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Brazil is among the world’s most efficient and competitive beef producers. In the Chinese market, for example, Brazilian beef is traded at prices about 40% lower than American beef. Meanwhile, the chain operates with tight margins across its different links. With more than two decades of experience following Brazilian livestock production, helping to explain this paradox is Thiago Bernardino de Carvalho, a researcher at Cepea/Esalq-USP and a specialist in market intelligence for animal protein chains.
In an exclusive interview with My Minerva Foods, he shows that the answer goes beyond production costs and involves standards, animal health, trade agreements, trust and the country’s reputation as a global food supplier, factors that depend on coordination among producers, industry, retail, sector organizations and government.
Holding a master’s degree in Applied Economics and a Ph.D. in Business Administration, and serving as an MBA professor specializing in strategic supply chain management, Bernardino also examines the challenges facing the domestic market: better understanding Brazilian consumers, communicating quality attributes, turning convenience into perceived value, and strengthening connections between producers, industry, and retailers. The interview also explores technology, sustainability, international demand, and the role of people in the next stage of the supply chain.
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- Efficiency, technology and cost
- Price, value and competitiveness
- The consumer still needs to be understood
- Growing without opening new areas
- The human challenge of the next decade
My Minerva Foods: In the study you presented at the Tecnocarne event, you highlighted the complexity of the livestock chain. Could you summarize the factors that make it so complex and heterogeneous?
Thiago Bernardino: When we think about cattle production, we are talking about very different animals. And that product reaches a consumer who is also very different. The idea of looking at the chain from pasture to plate is to show that a decision in one link affects all the others. There is no point discussing technology, automation or industrial efficiency without understanding what comes before, within the farm gate, and what comes after, in retail and with the final consumer.
My Minerva Foods: Does this complexity help explain why the meat chain has gone through so many transformations in recent decades?
Thiago Bernardino: Yes. Brazilian livestock production has changed a lot. And if we think about modern livestock production, we are talking about a relatively young activity. We had the import of genetics, mainly Zebu genetics, in the 1960s and 1970s; the development of pastures with Embrapa; then came nutrition, animal health, management, genetics, technology. A very important structural change happened in 1994, with the Real Plan. Until then, cattle were a store of value, an asset that tracked inflation, had liquidity and worked as a form of wealth protection.
My Minerva Foods: With economic stabilization, cattle cease to be a store of value?
Thiago Bernardino: Exactly. From that point on, the producer needs to make money through efficiency. So cattle begin competing with sugarcane in São Paulo, with soybeans, corn and other activities in states such as Paraná, Goiás and Mato Grosso do Sul. Cattle move farther north in the country, reach the Amazon, hit a wall, and it becomes clear that expansion through land clearing is no longer possible. The answer becomes productivity. In any activity, when I need efficiency, I need knowledge, technology and management. That is when professionalization within the farm gate becomes necessary.
My Minerva Foods: Beyond the producer, did the industry also go through an important transformation in that period?
Thiago Bernardino: Definitely. A major paradigm shift came with the opening of capital, around 2007. From then on, shareholders began demanding efficiency from managers, and the pursuit of productive, financial and operational efficiencies became much stronger. The cattle buyer, who before was often in offices, became internalized within the slaughterhouse structure. The industry began to demand a more suitable animal, more standardized and more aligned with what the market wants.
My Minerva Foods: And at the same time, did the Brazilian consumer also change?
Thiago Bernardino: Very much so. Between 2004 and 2012, Brazil went through an important cycle of income growth. With more income, Brazilians began consuming more animal protein, especially beef. But consumers also became more demanding.
So, on one side, the industry demands more efficiency. On the other, the consumer demands more quality. And the producer has to respond. These movements push the entire chain to another level.
My Minerva Foods: Was China another stage in this change?
