NewsNew analysis brings greater transparency to Brazilian cattle supply chains
Companies buying beef from Brazil should take a data-driven approach to assessing the risks of slaughterhouses and farms supplying cattle linked to deforestation, according to a new report by Trase.
The complexity and opacity of Brazil’s cattle supply chain has long been a limiting factor in efforts to curb deforestation. Cattle pass through multiple farms – breeding, rearing and finishing – before reaching slaughterhouses. Moreover, many farms and slaughterhouses have multiple suppliers, making tracing individual cattle from pasture to plate very difficult.
While significant investments have been made in cattle traceability beyond direct suppliers, including the adoption of subnational SeloVerde systems and adoption of GTFI guidelines for monitoring indirect suppliers into audit requirements, there remain important data gaps and challenges.
A new report on analysis by Trase offers insight into these challenges. We assessed existing approaches for estimating cattle sourcing zones in the Brazilian Amazon to identify the best data-driven method. We then used it to calculate the cattle supply sheds and associated cattle deforestation risks for 1,249 slaughterhouses across the whole of Brazil.
The resulting dataset – which is freely available at trase.earth – provides a useful tool for companies and financial institutions aiming to comply with growing numbers of voluntary and regulatory frameworks, such as the EU Deforestation Regulation (EUDR), the Taskforce on Nature-related Financial Disclosures (TNFD) and Science Based Target Network (SBTN) requirements on risk assessment and disclosure.
Data-driven supply shed assessments
Traditionally, facility-level risk assessments rely on the radius method to estimate supply sheds simply by drawing a circle around a facility such as a slaughterhouse. However, this gives only a rough estimate as it does not account for geographical and logistical considerations such as roads and rivers.
Instead, we applied a ‘municipality-weighted’ approach. This method acknowledges that slaughterhouses do not source uniformly; rather, they draw the majority of their cattle from specific, often nearby, municipalities. By weighting these supply flows, we created a more detailed and nuanced map of risk exposure. This method uses logistics data such as cattle transport records, road networks and sanitary inspection records that are publicly available, although its quality and availability varies considerably.
Informing due diligence
The results of our assessment of data across Brazil reveal the concentration of risk within the cattle supply chain. Only 33 slaughterhouses of the 1,249 facilities studied accounted for 60% of the total deforestation exposure; a further 90 slaughterhouses adding 30% more risk. The vast majority – 1,023 facilities – contributed less than 10% of Brazil’s cattle deforestation exposure. The findings suggest that companies and financial institutions should focus their due diligence efforts on a small subset of higher risk slaughterhouses where most deforestation exposure exists.
The value of this approach has been demonstrated by a major consumer goods company that used Trase’s supply shed data to benchmark its 23 direct-supplier slaughterhouses in Brazil. The company moved beyond simple radius modeling to classify each slaughterhouse using a data-driven method that captured its actual sourcing patterns. Facilities were labeled ‘at risk’ if half or more of their sourcing volume originated in municipalities classified as high risk for cattle-related deforestation.
This identified 12 slaughterhouses as at-risk, five of which sourced two-thirds of their cattle from high-risk regions. The results enabled the firm to prioritise engagement with at-risk suppliers to assess their risk mitigation strategies including farm-level traceability and compliance monitor systems.
Based on the report, Trase makes four important recommendations for governments, companies and financial institutions:
- Improve data quality and transparency: The Brazilian government should prioritise filling gaps in existing datasets, particularly cattle movement records (Guia de Trânsito Animal, GTA) movement records and property registry data (Cadastro Ambiental Rural, CAR) and ensuring they are better integrated and publicly accessible.
- Adopt data-driven risk assessment: Companies and financial institutions should move away from simplified radius-based estimations. By using municipality-weighted models, organisations can identify high-volume sourcing regions that are also high risk, enabling more effective engagement with suppliers.
- Coordinate global standards: There is a need for alignment among standards organisations to provide guidance on using data-driven methods. This will encourage broader corporate disclosure and standardise how deforestation, greenhouse gas emissions and other impacts are reported when farm-level data is unavailable.
- Address shared risks through landscape Initiatives: Because risks such as deforestation linked to indirect suppliers are shared by multiple slaughterhouses, it makes sense for companies to collaborate through landscape-scale investments. By sharing the costs of monitoring, legal compliance and pasture restoration, companies can improve the compliance of entire regions, reducing the risk for every participant in the supply shed.
