Monitoring the Middleman: Supply Chain Networks and Environmental Sanctions in Brazil's Cattle Sector
Presented by:
Tara Mittelberg
Practice Job Talk
Department of Agricultural and Applied Economics
University of Wisconsin-Madison
Thursday, October 8, 2026
3:45 pm-5:15 pm
Taylor-Hibbard Seminar Room (Rm103)
Zero-deforestation supply chain commitments, in which companies promise not to purchase agricultural commodities from producers with environmental infractions, have had limited effectiveness in part because buyers do not monitor their full supply chains. In the Brazilian cattle sector, new policies will soon require slaughterhouses and importers to monitor and block both direct and upstream suppliers with illegal deforestation. Using a unique dataset of millions of cattle transactions in the Brazilian Amazon, I assess where non-compliant cattle entered clean supply chains and to whom ranchers rerouted cattle after being blocked by slaughterhouses. I first identify the properties that most frequently bridged non-compliant and compliant supply chains. Just two percent of compliant properties handled two thirds of cattle that moved from non-compliant to compliant supply chains. These highly connected “Brokers” were located earlier in the supply chain than the indirect suppliers targeted by current monitoring initiatives. Then, with a staggered difference-in-differences approach, I test how ranchers reorganized their supply chain relationships following government-imposed environmental sanctions. Sanctioned ranchers reduced sales to monitoring slaughterhouses and increased by the same magnitude sales to other ranchers, particularly those already connected to non-compliant supply chains. They also increased sales to co-owned properties, which subsequently increased their own purchases and sales, including to monitoring slaughterhouses. These results identify high-risk points in cattle supply chains and show how sanctions can shift activity toward closely connected properties.