The Beef Carbon Equation
Beef is commonly vilified for its contribution to climate change, carbon emissions, deforestation, and water use. Rightfully so because we are destroying biodiverse ecosystems for pastureland and monocropped feed cropland. However, not all forms of cattle husbandry are ecologically destructive. Cattle can be managed such that beef is produced in an environmentally responsible way. As commonly repeated, it’s the “how” not the cow.
Beef and the Environment
Cattle (beef+dairy) emit an estimated 5.0 gigatonnes of CO21 annually, which is equivalent to ~62%¹ of all livestock emissions and 7+% of total greenhouse gas emissions². Beef is also resource-inefficient. One kg of beef protein emits 295 kg of CO2 relative to 55 kg of pork protein or 35 kg of chicken protein. One kg of beef meat requires ~4,000 gallons of water relative to ~1,100 gallons for one kg of turkey, ~430 gallons for one kg of black beans, 250-800 gallons for one kg of cereal crop⁴, 250 gallons per kg of fruits⁵, and 86 gallons per kg of vegetables⁵. Agriculture uses 70% of global freshwater withdrawals (up to 95% in some emerging economies) so it is safe to say that cattle are a leading water suck globally).
By far, the two main drivers of livestock emissions are 1) enteric methane and 2) feed production¹. Enteric methane (44% of total emissions) refers to methane-heavy burps emitted during the digestive process, predominantly by ruminants (e.g. cattle). Feed production (41% of total emissions) includes emissions from spread manure on the fields, fertilizers, and deforestation from the expansion of cropland and pastureland into previously forested areas. Conversion to cattle pastureland is by far the largest driver of deforestation, driving 113M acres of deforestation from 2001-2015. The second largest driver, oil palm, was only responsible for 26M acres. Soybean, a common cattle feedstock, was the third largest at 21M acres.
Growing populations, demand for food, and appetite for meat compound the urgency. The FAO estimates that we will need 60% more food production by 2050 to meet the demands of a growing population⁴. From 2000-2019 alone, global demand for beef/ruminant meat grew 25%² and will continue to rise as per capita wealth rises in emerging economies.
Holistically managed, grass-fed, grass-finished ("regenerative") beef as solution
Holistically managed grass-fed, grass-finished beef is touted as a potential solution to beef’s environmental problem. Note that the “grass-finished” distinction is important as generally calves are grass-fed, but 97% are grain-finished in feedlots. I will call it “regenerative beef” as holistically managed grass-fed grass-finished is a mouthful (no pun intended). Essentially, regenerative beef systems rehabilitate grassland and improve ecosystem and soil health through rotational grazing. The system can fix the dire beef carbon equation by avoiding emissions from feed production (it’s all pasture) and offset enteric methane emissions by sequestering carbon in the soil.
With holistic management (the system espoused by Allan Savory), livestock is circulated across multiple paddocks to prevent overgrazing. The process is designed to mimic wild grazing behavior (e.g. bison roaming the Great Plains). Managed appropriately, cattle fertilize the land, break compacted soil, help prevent erosion, prune weeds, and aid stronger root systems.⁷ A deeper dive on the specifics can be found on Christian Ebersol’s blog.
White Oak Pastures, a vocal leader in regenerative beef and one of 14 US Savory Hubs, exemplifies successful regenerative livestock management. In addition to cattle, they produce goa, lamb, pork, turkey, chicken, duck, goose, guinea, and rabbit along with 60 varieties of vegetables on 3,200 acres. In essence, maximizes symbiotic relationships in their farm’s ecosystem by mimicking wild ecosystems. For example, “the cows graze the grass, the sheep and goats prefer the weeds, and the poultry species peck at the roots, bugs, and grubs. All species naturally fertilize the land. This way, the pastures are grazed and fertilized in three different ways.” The animals “spread urine and feces to microbes which feeds the plants which feeds the animals.”¹²
The emissions data is promising - White Oak Pastures conducted an LCA with General Mills and Quantis that concluded their beef has a carbon footprint 111% lower than conventional US beef with a net carbon sink effect by accounting for soil carbon capture⁷. A peer review of the LCA indicates 66% lower emissions than conventional beef⁹, which, although not net negative, still represents a dramatically lower footprint.
Common Objections to Grass-fed Supply
Before assuming that grass-fed, grass-finished beef is the environmental beef savior, I want to raise common objections to investing in regenerative grass-fed beef.
