Global beef roundup: Focus on Brazil, Part 2

In Part 1 of this series, I focused on the foundation of Brazil’s beef industry – the ubiquitous Nelore breed. While well suited to Brazil’s tropical grazing environments, the breed faces significant productivity challenges. Other challenges stand in front of Brazilian beef producers as well: native grazing land productivity, land use regulations and infrastructure.

Opportunities come in the form of credit assistance, export subsidies, relatively cheap labor and a national mood supporting the country’s agrarian roots.

Brazil: The tropical beef blowtorch

Brazil’s grazing environment is a conundrum. At best, native grasses there yield 5% crude protein, with poor digestibility for ruminants. During the dry season, crude protein drops to 2-3%. Soils tend to be gravely, erosive, acidic, deficient in organic matter and heavy in ferrous oxide.

Tropical forest soils also tend to be low in organic matter and, thus, nitrogen. In a moist, warm environment, organic matter is rapidly consumed by soil microbes. Precipitation of 50 to 100-plus inches continually leaches any leftover nutrients from the soil.

Vast reaches of South America like Brazil’s 800,000 square-mile cerrado were never home to large populations of native grazing animals – unlike, for example, the Great Plains of North America or the savannahs of Africa. Therefore, native forage species did not evolve under grazing pressure. And when subjected to even moderate grazing, Brazil’s native grasses tend to die out rather quickly.

Related: Global beef roundup: Focus on Brazil - Part 1

Forages and feedlots

There is an overarching answer to improving and expanding grazing in Brazil – at least in areas north of the Tropic of Capricorn, 80% of Brazil’s land area.

One is the introduction of Brachiaria genus of grasses native to Africa. First thought to be native to Brazil, most accounts now suggest Brachiaria was initially introduced to the continent beginning in the 1600s via slave ships, where grasses were used as bedding.

Brazilian agronomists have sought out and improved dozens of Brachiaria species to fit nearly every grazing biome on the continent. Hardy, drought tolerant and high in nutritional value, Brachiaria has been planted as forage on an estimated 500,000 square miles of pastureland in Brazil alone.

Species of Brachiaria grasses native to Africa cover an estimated half-million square miles of Brazil’s pasture lands. Credit: Clint Peck

In Brazil, concentrated cattle feeding is further down the list when it comes to using feed grains. Foremost, feed grains power a cash-based export industry, pouring billions of dollars into Brazil’s economy.

In 2022, cattle feeding accounted for only 5% of Brazil’s total feed grain use. Most feedlots are in the country’s temperate southern regions, where breeds other than Nelore, which respond better to crossbreeding and concentrated feeding, can be raised. Elsewhere, feed grains are used in limited amounts for replacement development and in grass/grain hybrid fast-finishing programs.

Related: Global BEEF Series: Leveling the playing field on quality beef

The ‘Forest Code’

The Brazilian government, facing tremendous global pressure, is increasingly moving to protect its forested areas by enacting widespread and complex environmental laws.

The “Forest Code” limits the amount of privately owned land that can be cleared for any purpose – and today the restrictions vary depending on region. Landowners in the Amazon region must maintain 80% of their property in “forest preserve,” where no grazing or any other commercial use is allowed.

This reserve requirement can be lower in other biomes – for instance, 20% in the Pantanal and 35% in the cerrado. But throughout the country, grazing is prohibited in most riparian areas, wetlands and designated Indigenous lands.

And while there’s been widespread skirting of the Forest Code and its provisions, Brazilian regulators are using new enforcement technology. The code is enforced using Brazil’s Rural Environmental Registry, a cadastral-based surveillance system mandatory for all rural property owners.

Competition and subsidies

Throughout Brazil, ranchers must compete for land more suited to soybeans, corn, cotton, sugarcane, coffee and a myriad of other crops. Due to land-use restrictions, many ranchers say they can’t continue to grow by expanding their land base. Instead, they must invest in new technology and intensively manage their property.

But as Brazilian ranchers move away from frontier expansion to more intensive management, input costs inevitably increase.

Enter the government – and the taxpayers. Brazil’s “Crop Plan” is designed to support credit-reliant agricultural sectors. It allows loans with favorable interest rates for farmers of all sizes who need to invest in technology, machinery, on-farm infrastructure, along with a slew of other day-to-day inputs. The credit subsidies pegged at $88.2 billion (U.S.) in 2024-25 set a record for the country. Subsidized interest rates range from 2.75% to 7.5%, while non-subsidized rates can surpass 15% annually.

Still, agricultural leaders say the funds are insufficient for farmers struggling with unpredictable commodity prices and soaring production costs.

Brazil’s agricultural producers continue to push for more off-farm infrastructure, such as water management systems, crop storage facilities, local market centers, better roads and more ports and railways. They also want help in export promotion, trade agreements and currency stabilization.

Subsistence and sustainability

Meanwhile, social programs like Terra da Gente , operating under the controversial banner of agrarian reform, are being used to relocate upwards of 300,000 families from Brazil’s crowded cities. The families will be settled on expropriated “unproductive” land, “regularized” public land and private land seized due to unpaid taxes.

Reformers say this government policy will promote subsistence farming while boosting labor availability throughout the country’s interior.

Brazil’s former Minister of Agriculture Marcus Vinícius Pratini de Moraes summed up global competition in a past BEEF interview by stating, “In the future, competition in agriculture will not be between farmers; it will be between treasuries.”

Pratini went on to say, “The treasury of Brazil simply cannot compete against the treasuries of the U.S. or many European countries.” He warned, though, in the end true sustainability in agriculture must evolve via market channels and not at the taxpayer’s expense.

Editor’s Note: In this series on global beef production, the author draws on years of studying and analyzing global beef systems. His extensive travel to many of the world’s leading beef-producing countries offers a firsthand, objective look at the challenges and opportunities beef producers worldwide face in a highly competitive protein marketplace.

Next up is Argentina, and Australia is on deck.