Thiago Bernardino: I would put China as a fourth paradigm shift, because it was an important driver of technological and productive change in the chain. The external market comes in and says: “I want Brazilian beef, but I want young beef, up to 30 months old, and I’ll pay for that.” That changes the game. The slaughterhouse adapts to deliver, but it also demands standardization, partnership and a response from the producer. When the producer realizes there is additional pay for producing that animal, he invests, adapts management, uses technology and improves standards.
Efficiency, technology and cost
My Minerva Foods: The China cattle showed that producers respond when there is a clear demand and associated remuneration. But to consolidate a culture of efficiency, technology and sustainability, is the challenge to make this transformation reach a very heterogeneous universe of producers?
Thiago Bernardino: That is one of the major challenges. Technology can come from the producer, by their own decision. It can come from the input industry, which has an important role in introducing solutions. And it can also come from the slaughter industry, which acts as a catalyst, presenting processes, tools and inputs that help the producer deliver better cattle. But we need to look at the producer’s reality. Brazil has around 5 million productive establishments. There are studies showing that about 300,000 farms have monthly net income of around R$7,000, something that could be classified as a more capitalized range. But millions of farms have very low income, often close to a minimum wage after expenses. So when we talk about small and medium-sized producers, technology cannot be expensive. That is why the input industry, associations, unions and slaughterhouses have an important role.
My Minerva Foods: For the industry, the fact that cattle account for about 80% of its costs changes the way sector efficiency should be viewed?
Thiago Bernardino: It does, because for a long time the question was: “How do we reduce this cost?” But the question becomes: “How do we work with this high cost?” I need to reduce losses, automate processes, improve standards, make better use of the carcass, understand what the consumer wants. What stands out is that even with major players, an internationalized industry and a strong presence in the export market, margins remain tight. It is a complex activity, with narrow margins across the chain. The producer has tight margins, the slaughterhouse has tight margins and the consumer is also under pressure.
Price, value and competitiveness
My Minerva Foods: If all links operate with tight margins, how do you explain the paradox that Brazil has one of the world’s most competitive meats and yet Brazilian consumers still see it as expensive?
Thiago Bernardino: Within the farm gate, Brazil is highly competitive. But when we start looking at taxation, logistics, infrastructure, transport costs and the cold chain, all of that weighs on it. I like to use wine as an example. A Chilean wine leaves the Aconcagua Valley and arrives in Piracicaba cheaper than many high-quality Brazilian wines that come from Bento Gonçalves. That shows how the tax burden and cost structure penalize Brazilian businesspeople. It is similar with meat. The cost of transporting Brazilian beef to China, for example, can be twice the cost from the United States.
My Minerva Foods: When people talk about the price of beef in Brazil, the explanation often falls almost exclusively on the loss of income. But some data suggest the equation is more complex: research on child nutrition shows high consumption of ultra-processed foods even among vulnerable families; at the same time, recent surveys indicate that part of the budget that once went to food and beverages has been shifted to other expenses, such as online betting. In this scenario, are we only looking at price and income when we should also be discussing access, convenience, information and perceived value?
Thiago Bernardino: Beef is not expensive only in absolute terms. The issue is the value I am willing to pay for that product. That is economics: consumer preference, taste, convenience. A person may prefer to pay R$200 for a tub of whey protein than R$100 for a picanha steak. And when they buy picanha, they are not buying just picanha. They are buying beer, vinaigrette, charcoal and sides. The barbecue becomes a consumption occasion. So it involves communication, coordination and convenience.
In the 1980s and 1990s, the chicken chain managed to establish a very strong message: “chicken is healthy.” And of course, chicken breast is a light meat, widely used in diets. But if I take a chicken thigh, it can have more fat than a filet mignon. Still, the communication worked. In addition, chicken was one of the first chains to work very well with portioning. That is an important logic: consumers pay for convenience, for ease, for practicality. And beef needs to look at that too.
My Minerva Foods: So there is an important difference between price and value?