1) Rotational grazing has not been proven to demonstrably improve soil health and carbon content relative to continuous grazing
There does not appear to be much debate around the notion that pasture grazing reduces the environmental footprint of beef production relative to conventional feedlots. The most interesting analyses I’ve seen include the LCAs of White Oak Pasture’s rotational grazing system from Quantis and Frontiers in Sustainable Food Systems. Quantis indicated that White Oak Pasture produced beef with 111% lower GHGs than conventional whereas Jason and team concluded 66% lower. Regardless, it’s much lower with other soil health and animal welfare benefits.
However, a report from Meat & Livestock Australia¹¹ concluded that, in continuous grazing systems, meat production per animal head was equal or greater in 92% of studies, meat production per area was equal or greater in 84% of studies, and plant production was equal or greater in 87% of studies.
The rotational vs continuous grazing debate is important because of the greater labor and implementation costs of rotational and…
2) Converting beef production to rotationally grazed beef may not be feasible due to land needs
Conversion to cattle pastureland is the leading cause of deforestation globally. Accelerating deforestation to increase rotationally grazed beef supply is not a tenable trade-off. Although the environmental footprint of rotationally grazed beef is much lower than conventional, FISFS also acknowledged production required 2.5x more land¹¹. This begs the question - do we even have enough suitable pastureland to meet current and growing demand for beef?
The Back to Grass report¹⁰, leveraging analysis from Dr. Allen Williams, presents analysis addressing this question. In summary, conversion of cropland used to produce grain feed, would be roughly sufficient to replace US grain-fed beef with grass-fed. The US produces ~30M grain-fed head annually, which requires ~36.6M grass-fed head given lower carcass weight. ~17.6M acres of US cropland are dedicated to producing corn and other grains for feedlots. If converted to pastureland, the regenerated cropland would be sufficient to produce ~33M grass-fed head, relative to the 36.6M supply hole. Plus, there are un- and under-utilized sources of pastureland including 15-20M acres of idle grassland and 20M acres in the USDA Conservation Reserve Program.
Even if the land calculations work out, there remains the question of whether grass-fed beef can reach the cost basis necessary to break into mainstream retail and foodservice, which leads to the next objection…
3) Grass-fed beef will not be cost-effective to scale
I believe that we need to see a pathway to producing grass-fed beef at competitive pricing to conventional feedlot beef if we want systemic change. In other words, I’d like to see grass-fed beef economics work at a 0% premium to conventional beef to make the switch to environmentally sustainable (or at least dramatically less destructive) beef a no-brainer.
Again referencing the Back to Grass report¹¹, the typical grain-fed feedlot sells their meat at $1.87 per lb with razor-thin margins (3% gross margins and <1% EBITDA). An “aspirational” very large grass-fed aggregator would be able to generate 25% gross margins and 17% EBITDA margins selling meat at $2.52 per lb (a +35% premium to conventional). The analysis indicates that at price parity (in this case $1.87 per lb), the scaled grass-fed producer would be roughly breakeven on gross margin and unprofitable (-11%) at the EBITDA level.
I have not been deep in the weeds of these P&Ls, but I am interested to see a compelling financial analysis that indicates how grass-fed production can compete with conventional on price with scale, or the technologies / breakthroughs we need to balance the economic equation.
Practical Challenges to Scaling
Regenerative beef faces challenges across cost structure, data infrastructure, and education in order to effectively scale. For reference, the grass-fed market in the US accounts for $4Bn of sales, or 4% of the total beef market, of which only ~$1Bn is certified and labeled grass-fed.
As a guiding principle, I believe that any environmentally sustainable product must at least reach parity in cost and taste to be a scalable, economically sustainable solution. Grass-fed beef is typically sold at a premium of 30-50% over conventional beef (70% at retail), which is cost-prohibitive for margin-sensitive buyers (most corporations) and budget-sensitive consumers (most people).
The most commonly surfaced obstacle to profitability at lower prices is the lack of access to the largest slaughterhouses and processing plants that significantly lower per-head costs for the rancher. SLM in their Back to Grass report concludes that the largest federally-inspected plants can slaughter an animal for $100-120/head as the plants have immense scale (5,000+ head per day), mechanization, and vertical integration. The Big 4 in beef - JBS, Cargill, Tyson, National Beef - buy and process more than 80% of beef in the US and leverage their oligopolistic market power to grind down price and survive on thin margins with huge scale. Grass-fed, grass-finished producers are generally shut out of the lowest-cost processing plants and distribution channels as the minimum volume to sell to a Big 4 buyer is 500 head per week whereas most independent grass-finished operations only sell 50 head per year. Even the largest aggregated grass-finished brands struggle to meet this volume. As a result, smaller, regional plants process most grass-finished beef at a price of $150-300 (or sometimes up to $800 for very small-scale producers).¹⁰
Labor costs and education are also concerns for rotational grazing practitioners. Ranchers must spend a lot more time with the animals in a holistically managed grazing operation, especially relative to an industrialized feedlot, and need to be trained on profitable implementation of the system.
