Editorial

Future of Cell Cultured Meat-a Reasoned Appraisal

mid the swirl of doubt concerning the technical and financial viability of producing cell-cultured meat, Didier Toubia CEO of Aleph Farms commented on the state of his industry in a recent posting on Fast Company.  Toubia states, “My colleagues and I are part of a dynamic business sector comprising over 100 companies and billions of dollars in investment”.  This is undisputed but the reality is that despite considerable investment none of the established companies has been able to transform from pilot level production to commercial-scale production in metal reactors. 

 

Toubia expresses confidence averring, “I’m optimistic about cultivated meats’ prospects of complementing conventional meat.” A laudable sentiment but unfortunately reality does not support his position to date. He is however correct in his statement that promoters of cell-cultured meat created optimism over the prospect of commercialization and promises of displacing conventional meat. Entrepreneurial hype was intensified by many environmental and welfare activists intent on ultimately destroying intensive livestock and poultry production. 

 

In this respect no one is more responsible for creating unjustified anticipation than the P.T. Barnum of faux food, Josh Tetrick who has presided over a string of unfulfilled promises extending over two decades. Now with shuttered production facilities in Singapore and facing a $100 million claim for breach of contract and failure to pay suppliers he is now embarking on a new line to solicit funding. He appears to have appropriated CRISPR as a buzzword claiming that this is a new approach to developing cell-cultured meat.  We have seen this movie before. In the 1990’s he claimed that a database of legume seeds was the key to developing plant-based foods including his now-forgotten mayonnaise and a non-competitively priced egg substitute.

 

In contrast, Toubia cautions patience stating “Cultivated meat is not a quick fix.  Regulatory pathways are not seamless.  At commercial scale production costs are formidable.  Reaching single-figure market share will take time.”  Where CHICK-NEWS differs from Toubia is his analogy with EV production.  In contrast to cell-cultured meat there is an evident demand for EV vehicles as demonstrated by the growth of this sector of transport especially with numerous brands and large-scale manufacturing and export from China.  In contrast, focus groups and market surveys have demonstrated a reluctance to consume cell-cultured meat even at a price comparable to conventional products.  The claimed environmental benefits are now questioned given the power and water requirements for production, even if eventually attained.  The opposition to cell-cultured meat is evident in the enactment of laws mandating descriptive labeling and banning either production or sale of cell-derived products in meat-producing states of the U.S. and in some E.U. nations.

 

The emerging cell cultivated meat sector would be well advised to heed the experience of the major agribusiness companies that introduced GMO crop varieties four decades ago.  It was anticipated that the wonderment of the science involved and the benefits to the farming community would translate into universal acceptance by consumers.  Producers of GM seeds failed to recognize that grocery shoppers were the actual market and not farmers who actually benefitted from GM technology. An evident measure of self-confidence bordering on arrogance was expressed in the marketing of GM seeds by the agro-biotech giants of the E.U. and the U.S. They were oblivious to the naysayers and the Luddites opposed to innovation and who successfully generated a message of potential harm.

As with many innovations, it is necessary to prepare the market and demonstrate benefits that could include safety, environmental compatibility and even welfare to encourage initial consumption.  Long-term adoption will depend on quality and price.  Failure to satisfy consumer expectations with respect to these important attributes is the reason for the current downturn in the plant-based meat alternative sector with falling sales and substantial losses.

 

There may well be niche opportunities for cell-cultured protein.  Toubia points to foie gras and seafood as products that would benefit from cell-cultured production and where a differential in cost would not be a deterrent to consumption.

 

It is unlikely that venture capital companies will see any return over the intermediate term from investment in cell-culture meat that has yet to become a commercial reality.  They had best be guided by responsible entrepreneurs with solid scientific and business credentials. Didier Toubia expresses a realistic assessment of the state of development. His reasonable and measured appraisal is devoid of hucksterism and unsubstantiated claims based on a combination of self-deception and avarice.  Both venture capitalists and aspirant manufacturers should carefully consider the sage comment by Toubia that “qualifying success and managing expectations are necessary and that cultivated meat is a marathon rather than a sprint.”

 

Poultry Industry News

Georgia Opposes U.S. EPA Effluent Guidelines

The Attorney General of Georgia, Chris Carr, has joined 26 other Attorneys General to oppose the Effluent Limitations Guidelines proposed by the U.S. Environmental Protection Agency.

 

Opposition to the proposed guidelines is based on the high cost of compliance that would increase the price of meat, poultry and egg products to consumers.  It is estimated that with the more stringent guidelines, EPA jurisdiction over 150 processing plants would be increased to 3,000 facilities.