Thiago Bernardino: Exactly. Price is one thing. Perceived value is another. Consumers may love beef, but if income is strained, if they are in debt, if they would rather buy a better phone, drink a beer or spend on something else, they make choices. It is a matter of income, yes, but also of preference, access, convenience and perceived value. That is why, when we talk about competitiveness, we cannot look only at producing cheaply. The chain needs to show quality, standards, convenience, origin and trust. It needs to make consumers understand why that product is worth more.
My Minerva Foods: And in the international market, how does this relationship between production cost, price and perceived value play out?
Thiago Bernardino: One thing is production cost. Another is price. And another is captured value. We have one of the lowest production costs in the world and one of the lowest live cattle prices. Brazil’s productive efficiency in the factors of production is very strong. We have herd volume, favorable natural conditions, technology and still a lot of room to improve productivity. But beef that the United States sells to China can approach US$10,000 per ton, while Brazil sells something around US$6,000. That is a brutal difference, almost half the price. Part of that is explained by standards and perceived quality. Brazil has quality and standards, but not yet in a way that is as consolidated and uniform as it could be.
My Minerva Foods: What factors help build this perception of value?
Thiago Bernardino: First, animal health. That is central. Brazil has made great strides and we have a favorable scenario. If, in five or ten years, Brazil shows that it removed foot-and-mouth vaccination and still remained free of the disease, that will greatly reinforce confidence. Second, trade agreements. Everything is negotiation. The country needs to know how to negotiate its agreements better. And the third point is trust. Trust is essential.
My Minerva Foods: Trust in what sense?
Thiago Bernardino: Trust in the country, in the chain, in animal health, in reputation. I am a big fan of Brazil, I defend Brazil, but we need to convey trust. Imagine you arrived from Mars and needed to buy beef. You would look at reports, talk to people in the market, see who has the lowest cost. Naturally, Brazil would appear. But then you look at the country’s history: political crisis, Operation Weak Flesh, image problems, deforestation, child labor being associated with agribusiness. That affects trust. So it is not enough to be competitive. We need to coordinate better, communicate better, negotiate better and build a reputation.
My Minerva Foods: In other words, the next stage of Brazilian competitiveness may not be just producing more cheaply, but capturing more value?
Thiago Bernardino: Yes. Cost competitiveness is a huge advantage, but it does not solve everything. If the product is not perceived as standardized, if consumers do not understand the difference, if the international buyer does not fully trust it, you sell for less than you could. So the chain needs to keep gaining efficiency, but it also needs to learn how to turn that efficiency into value. That is a central point for the future of Brazilian beef.
The consumer still needs to be understood
My Minerva Foods: When you talk about turning efficiency into value, that necessarily involves better understanding the consumer. Does the meat chain know the Brazilian consumer well?
Thiago Bernardino: I am always concerned when I am going to talk about agribusiness or livestock production, because often we talk as if people already have a basic understanding of the subject. And that is not the case. In my own family, for example, there are engineers, doctors, people from industry. And very real questions come up: “Does strawberries have a lot of pesticides?”; “Is cattle deforesting the Pantanal?”; “What is chorizo?” So those inside the chain look and say: “But do I still need to explain this?” Yes, you do! Consumers are not obliged to know. They have heard their whole lives about striploin, ribeye, meat for barbecue, meat for everyday use. Suddenly, there are new names, new cuts, new concepts. I do not see a problem in changing the name, in making it more sophisticated, in adding value. But it has to be communicated.
My Minerva Foods: Does this communication difficulty also affect the perceived value of beef?
Thiago Bernardino: Very much so. When consumers better understand what they are buying, they accept paying more or, at the very least, understand why that product costs more. Retail and industry can be drivers of transformation. They can say: “Look, this product has more consistency, more quality, an origin, a process behind it.”
My Minerva Foods: You mentioned Angus as an example of how communication can change consumer perception. What does that case show?
Thiago Bernardino: Angus is a very interesting case of branding and communication. I supervised an MBA student who worked for a company supplying burger patties to McDonald’s. At the time, they were launching McAngus, and we did a before-and-after study around the launch. One of the questions was: “What is Angus to you?” More than 300 questionnaires were used, not only with people from the sector, but with consumers in general. Before the campaign, many people thought Angus was a car brand, or something else. A small share associated it with a cattle breed. After the launch, a much larger share of people began to recognize Angus as a cattle breed or as beef. That shows the power of communication. A well-done campaign educates consumers, builds knowledge and helps add value.
