Who Controls the World's Cows?
If we're serious about producing healthier food and reducing heat-trapping gases in our atmosphere, then we need to answer this question.
1. Headline
Agroforestry Partners was established in 2022 to expand agroforestry practices around the United States, with a longer-term goal of expanding beyond these borders into the global market. Agroforestry is defined as the commingling of trees with traditional row crops and/or animal grazing operations, with numerous studies pointing to outsized societal benefits when all three are managed together in place. The mixture of trees, crops, and animals is commonly termed “silvopasture”, with the latter remaining our future north star for ecological and social impact. This got us thinking…if the world wants to truly scale impactful silvopasture going forward, then we need to know who controls the world’s cows. These people or entities are critical future partners.
2. What does this mean?
Broadly, agroforestry as a category helps to stem soil erosion, reducing average soil loss by 40%. It keeps roughly 50% more fertilizer in the soil and thus out of our waterways and drinking water. It puts up to 30% more microorganisms in the soil, which help with crop yields and nutrient uptake…yielding us healthier, more abundant food. Agroforestry can also lead to a 50% increase in pollinator presence, which helps crop yields further. Additionally, the trees themselves absorb heat-trapping carbon dioxide gases from the atmosphere. Scientific studies have shown that when livestock animals are added to baseline agroforestry systems, all of these aforementioned numbers increase in value. The reason? Heavier grazing animals tend to press topsoil down as they move around, keeping this precious resource in place. Their saliva and bodily excretions add more nutrients to the land. And they help to maintain natural cover and balance in an ecosystem which, in turn, encourages healthy levels of biodiversity.
It is also important to mention that scientific evidence is in favor of meat and dairy products from grazing animals relative to grain-fed animals, as the former are considered much healthier than the latter. As one specific example, grass-fed beef and dairy products have much better balance in their omega-3 and omega-6 unsaturated fat profiles, relative to grain-fed products that have been shown to be high in omega-6 at the expense of omega-3 (due to a heavy amount of corn vegetables in the animal’s diet). While omega-6 fats are important, the developed nation’s consumer diet is overloaded with these fats today, missing out on omega-3s that deliver myriad benefits, including immune system support and a healthy heart. Hungry for more? Buy this book and read it cover to cover.
[As a side note, livestock animals themselves are a large single source of planet-warming methane gases, mainly as a result of their belching activity as they work to digest grasses, grains, and other feed products. Though not the focus of this report, there is exciting work being done by a multitude of companies on producing feed additives, vaccines, and even cow wearables(!) to reduce livestock methane emissions.]
This got us thinking. If the world is going to truly scale silvopasture in a meaningful way, then we need to have a firm grasp on who controls the cows. The partnership of these people and entities will be essential as coalitions work to implement practices that make sense for farmers/ranchers, animals, industry, and consumers. Why cows? There are a lot of them out there…with over 1 billion animals being marketed into the dairy or beef sector worldwide. Sheep matter as well, with estimates ranging up over 750 million animals worldwide (sheep are raised for their meat and their wool). So, who controls this livestock around the world? Spoiler alert…it ain’t the farmers.
First, it’s important to conduct an inventory of where these animals are located. As the graph below shows, India leads the way with almost 200 million head of cattle and upwards of 380 million head of livestock when buffalo and sheep are included. China has a large number of sheep in place alongside ~60 million head of cattle. Brazil is a global beef powerhouse, with roughly 225 million head of cattle in the country. Pakistan and Ethiopia have sizable numbers of cattle and sheep together, while the U.S. is a large beef and dairy producer with over 90 million head of cattle. Also of note, Australia raises a large number of sheep and a respectable quantity of cattle.
India is a unique situation, whereby the cow is considered a sacred animal and usually able to live out the majority of its life on smallholder plots around the country (India is therefore an exception to the global rule that most farmers/landowners don’t own or control their livestock). While this presents both challenges and opportunities for scaling silvopasture locally, the Indian government has leaned in aggressively on agroforestry in recent years. Likewise, China still maintains a disparate livestock and meat/dairy sector (similar to Pakistan and Ethiopia), with many smallholders controlling their own animals. For our purposes of this report, lack of available data from China also makes it difficult to analyze corporate entities or cooperatives that control the current livestock supply chain, and thus our attached database focuses elsewhere in the world.
So, who controls the world’s cows? To be sure, our global livestock database below makes it clear that each large livestock country has its own unique set of competitors in place. However, entities like JBS, Marfrig, Danone, Lactalis, Nestle, and others stretch across state boundaries and into multiple markets. Some countries have a more competitive industry set while others are more concentrated. Some countries also include multiple types of entities (i.e., corporate processors and member cooperatives).
The United States is a good snapshot of all these dynamics together. In the beef space, the industry is concentrated, with four companies making up over 80% of the market. Tyson Foods slaughters over 6 million head of cattle per year, with JBS right behind it and Cargill closer to 5 million head per year. Marfrig/National Beef slaughters roughly 3 million head of cattle per year. Between the four of them, they are responsible for decidedly larger network effects, as each animal through the harvest shoot has a host of other maternal/replacement animals associated with its own production. In total, these four companies are arguably responsible for over 50 million head of cattle in the U.S. each year.
On the dairy side, the U.S. is considerably more competitive. The industry is also comprised of a meaningful number of cooperative producer processors together with straight corporate processors. In fact, the largest dairy entity in the United States - Dairy Farmers of America (DFA) - is a cooperative business, responsible for over 2 million head of cattle each year.
Altogether, we believe that our global livestock database can be useful for stakeholders as they consider how best to ultimately scale silvopasture around the world. Although these types of operations start small, we would still argue that strategic thought around this data is vital. Armed with a clearer understanding of livestock responsibility and control within industry, we can all begin to look at unique factors for regions, farmers, and corporate actors to best structure a silvopasture system for that locale. Ultimately, it is our hope that corporate entities would work to subsidize tree planting on their farmer-partner lands with a goal of more humane animal treatment (movement from indoors to outdoors), more nutritious meat and dairy products, premium prices in the marketplace, more sustainable production practices, and a wealth of unknown revenue opportunities.
[Disclaimer: figures in our world livestock database rely on third party sources over multiple years and sometimes make country-level estimates based on this information. Exact figures should not be solely relied upon for material decision making purposes, as a result.]
Agroforestry Partners World Livestock Database:
3. Key takeaway
Silvopasture - the commingling of trees, crops, and animals together - is a subset within agroforestry that offers a wealth of nature-based and broader societal benefits for human beings. However, its operation is relatively limited around the world. Agroforestry Partners exists as a financing vehicle for the expansion of agroforestry within the U.S., with global silvopasture implementation as our north star longer-term. We believe that a proper accounting of livestock control throughout the world is essential for identifying the right partners in each region, and we supply our global livestock database to the public such that strategic coalitions can be more impactful and better move forward on this important work.
4. Where to find us
Check us out on our homepage or come connect with us on LinkedIn.
We’re an investment fund that raises money from long-term investors and then pays farmers and landowners to plant trees on their properties alongside crops and/or animals, returning nutrients to the soil and our food while delivering attractive, uncorrelated returns to investors.