Editor’s note: The following was written by Jonathan A. Campbell, Tara L. Felix, Elizabeth Hines and Robert M. Chiles, Extension specialists at Pennsylvania State University, for the Penn State Extension website.
Major meat packers, including Tyson and Cargill, are recognizing the potential market impacts of alternative protein through investment in cell-cultured meat companies and technologies.
Partnerships with meat packers may expand in cell-cultured meat production, as JUST (a start-up company specializing in plant-based protein and cellular agriculture) plans to issue commercial product licenses to traditional meat processing companies in exchange for royalties and prepayments.
Livestock producers, on the other hand, have a distinct, yet potentially overlapping, set of interests with respect to cell-culture meat production.
Relationships of livestock producers to meat packers currently take on a variety of forms.
In the pork industry, vertical integration occurs in full ownership or through contracted relationships with meat packers. These relationships may benefit from the support of their integrators, like Tyson, should the packer choose to differentiate between meat products they offer. However, they may also face further competition within their own system.
For pork, this means the demands for processed meats, such as sausages and deli products, may be met more so through the utilization of cell-cultured meat products, as sales of whole pork cuts continue to struggle outside bacon.
The beef industry is largely segmented, in contrast, and traditionally does not utilize an integrated relationship model with packers. This leaves beef cattle producers without an established relationship with a packer as much more vulnerable to market fluctuations and additional competition.
This may be why the NCBA and USCA have been very vocal in the labeling debate in order to protect the associations with a name they have created.
Regardless, the relationship between meat packers and cell-culture meat product start-up companies will directly affect integrated and partially integrated producers. Conversations among the packers and the poultry and swine producers are necessary to understand the impacts of this investment interest in cell culture-based meat production.
Interest in strategic engagement with the burgeoning cell-culture meat industry is growing among livestock producers. Indeed, new livestock markets may be created in conjunction with cell culture-based meat production.
For example, cellular agriculture depends on cell lines from healthy animals. This dependence will continue to mean a reliance on livestock production, but with an emphasis on fewer animals meeting specific needs.
Livestock producers who provide cell lines for cellular agriculture companies may therefore open new windows of opportunity for entrepreneurial producers, focusing on the diversity and specialty (genetics, welfare, health, nutrition) of their livestock products over quantity.
In such a system, Kobe beef may transition from being a luxury to one of the most widely consumed meat products.
Traditional livestock producers may also find economic opportunities in this expanding industry by leveraging their unique knowledge and expertise in product development, consultation, biosecurity, logistics, supply chains, agribusiness management and sales. Animal feed growers and processors, on the other hand, may find opportunities in providing feedstock for cell culture growth mediums.
The future of cell-cultured meat and food production could signify dramatic changes to global agricultural markets, however, livestock producers have long weathered risk, uncertainty and fluctuation in the market by embracing change, innovation and strategic adaptation. To quote Bill Northey, USDA Under Secretary for Farm and Foreign Agricultural Services, “Farmers are problem solvers, they think outside [of] the box.”
To be sure, many questions about the meaning and potential of cellular agriculture for traditional agriculture producers and consumers have yet to be answered. Participation in the conversations being held now, and likely those in the future, will be an important step for producers and consumers to make their voices heard as this discussion moves forward.