Circular bioeconomy in livestock production: harnessing crop by-products in MERCOSUR/MERCOSUL

Economic significance of Mercosur: As one of the world’s largest economic blocs, Mercosur plays a key role in global food production and trade. Regional bioeconomy strategies: Examining Mercosur’s approaches provides insights into successful circular economy practices. Policy and future development: Lessons from Mercosur’s experiences can guide policy frameworks to enhance sustainability in livestock production The increasing global population and the rising demand for sustainable food systems have highlighted the potential of agricultural co-products as viable alternatives for enhancing livestock production efficiency (FAO, 2017). Among agricultural commodities, by-products derived from agro-industrial processing present an economically and environmentally sustainable solution, aligning with the principles of a circular economy (Nath et al., 2023). Agriculture is a key economic sector in South America, representing a heterogeneous percentage of Gross Domestic Product (GDP) depending on the country (Pratt and Conroy, 2020; World Bank, 2024; Figure 1). Since 1865, the agricultural sector has gained relevance within the South American economy, with the main crops being soybeans (Glycine max (L.), corn (maize)—Zea mays L.), rice (Oryza sativa (L.), wheat Triticum aestivum (L.), and sugar Saccharum officinarum L.); (Rodríguez et al., 2019). Agricultural value added as a percentage of total national GDP (Agro-GDP) in MERCOSUR countries (2023). Source: World Bank, 2024. Southern Common Market or Mercosur is an economic and political bloc that originally comprised Argentina, Brazil, Paraguay, and Uruguay. Mercosur was founded in 1991 to create a common market so as to stimulate development and strengthen democracy, and had early successes, including a ten-fold increase in trade within the bloc in its first decade (Luís and Oliveira, 2012). Venezuela was a member until 2016, but is now suspended indefinitely. Bolivia became a full member in 2024. Chile, Colombia, Ecuador, Guyana, Peru, and Suriname are associate members of Mercosur. For the five major global food crops—soybeans, corn, rice, wheat, and sugarcane. Mercosur is the world’s third-largest producer (Figure 2). Data within the founding members recognized Argentina for its production of soybeans, corn, wheat, beef, and wine, positioning itself as a key player in the global agricultural industry. Brazil stands as the largest global producer and exporter of soybeans, coffee, sugar, and poultry, while also maintaining significant production of beef and corn. Paraguay is one of the leading global producers of soybeans, with soybean meal serving as a key by-product in livestock feed, particularly in poultry and swine production. Uruguay has established itself as one of the world’s leading exporters of rice, barley, rapeseed, malt, soybeans, and beef (USDA, 2024). One of the practical challenges is the use of land for producing crops to feed animals. The use of such crops as feed competes with their use as food and opens the possibility of them being replaced by feed co-products without negatively affecting animal productivity (Herrero et al., 2013; Sandström et al., 2022). Map of the founding Member States of MERCOSUR and signatories of the Treaty of Asunción are Argentina, Brazil, Paraguay, and Uruguay (blue), and the main agricultural products produced. Source: https://www.mercosur.int/ modified by authors. Livestock production is one of the most important economic activities in the member countries of Mercosur (Sterzer and Azizah, 2021). International demand for products derived from livestock has grown, with increasing emphasis on environmental greenhouse gas emissions and animal welfare (Weindl et al., 2017). The concept of circularity in livestock production systems involves the reuse and recycling of resources within the system, aiming to minimize waste and reduce the environmental footprint of agricultural activities (Velasco-Muñoz et al., 2021). Co-products, which are residues or by-products generated during the processing of food for human consumption, are often rich in essential nutrients and hold significant potential for use in formulating animal diets (FAO, 2024). Several countries in South America developed bioeconomy strategies, some of which are part of broader regional economic and innovation strategies in response to the European Commission’s call for sustainable production strategies. Others have emerged more from academic, scientific, or national sustainability policy objectives (Garnett et al., 2013; Rodríguez, Rodrigues, and Sotomayor, 2019). Crop processing by-products, including cereal bran and distillers’ grains (i.e., from biofuels and brewing; Pecka-Kielb et al., 2017), sugar by-products (molasses and beet pulp; Kühnel et al., 2011; Shukla et al., 2022), oilseed meals (rapeseed, soybean, sunflower, palm kernel, sesame, cottonseed, peanut, etc.; Cheng et al., 2022), and citrus pulp (Brambillasca et al., 2013) are viable strategic bioeconomy options. The objective of this work is to summarize the state-of-the-art regarding the utilization of crop by-products to promote circularity within livestock production systems within the founding members of Mercosur. This analysis aims to identify commonalities and variations in their application across the region. Additionally, the study examines examples of regional bioeconomy strategies, highlighting key