Deforestation and retail prices of Brazilian beef: a preregistered product-level econometric analysis

Cattle ranching is the leading proximate driver of deforestation in Brazil. Efforts to eradicate deforestation could incur a trade-off between forest conservation and agricultural production, as conservation constrains the supply of new agricultural land and requires investments in traceability and improved agricultural production, potentially negatively affecting consumer welfare through increased retail prices. We estimated the effect of deforestation on consumer prices using supply chain data for 2980 beef products in Brazil.

We investigated the effect of deforestation on retail prices using a regression model with neighbourhood fixed effects and covariates, including sanitary inspection level, product type, distance from meatpacker to retail store, supply chain monitoring, and retail store size. The model was informed by a directed acyclic graph and the analysis plan was preregistered.

We found no evidence that deforestation rates in regions where beef products were sourced affected retail price (R$-1·26/kg, 95% CI -2·66 to 0·13 [US$0·26/kg, 0·515 to 0·025]). Similarly, the implementation of sustainable procurement criteria by meatpackers did not affect prices (R$-1·71/kg, -4·00 to 0·57 [US$0·33/kg, -0·78 to 0·11]). The main predictors of price were product type, sanitary inspection, and supply chain length.

Beef products with varying deforestation footprints appeared to be marketed through similar supply chains and priced similarly to consumers. This lack of transparency along the supply chain creates a market failure and weakens incentives for sustainable production.

Norway's International Climate and Forest Initiative; Fonds de la Recherche Scientifique; European Research Council.