My Minerva Foods: Could this lack of communication also be related to the difficulty of promoting beef as a category, and not just as a company’s product?
Thiago Bernardino: I think so. Understanding the Brazilian consumer would be extremely important. And that is not simple, because national research is expensive. But it is something that could be led by associations, organizations, industry, retail and supermarkets. It would be very interesting to live the Brazilian consumer’s day to day, understand how they buy, how they choose, what they value, what they do not understand, what pushes them away from beef and what brings them closer. This profile changes over time. Today’s consumer is not the same as 20 years ago.
My Minerva Foods: In the international market, Brazil invests heavily in market opening, agreements and trade promotion. Is something similar lacking in the domestic market, including to address negative perceptions about livestock production?
Thiago Bernardino: There is a lack of more coordination. The domestic market is huge and strategic. Often, each company does its own work, its own branding, its own communication, and that is natural. But there are issues that belong to the chain as a whole: quality, safety, nutrition, sustainability, origin, cuts, preparation methods. When we talk about perceived value, we are not just talking about advertising. We are talking about consumer education, information at the point of sale, closer ties with retail, showing how to prepare, how to choose, how to make better use of it.
Beef still has very strong appeal in Brazil. It is desired. But desire does not mean automatic purchase. Between wanting and buying there is income, convenience, information, trust and the consumption occasion.
My Minerva Foods: In short, understanding the consumer becomes as strategic as producing well?
Thiago Bernardino: The chain needs to understand the consumer, communicate better, build trust and show the product’s value. If it does not do that, it will continue producing very competitive beef, but perhaps selling below its potential or failing to occupy important spaces in the domestic market.
Growing without opening new areas
My Minerva Foods: When we talk about growth in livestock production, the discussion often runs into sustainability. But in this case, does growing necessarily mean occupying new areas?
Thiago Bernardino: Not necessarily. In this case, growth means making better use of the assets that already exist. In Brazil, we have producers who are extremely efficient and others who still work with very low productivity. This appears across all chains. In corn, for example, there are producers yielding 369 sacks per hectare in highly technological regions, while others yield 40 sacks. Livestock is the same. We have producers getting five arrobas per hectare and others getting 50.
So, when we talk about growing, we are often not talking about opening new areas. We are talking about reducing that distance.
My Minerva Foods: When we look at the market, where will the demand be to sustain that growth?
Thiago Bernardino: I mainly see the Middle East, Asia and African countries. That is where population growth is, and also income growth. And more income means more animal protein consumption. Europe and the United States have a different dynamic. They are more mature markets, with aging populations and slower growth. Europe, in particular, has a different discussion about consumption, sustainability and protecting the local market.
The human challenge of the next decade
My Minerva Foods: Looking ahead to the coming years, what should be the biggest challenge for the Brazilian beef chain?
Thiago Bernardino: In the short term, I usually say the big challenge is infrastructure. But in some way, that is a path Brazil has the conditions to solve. In the long term, the big challenge is people. Even with process automation, there will still be many decisions to be made. So, no matter how much technology advances, the sector will continue to depend on well-prepared people, critical thinking, with management and decision-making skills.
My Minerva Foods: After more than 20 years following the sector, what still impresses you most about Brazilian livestock production?
Thiago Bernardino: What impresses me most about Brazilian agribusiness, and Brazilian livestock production in particular, is the resilience and entrepreneurship of the Brazilian cattle producer. It is a producer working with extremely high capital costs, high interest rates, an open-air industry—the farm—subject to climatic, political and economic risks. And yet they keep producing. It is a chain that has proven resilient and in constant reinvention. Whatever is put to the test, the chain takes on and responds to. And it is able to place a very efficient product in any market and in different situations.
