We can argue about who regulates it, and we have. We can worry about what it's called; we’ve done that as well. But there is one thing for sure. If the billions of dollars going into the production of artificial meat are successful, agriculture as we know it will be changed in ways that we can’t anticipate and traditional farmers won’t like.
We’ve had a bit of a reprieve, we traditional farmers have, as we’ve watched with no little satisfaction the troubles visited upon some of the early start ups in the industry. Farmers may not know how to spell schadenfreude, but we’ve certainly experienced it in the past few months. By last fall, Beyond Meat had lost 93% of its peak value and laid off 19% of its workforce. And, Leonardo DiCaprio has presumably lost most of his investment in the company.
Plant-based meat failed its early market tests, so farmers have largely moved on to worrying about other things. On a personal note, I’ve tried a plant based burger and can testify that my reaction was thirst. Salt can cover up a multitude of sins, but you’d better have a drink of water handy if your hamburger is made from plants.
While we farmers were enjoying the travails of our tormentors, the venture capital business has doubled down with much of the activity centered around the production of lab grown meat. In the fall of last year, the first lab grown meat was approved by the Food and Drug Administration. Chicken grown in a laboratory by a company called Upside Foods (formerly known as Memphis Meats) will soon be available in restaurants, but only after the company passes further inspections by the Food Safety Inspection Service of the USDA. Upside Foods has raised $608 million dollars in a series of funding rounds and has opened a plant in California that will produce 50,000 pounds of chicken annually.
The Good Foods Institute reports that 5 billion dollars of venture capital was invested in the alternative protein market in 2021, with $1.4 billion invested in the production of cultured meat. Some of that venture capital was spent on a $123 million dollar plant in North Carolina owned by a company called Believer Meats. According to the company, the plant will produce 10 metric tons of meat per year. The company claims that it can produce cultured chicken, beef, pork, and lamb. Should the company choose to produce only beef, the total annual output of the plant will be around the same amount of beef that comes from 30 steers. That’s not an entirely fair comparison, because if you’re in the business of producing beef in a bioreactor, I’m sure you’d concentrate on more valuable cuts. Wholesale primal rib is selling at just over $5 a pound. If you believe that Believer Meats can produce prime rib, then the plant might produce $110,000 dollars of annual revenue. For an investment of $123 million dollars.
I’m sure my math is wrong, and I’m also sure that the venture capitalists making these investments are planning on a learning curve closely akin to vertical. And for all I know, they may be right. An Israeli company recently reported that it could produce lab grown chicken breasts for $7.70 a pound. They also claim that further cost declines are in the offing. If true, and if they can recreate that success in other meats, traditional livestock farming had better prepare for some stiff competition from artificial meat.
On the other hand, it is not unusual for startups to make pricing decisions that depend upon venture capital to sustain their business. When you have a vision, careful cost accounting can take a back seat. Food delivery businesses and temporary office rentals are two recent examples that come to mind, with companies in both industries pricing their wares at levels that only made sense because of hundreds of millions of dollars of venture capital sloshing around. There are serious disagreements about the ability to scale the technology economically, and also questions about maintaining the safety of the large, no, very large bioreactors needed to make an actual dent in the immense market for meat. Perhaps those concerns are best outlined in this article. Lab-grown meat is supposed to be inevitable. The science tells a different story… Of course, backers of lab grown meat discount these worries, and history is full of examples of scientific breakthroughs that disrupt and even destroy existing industries.
Virginia Postrel, writing in the Wall Street Journal, “Synthetic Meat Will Change the Ethics of Eating," assumes that cultured meat will be economically competitive and is more interested in the reaction of consumers to the new technology. Postrel is something of a futurist and is impatient with those who criticize the technology because it isn’t “natural.” Which, when you think about it, causes some problems for those of us in farming as well.
It ought to be hard to argue that seeds produced with the latest bioengineering techniques are perfectly fine but laboratories dedicated to the production of cells indistinguishable from traditionally grown beef are not. Well, it would be hard to argue if we were consistent as farmers or even as humans, but we are not. When consumers figure out that their KC Strip was cultured in a lab by a bunch of technicians sporting gear nearly identical to that worn by the crew cleaning up a hazardous waste spill, I imagine the “yuk” factor will be high.
It is interesting that journalists writing about lab grown meat concentrate on the perceived benefits to animal welfare, but most of the promotional materials from the companies actually trying to produce the stuff concentrate on its putatively smaller carbon footprint. Consumers will presumably pay a premium for cultured meat because of these advertised benefits, but it’s not clear how much. One thing is for sure. The premium people will pay is less than the premium people say they will pay in market surveys.
My money, literally, is on the side of those who say that lab grown meat won’t be economically competitive anytime soon. But I’m aware there are people who used to work for Polaroid and were sure that digital photography was no substitute for film. Agriculture should be thinking very seriously about what a future with affordable cultured meat will mean for our industry.
Blake Hurst is a farmer and greenhouse grower in Northwest Missouri.For more ag news or opinions, visit www.Agri-Pulse.com.