 

The letter submitted by the AGs noted “Evident escalation in the intensity of regulations issued by federal agencies, harms the integrity of our judicial system and this Administration should stop abusing the legal system to achieve results it otherwise cannot get”.  Legality of the Effluent Limitations Guidelines is questioned since the proposed rule would extend the statutory authority of the Environmental Protection Agency under the Clean Water Act.

 


 

HPAI Continues in Taiwan

A ProMed report confirmed a recent outbreak of H5N1 avian influenza in Chang Hua County involving 20,000 hens that were depleted.  Previous outbreaks have occurred in Ping Tang and Tainan in February.  Since January “tens of thousands of hens” have been culled in Yunlin County resulting from exposure to H5N1 presumably from wild birds. 

 

With numerous small and intermediate-sized duck and egg farms in close proximity and a live bird market system for broilers, Taiwan is candidate for vaccination against avian influenza H5N1. This is based on the location of the island nation on migratory bird routes and a history of recurring avian influenza suggesting a seasonal endemic status justifying protection.


 

Child Labor Persists in Contract Cleaning Sector

The U.S. Department of Labor has filed for a temporary restraining order on Fayette Janitorial Services, LLC to prevent employment of minors in plant-cleaning operations.  According to documents submitted to the U.S. District Court for the northern district of Iowa, the company has employed minors in sanitation activities at plants in Iowa and Virginia.

 

A spokesperson for Perdue Farms that terminated the contract with Fayette prior to the Department of Labor action, stated, “Underage labor has no place in our business or in our industry.  Perdue has strong safeguards in place to ensure that all associates are legally eligible to work in our facilities and we expect the same of our vendors.”

 

The Department of Labor is intent on enforcing federal law relating to employment of children in dangerous occupations and generally safeguarding workers.

 

Fayette Janitorial Services, LLC, based in Somerville, TN, operates in 30 states with 600 employees.

 

In addition to contravention of child labor laws, the investigation will also include possible trafficking and exploitation. If documented, cases will be referred to the Department of Justice.


 

Ukraine Chicken Industry Resilient During War

According to USDA-FAS GAIN Report, UP2024-0004, released February 22nd, chicken production in 2024 will expand by 3.1 percent to 1.340 million metric tons.  Total imports will attain 52,000 metric tons and exports 440,000 metric tons with net exports representing 29 percent of production.  Of the 952,000 metric tons for domestic use, per capita, will attain 26kg (57 lbs.) assuming a population of 37 million.

 

Despite the invasion of Ukraine by the Russian Federation in 2022, the chicken industry has survived and expanded.  This, in part, is due to the location of facilities in the central and western regions of the Nation together with the availability of grains at relatively low cost.

 

Production in Ukraine is dominated by MHP SE, responsible for 70 percent of output.  This public-traded company has received loans through recent critical periods and enjoys the benefits of full integration from cultivation of feed ingredients, oil seed crushing, live production, processing and distribution.  In addition to MHP, medium-sized producers include Agrooven, Dniprovskyi, Volldymyr-volynsk, PTA Hofabryka, Hubyn and Ular.  Collectively, MHP and these companies are responsible for 90 percent of production.

 

Following the 2022 invasion, supply chains were disrupted and the Black Sea export route was closed.  Labor availability was impacted by workers who volunteered for military service and as a result of conscription.  During late 2022 and through 2023, infrastructure was repaired and the front line in the east of the nation was stabilized.  Following the collapse of the Black Sea Grain Initiative, Ukraine established export capability through the coast-hugging Humanitarian Corridor and by rail transport. Currently exports are restrained by a shortage of refrigerated containers.

 

The E.U. is the main importer of chicken from Ukraine based on tariff-free and quota-free market access granted by the European Commission. Other factors favoring Ukraine include proximity to E.U. markets and a favorable production cost relative to Eastern Europe.

 

Europe intends to impose tariffs above a level of 160,000 metric tons although below exports to the E.U. in 2023. In the event that Ukraine becomes non-competitive above the free-trade level as a result of tariffs, the nation will explore export opportunities for exports to the Middle East.

 


 

Transition of JBS From PSSI Proceeding

Packers Sanitation Services Inc. (PSSI) has issued a warning notice to the state of Colorado that employees would be laid off following termination of the contract to clean plants for JBS including Greeley Co.  JBS established an internal company cleaning service following the PSSI debacle over employment of under-aged workers.  It is understood that the displaced PSSI workers will be engaged by JBS subject to eligibility.

 

PSSI paid a fine of $1.5 million and entered into a consent agreement with the Department of Justice.  The CEO was replaced and the company appointed a qualified Compliance Officer.  Notwithstanding these changes PSSI has lost revenue and it will take years to rebuild image and credibility in the industry.

 

 

 

 


 

Ministry of Agriculture in China to Regulate Sow Numbers

To prevent overproduction and to limit the importation of feed grains and soybeans, the Agricultural Ministry of China will place a cap on the number of sows in the national herd and the expansion of farms producing pork. Overproduction has reduced prices resulting in a sharp decline in imports.