In addition to economic disadvantages relative to the US conventional beef industry, domestic grass-finishers have to compete with relatively cheap grass-finished imports. Markets like Australia, Argentina, and Brazil are able to produce grass-finished beef at lower cost due to cheaper land, cheaper labor, and a year-round grazing climate.
Lastly, grass-finished beef producers must prove environmental impact reduction with verified, reliable data. Even at cost parity, many buyers will require carbon inset accounting before building a grass-finished beef supply chain. Today, there is a lack of data infrastructure and analytical rigor to track the results of grass-finished operations and prove environmental impact with certainty.
Concluding Thoughts
First of all, although I do believe that there is a way to produce ecologically healthy beef at scale, the average consumer’s appetite for beef is not sustainable. The US alone consumed 21% of global beef production! Limit beef consumption, and buy from local grass-fed sources whenever feasible. Alongside the central guiding principle that climate change solutions must achieve cost & quality parity to truly be sustainable, I also believe that each consumer is as responsible as corporations. The double-edged sword of capitalism is that corporations will amorally follow profit incentive - if consumers change their purchasing behavior, corporations will change their production methods to match.
1) Focus on soil health through grass-fed, grass-finished husbandry practices to maximize soil carbon sequestration in the beef production process. Not only does this maximize the emissions reduction effect of soil carbon sequestration, but also minimizes the emissions impact of grain feed production and associated deforestation. Multi-species rotational grazing management systems seem promising, but I still have open questions around the incremental benefit of rotational vs continuous grazing systems and the economic feasibility at scale of rotational grazing. Regardless, it’s obvious that we need to transition from conventional grain-fed feedlot beef production to pasture-raised, grass-fed beef as quickly as possible.
2) Develop solutions to help tilt the scales towards pasture-raised, grass-fed production including silvopasture, animal genetics, and grazing technology. I’m intrigued by the benefits of silvopasture to reduce heat stress on animals, improve biodiversity / ecosystem health, increase carbon sequestration, provide an additional forage source, and generate income. Innovation in cattle genetics to thrive on pasture could improve the economic and environmental equation of grass-fed beef by improving animal health, reducing time to maturity and/or reducing enteric methane emissions. Lastly, we need to leverage technology to reduce the overhead costs of intensive grazing management.
3) Abate enteric methane emissions as possible with feed quality improvements, feed additives, and/or methanogenic vaccines. The argument for/against various solutions requires a follow-up deep dive. However, it’s clear that it’s an area worth exploring. Any solution that reduces enteric methane emissions in a cost-effective manner without sacrificing animal, human, or ecological health would significantly improve the environmental equation of beef production.
4) Right-size processing economics. Much of the challenges can be solved with greater scale/aggregation in grass-fed beef, but I am also interested in innovations for more cost-effective slaughter and processing.
5) Data infrastructure. Improved data infrastructure could have a domino effect on grass-fed beef demand. Today, aside from cost constraints, buyers have diminished interest in procuring grass-fed beef without verifiable proof that these production practices meaningfully reduce their supply chain emissions and that their specific suppliers are appropriately implementing these practices. Similarly, consumers do not have the visibility at purchase to make the environmentally conscious decision even if the cost is not prohibitive. Imagine a world where the environmental and nutritional impact of grass-fed vs conventional beef is transparently communicated to buyers, consumers, and carbon markets with verifiability and fidelity.
Sources
¹Food and Agriculture Organization of the United Nations
²World Resources Institute
³Foodprint.org
⁴Food and Agriculture Organization of the United Nations
⁵Global averages from the Water Footprint Network per Denver Water Org
⁶World Resources Institute
⁷Into the Green
⁸White Oak Pastures LCA
⁹Frontiers in Sustainable Food Systems peer review of WAP LCA
¹⁰Back to Grass
¹¹Meat & Livestock Australia cell grazing report
¹²Cal State Chico profile on White Oak Pastures
