science and the environment — one that is also leading to an exodus of scientists and researchers from Brazil. The Brazilian president has, among other steps, cut funding for the federal agency responsible for preventing and controlling forest fires. Cattle grazing is behind 80 percent of the deforestation in the Brazilian Amazon, so unless Bolsonaro stops his support for farmers clearing forests for pastureland, the crisis is likely to continue.
And JBS — the Brazilian firm that’s the world’s largest meat producer, and the source of a third of America’s beef imports — has so far stayed silent on the Amazon fires. Experts say its refusal to appear defensive stems from its confidence as the market leader.
But there’s growing evidence that irrespective of size, no beef company will remain immune from the growing backlash against the meat industry’s carbon footprint, experts say. It’s a reality even JBS appears to tacitly acknowledge — in May, it announced plans to introduce a plant-based burger to Brazil.
The choice, they say, is increasingly becoming clear for American beef firms: Change, or get burned like the Amazon rainforest.
(Correction: An earlier version of this story incorrectly referred to Marfrig Global Foods SA as a subsidiary of Tyson.)
- Andrew Hirschfeld, OZY AuthorContact Andrew Hirschfeld