approaches to inform future practices and policy development. Over more than three decades of coordinated collaboration, Mercosur has been established as a major global player in agricultural production and exportation, significantly impacting both regional economies and international markets. The sustained economic growth and development demonstrated by these countries have made Mercosur an increasingly attractive market, which has progressively expanded through the inclusion of new member states (Table 1). During the second half of the twentieth century, global soy production grew tenfold from 27 million tons to 269 million tons (WWF, 2016). This increased production was the result of a major expansion in crops, including wheat, corn, sorghum, and canola. Production of these crops by MERCOSUR members is predicted to double by 2050 (Bruinsma, 2009, WWF, 2014). MERCOSUR main crop production 2023 -24 (founding members MERCOSUR main crop production 2023 -24 (founding members Paraguay has a total area of 406,752 km2 and is divided into two regions by the Río Paraguay: the Oriental Region and the Occidental Region. The economy is based mainly on agriculture and livestock for export. Between 2013 and 2014, approximately 52,381 km2 were dedicated to temporary and permanent crops (DGEEC, 2015), particularly soybean (35,000 km2), corn (8,000 km2), and wheat (5,600 km2). Soybeans are one of Paraguay’s most important crops, and a commercial production of 11 million tons was recorded in 2023–2024 (CAPECO, 2021). The use of soybean by-products plays a crucial role in the production of beef, the country’s main animal export product. Soybean hulls can be included in dairy cattle diets at up to 10% of the total diet dry matter. In January 2025, soybeans and derivatives injected US$338 million into Paraguay’s economy (CAPECO,2025 ; USDA, 2024). Corn production ranges from 4 to 5 million tons per year. Corn bran, germ meal, gluten, and gluten meal are feed products traded worldwide. Corn bran is commonly used as an energy source for ruminants due to its lower price than grain and its nutritional value tent (the bran is the fiber-rich outer layer that supplies B vitamins, iron, copper, zinc, magnesium, antioxidants, and phytochemicals). Corn bran can be used to completely replace corn grain in concentrate-fed cows without reducing milk quality, although protein supplementation is necessary (Zhang et al., 2021). Canola (Brassica napus (L.), with a production of 60 million tons, has the potential to capitalize on canola byproducts, such as canola meal, for use as animal feed (Yang and Shen, 2018). Sunflower (Helianthus annuus (L.) production reached 48 million tons during the 2021–2022 period, reflecting the growing importance of this crop in both oil and by-product production. This production volume contributes to the availability of sunflower meal, which can play a key role in animal feed formulations in this region (Paraguay Sunflowerseed Area, Yield and Production, n.d.). In 2023, Paraguay exported US$2.8 millionWorth of Cassava (OEC, 2025; OEC, 2025) . Moreover, Cassava (Manihot esculenta (Crantz.) processing generates several by-products, such as cassava peels, pulp, and bagasse. The leaves, branches, and peel of cassava can also be used as feed after being dried and ground, following the same process for making cassava flour (Bizzuti et al., 2021). The use of coconut (Cocos nucifera (L.) and almond (Prunus dulcis (Mill.) expeller, also known as oilseed cake or meal, as feed for ruminants, poultry, and swine—is a valuable strategy for improving sustainability, reducing feed costs, and utilizing agro-industrial byproducts. Colmán Martínez, (2010) used coconut expeller as a substitute for other feed ingredients in swine diets and demonstrated an improvement in the quality of meat and fat in finished pigs. The digestibility of coconut fed to sheep was evaluated by Corrales et al. (2015). Coconut pulp expeller has also been used as feed for cattle (Gonzalez et al., 2020), and is highly sought after in times of drought, by cattle ranchers in the Chaco (McDonald, 2007) . Almond expeller is used as feed for pigs (Ahammad et al., 2024; De Ciencias et al., 2015), chickens (Moradi Yeganeh et al., 2020), and tilapia (Amarowicz et al., 2005). Brazil has an approximate area of 8,515,767 km² and is divided into five major geographic regions: North, Northeast, Center-West, Southeast, and South. The North region includes much of the Amazon rainforest, while the Center-West features areas like the Pantanal and the Cerrado. The Southeast and South regions are the most industrialized and agriculturally developed. Agriculture and livestock are cornerstone sectors in Brazil’s economy, contributing significantly to its GDP and reinforcing the nation’s status as a global leader in agribusiness. The country also excels in crop and plant co-product production, dominating global markets for soybeans, sugarcane, coffee, and orange juice. Soybean production alone supplies 14% of the global market, highlighting Brazil’s role in enhancing global food security (CONAB, 2023) . Advancements in technology and sustainable practices have been instrumental in maintaining high productivity while addressing environmental challenges. Precision agriculture and integrated crop-livestock-forestry systems (ILPF) have improved resource efficiency and reduced greenhouse gas emissions, enhancing the sector’s economic sustainability (EMBRAPA, 2024) . The growing demand for