Cattle raising plays a substantial role in conversion of tropical moist forests (TMF) in tropical Latin America; in Brazilian Amazonia and in Central America, it plays the dominant role. This factor seems likely to grow rapidly in the years ahead, both in total volume and in proportion to other conversion factors in Latin America. This will be due mainly to the demands of the international beef trade; the bulk of additional beef produced will not be consumed by citizens in the countries concerned but will be exported to the developed world. Cattle raising in TMF is dealt with here from a standpoint different from that of Chapter 9 (Regional Reviews: Latin America). It is analyzed for what it reveals of ecologic-economic linkages among the international community. These resource relationships between, e.g., the United States and Brazil, are expected to become increasingly important.
Between 1950 and 1975, the area of man-established pasture in Central America more than doubled, almost entirely at the expense of primary moist forests. The numbers of beef cattle also more than doubled, though the average beef consumption on the part of Central American citizens actually declined, the surplus meat being exported to North America among other developed-world markets. Between 1966 and 1978, 80,000 km of Brazil's Amazonian forests were converted into 336 cattle ranches supporting 6 million head of cattle, under auspices of the Superintendency for Development of Amazonia (SUDAM). In addition, some 20,000 other ranches of varying size have been established. Cattle raising is now the dominant cause of forest conversion in Brazilian Amazonia, and its effects could well increase. Originally, Brazil hoped to become the world's leading beef exporter by the early 1980s, but it does not seem likely that it will reach this goal. Indeed, Brazil remains a net importer of beef, because management of many, if not most, of its pasturelands has not met expectations. Similar initiatives, though not so expansive, are being implemented in the Amazon territories of Colombia and Peru, fostered in certain instances by the Intr-American Development Bank, the World Bank, and the UN Development Program. Many ranches become unprofitable within less than 10 years, because the productivity of artificial grasslands declines. But a rancher can generally obtain another patch of forest to clear, thus practicing a new and broad-scale variation of shifting agriculture.
A main stimulus for this outburst of cattle raising is the growing demand from markets in the developed world for "noninflationary" beef (Table 5). On the one hand, people in North America, Western Europe, and Japan want to continue increasing their consumption of beef, and the demand for beef, according to projections of the Food and Agriculture Organization of the UN (FAO), will rise more rapidly until at least 1990 than for any other food category except fish. On the other hand, cattle owners in many countries of the developed world have recently found it insufficiently profitable to produce additional beef, so there has been rapidly growing inducement for developing countries to fill the gap. In terms of marketplace prices, these developing countries are often well placed. Due to low costs of land and labor, grass-fed beef can be produced in tropical Latin America at only one-quarter the price of similar beef in the United States beef imported from tropical Latin America into the United States in 1978 averaged $1.47/kg, compared with a wholesale price of $3.3 for grass-fed beef produced in the United States. Hence the steadily climbing volume of beef imported by the United States from tropical Latin America: 111 million kg in 1971 and 133 million kg in 1976, for an annual growth rate of 4 percent. True, these imports amount to only around one-quarter of all U.S. imports of beef, most of the supply coming from Australia and New Zealand, but as a factor contributing to conversion of Latin America's TMF, this international beef trade is far from trifling.
Equally important, the price of U.S. beef has been rising far faster than the overall cost of living. Of all grocery items contributing to inflation in the United States, beef is considered a prime indicator. In 1975, a Montana steer was selling for $0.63/kg at the packing plant; by early 1979, the price had risen to over $1.50. During the first 3 months of 1979, retail prices for beef climbed by 9 percent (to $4.90/kg), and they are expected to climb an additional 25 percent by the end of the year. In fact, prices for U.S.-produced beef are not likely to stabilize until the end of 1980, and are not likely to decline appreciably until 1982. This is because the national herd, which totaled 132 million head in 1975, has been allowed to decline to around 111 million head by late 1978, on the grounds that it was becoming unprofitable for cattlemen to maintain their former inventory of stock. Now that the high beef prices encourage cattlemen to rebuild their herds, it will take at least 3 years (due to the lengthy production cycle) before the national herd recovers its mid-1970s size.
Since beef from tropical Latin America is grass-fed, it is considered suitable for only a limited sector of the U.S. beef market--the fast-food trade with its hamburgers, frankfurters, and other processed-meat products. As it happens, this is the fastest growing part of the food industry in the United States. From the early 1960s, fast-food chains have boomed, until they were growing in the mid-1970s at 20 percent per year, or 2 1/2 times faster than the restaurant industry overall. Over half of all sales are now accounted for by only eight fast-food corporations, notably the major hamburger chains. During the course of 1979, hamburger prices are expected to grow by at least 20 percent. Faced with price jumps of this scale, the U.S. Administration decided to step up beef imports by 7.6 percent in June 1978 and by a further 5 percent in early 1979. Although these additional imports contribute less than 1 percent to the country's consumption of beef, the government estimates that they will trim a nickel off the price of a hamburger--and hardly any other initiative can do as much to stem inflation.
Therein lies the connection between difficulties of the U.S. domestic economy and the demise of TMF in Central America and Amazonia. The price of a U.S. hamburger does not reflect the total costs, and especially the environmental costs, of its production in tropical Latin America; and the American consumer, seeking best-quality hamburger at the least price, is not aware of the ramifications in forest zones thousands of kilometers away.
This topic has been dealt with at some length here, since "the hamburger connection" looks likely to supply ever greater pressures to convert additional TMF during the next few years at least.