Grim forecast for cattle industries

By Dairy News

A NEW report by a private US think tank predicts massive changes to livestock industries including cattle and dairy within 10 years.

By 2030, modern food products will be higher quality and cost less than half the price of the animal- derived foods they replace, the dairy and cattle industries will have collapsed, and the rest of the livestock industry will follow.

That’s according to a new report, “Rethinking Food and Agriculture 2020–2030 — The Second Domestication of Plants and Animals, the Disruption of the Cow, and the Collapse of Industrial Livestock Farming,” released by RethinkX, a US-based organisation that analyses and forecasts the scope, speed and scale of technology-driven disruption and its implications across society.

“This is primarily a protein disruption, driven by economics,” Tony Seba, RethinkX co-founder and report co-author, said. “This is not one disruption but many in parallel, with each overlapping, reinforcing, and accelerating the others.”

“Technology we call precision fermentation and a new production model called Food-as-Software are dramatically driving down the costs and driving up the quality of manufactured proteins,” report co-author Catherine Tubb said.

“The industrial livestock industry is one of the oldest, largest, and most inefficient food-production systems in the world. Modern ingredients and the foods are about 10 times more efficient across the board — from land and water use, to feedstock consumption and energy use.”

Precision fermentation (PF) is a process that enables the programming of micro-organisms to produce almost any complex organic molecule.

Its costs are dropping exponentially because of rapid improvements in underlying biological and information technologies. The cost to produce a single molecule using PF has fallen from $1 million per kilogram in 2000, to about $100 today.

Assuming existing technologies and using well-established cost curves, the report projects that these costs will fall below $10 per kilogram by 2025, and that these proteins will be five times cheaper than traditional animal proteins by 2030 and 10 times cheaper by 2035.

By 2030, modern food products will cost less than half as much to produce as the animal-derived products they replace. At the same time, this new production system has the potential to spur competition and fast iteration of products that are ever cheaper and ever better: more nutritious, healthier, better tasting, more convenient, and more varied, as long as open markets and nutritional standards are protected.

The report details the way different parts of the cow (collagen, milk, meat and leather) and the markets they serve will be disrupted separately and concurrently by different technologies and business-model innovations that overlap, reinforce and accelerate each other.

The authors refer to this disruption as “death by a thousand cuts”. As product after product that comes from cows faces competition from cheaper, higher-quality modern foods, demand for cow products will decrease, triggering a death spiral of increasing prices for the industrial livestock industry, decreasing demand and reversing economies of scale.

“The key to understanding the disruption of the cow is that PF only needs to disrupt 3.3 per cent of the milk bottle (the key functional proteins) to bring about the collapse of the entire cow milk industry. This is a B2B disruption, not just a simple one-for-one substitution of end products, and does not hinge on changing human behaviour,” Mr Seba said.

“PF proteins are already being produced commercially. Costs are decreasing exponentially while quality and variety increase exponentially. Industrial cattle farming industry will collapse long before we see modern technologies produce the ‘perfect’ cellular steak at a competitive price.”

The report analyses the way technology and new models of production flip the current food production system on its head. Instead of growing a whole cow to break it down into products, PF designs and customises individual molecules to build products. Development is done in a manner similar to the software industry: companies and individuals will build components within layers of the equivalent of a software stack that can be used according to individual needs. The food developer is like an app developer, using the stack that is most appropriate according to market needs.