sustainable agricultural systems has heightened interest in the efficient utilization of by-products from Brazilian agriculture as animal feed. These co-products, derived from crop processing and agro-industrial activities, present significant opportunities to minimize waste, enhance resource efficiency, and promote bio-circularity within livestock systems. Among the most commonly utilized co-products are soybean meal (41 million tons/year), cottonseed meal (6.8 million tons/year), pelleted citrus pulp (16 million tons/year), and soybean hulls (USDA, 2022). These by-products serve as essential sources of protein, energy, and fiber, thereby making substantial contributions to sustainable livestock production practices The incorporation of co-products as feed ingredients exemplifies bio-circularity by promoting waste valorization and reducing environmental footprints. For example, Cassava by-products, such as cassava peels and cassava bagasse, have been identified as valuable feed sources for ruminants. Bizzuti et al. (2021) reported that cassava by-products serve as energy-rich alternative feeds due to their high starch content. The study also highlighted their accessibility and cost-effectiveness, particularly in regions with substantial cassava production. These findings align with the principles of bio-circularity, as they valorize agricultural residues and reduce waste. By-products from the biodiesel industry, including glycerin and oilseed meals, are increasingly being incorporated into ruminant diets. Oliveira et al. (2012) highlighted the nutritional advantages of these by-products, particularly their high energy and protein content. Additionally, the study emphasized their role in reducing feed costs and improving resource efficiency, thus contributing to a circular economy within livestock production systems. Cottonseed meal and cake are well-recognized protein sources in livestock diets. Research by Paim et al. (2016a, 2016b) investigated the inclusion of cottonseed co-products in the diets of rams during the peripubertal period. These studies demonstrated the safe use of cottonseed by-products without adverse effects on reproductive health, highlighting their potential to enhance feed efficiency while reducing reliance on conventional feed resources. Various agricultural by-products, such as fruit and grain residues, have also been evaluated for their effects on rumen fermentation and methane production. Bizzuti et al. (2023) investigated the degradability and methane emission reduction potential of several by-products, demonstrating their ability to reduce methane without compromising nutrient availability for ruminants. These findings underscore the environmental benefits of incorporating co-products into animal diets, which is a critical aspect of bio-circular agricultural practices. Lipid supplementation has emerged as a promising strategy for mitigating enteric methane emissions in ruminants. Takahashi et al. (2024) investigated the use of macadamia (Macadamia integrifolia) by-products as a lipid source in sheep diets, reporting significant reductions in methane emissions. Complementing these findings, Marconato et al. (2021) evaluated the use of increasing levels of macadamia nut cake in lamb diets. Their study demonstrated that macadamia nut cake can be incorporated without compromising growth performance, carcass traits, or meat quality, underscoring its potential as a sustainable feed alternative. This innovative strategy highlights the potential of lipid-rich agricultural residues to mitigate environmental impacts while maintaining livestock productivity (Marconato et al., 2021; Takahashi et al., 2024) Brazil’s agricultural co-products represent valuable resources for advancing sustainable livestock production systems. From cassava by-products to biodiesel industry residues, these materials support cost-effective and environmentally friendly feeding practices. Furthermore, their integration into livestock systems aligns with the concept of bio-circularity by transforming agricultural residues into high-value inputs, thereby closing the loop within agricultural ecosystems. Continued research and policy support are essential to expand the adoption of these practices, ensuring their scalability and long-term sustainability in Brazilian agriculture. Argentina covers about 2,780,400 km² and is divided into six major regions: Northwest, Northeast, Cuyo, Center, Patagonia, and Pampas. The Pampas region is the main agricultural and livestock area of the Argentina has been one of the major grain exporters the early et al., a nutritional of grain per per grain to feed million et al., Argentina contributes of global soybean production, and of both corn and wheat global production, and is the main exporters of grain and products from these crops in the market and Since the early grain production has corn, and soybean alone for more than of production, with million to soybeans year. Argentina is in soybean and the leading exporter of soybean and is the second and exporter of corn and wheat, for of total crop area and Since its food demand is to future increase in crop production in Argentina result in a increase in and 2012). is an of cassava in Cassava is for its for human food and 2015), the and are fed to livestock or as et al., 2021; et al., 2023) Argentina the in global with more than of being exported of their recognized high quality (USDA, 2024). 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