 

The Ministry statement included, “the normal retention and fluctuation in the range of fertile sows in production, capacity reduction and other measures set in the previous regulatory plan are no longer well adapted to ensure stable feed production under the new situation.”  The national target for breeding sows will be reduced from 41 million to 39 million.

 

Overproduction of pork, the preferred animal protein in China, with correspondingly low prices is deleterious to domestic broiler production and imports. Rationalizing production should level the playing field to the benefit of processors and exporters.


 

Mineral Oil Contamination Leads to Recall

MF Meats located in Falconer NY. has recalled 46 tons of raw meat products contaminated with mineral oil disallowed by FSIS.  Over the period November 26, 2023, through February 16, 2024, the Company used a nonapproved mineral oil in the place of food-grade lubricant due to an error made by a supplier.

 

The problem was recognized following complaints of abnormal taste leading to an investigation that disclosed the misapplication of mineral oil.  It is evident that a proportion of the recalled meat has been consumed although there have been no reports of adverse reaction.  As with all major recalls, FSIS will verify procedures relating to notification of customers and removal of affected the product from the market.

 


 

House of Raeford Planning New Plant in Aiken, SC.

The City Council of Aiken, SC. voted 6-1 to approve a procesOing plant to be built by House of Raeford.  There was general acceptance of the project, but with some concern over the volume of water required and the treatment of effluent.  Final approval will depend on passage of a water ordinance and approval of a tax agreement with Aiken County.

 

Predictably, the project has the support of the State of South Carolina since it will create employment opportunities for contractors and potential sales for farmers producing corn and soybeans.

 


 

Bezos Earth Fund to Invest $60 Million on Improving Plant-Based Meats

The Bezos Earth Fund will distribute grants to the value of $60 million to various research institutions including universities to improve the texture and taste of plant-based meat.  This allocation will be part of a $1 billion fund intended to “transform the food industry”.

 

Proponents of plant-based meat alternatives now recognize the lack of consumer acceptance of the category characterized by declining sales. Producers of faux meat that publish financial reports confirm losses. 

 

Andy Jarvis, Director of the Future of Food, at the Bezos Earth Fund, quoted in Bloomberg, observed that plant-based substitutes for meat “need to cost less and need to be more flavorful”.  This is a tacit admission of the inferiority of current plant-based products and lack of variety despite higher prices.


 

Impossible Foods Introduces New Packaging Image

Peter McGuinness, president and CEO of Impossible Foods recently announced the introduction of new packaging at the National Products Expo West.  McGuinness stated, “We want packaging that lived up to and reflected the deliciousness of our products while really popping on the shelf.”  He added, “What we want to do is educate consumers that they can still enjoy meat by incorporating into their diet a version that’s made from plants instead of animals.” 

 

McGuinness is clearly a marketing expert but appears to be insensitive to both accounting realities and the organoleptic properties of his products.  Plant based meat alternatives are clearly inferior with respect to appearance, texture and taste.  Shelf prices are higher than the product they purport to replace.  Although Impossible Foods is not a publicly quoted company and therefore does not release financial reports, competitors Beyond Meat and the plant-based division of Maple Leaf Foods confirm non-profitability.

 

Impossible Foods should concentrate more on improving the quality of the product since the packaging is discarded and not eaten.  The fact that the Bezos Earth Fund is making available grants to food science departments of universities to improve organoleptic qualities of plant-based foods confirms the reality of inferiority despite the Impossible Foods hype.


 

Shane Commentary

Animal Activists Persist in Litigating Poultry Line Speeds

The USDA Food Safety and Inspection Service will continue to allow operation of line speeds of up to 175 birds per minute under a waiver due to expire at the end of March 2024.  Increased line speeds are possible due to advances in the design and operation of killing, defeathering and evisceration equipment that incorporates a high degree of automation.  Close to 50 plants now operate at up to 175 birds per minute without welfare issues relating to either flocks or workers.

 

Notwithstanding the reality, animal rights organizations including the HSUS, Animal Outlook, Mercy for Animals and kindred organizations are pursuing litigation to deprive the USDA of the right to grant waivers and to restrict line speeds in future rule-making.  Secretary of Agriculture, Tom Vilsack, has assured the Senate Agriculture Committee that decisions on increased line speeds would be based on scientific evaluation.

Petitioners opposing increased line speeds are less interested in the welfare of flocks than they are in their efforts to impose restraints and increase production costs for all animal protein.  Legal action opposing the decisions of the USDA that contribute to efficiency and hence, profitability is an anathema to those opposed to intensive livestock production and ultimately, consumption of meat.  Any restriction whether based on welfare or environmental issues that places a burden on livestock production is regarded by these groups as a victory.

 

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