Thanks for the valuable post. I think it is possible that insects could become competitive with fish meal, and both are high-protein. But I don’t think they could be competitive with low protein feed, because basically you are feeding them low protein feed (animal waste is the possible exception, but that could be fed to non-insects as well). What is the current typical cost per dry kilogram wholesale of insects for feed? When I checked, it was ~$9/kg wholesale, which is far higher than animal feed at ~$0.5/kg. Your source for the two units of feed for one unit of insects did not specify units, so I went to the original, and it looks like it is comparing dry feed and wet animal. This makes sense because if this were based on calories, it sounds too high even if you had ideal circumstances (no diseases, cannibalism, etc.). This is because insects typically cannot synthesize protein, so if they are 50% protein and the feed is 10% protein by calories, maximum conversion efficiency would be 20% even if they emitted no nitrogen in their waste.
An update to this—a study just came out that found black soldier fly larvae replacing up to 30% of fishmeal/fishoil in Siberian Sturgeons is now theoretically more profitable than pure FMFO. Also, there is a new Rabobank report that estimates current prices to be $4-6.5 / kg, dropping to $3/kg by 2030, so it seems like on the fishmeal side, there is a decent chance that 10-15% of diets of at least some fish will be replaced by BSFL or mealworms. (though note Rabobank is a large investor in the space so it’s hard to know to motivations behind the projections).
I think I agree with everything you’re saying here, and that makes sense on how conversion efficiency would work for insectmeal vs animal feed.
A few points:
It is definitely unclear if insectmeal will be cost-competitive with either fishmeal or grain feed. I think insectmeal as an alternative to fishmeal has a lot more potential for a variety of reasons—I saw a pitch deck to an investor where a company said it was targeting 1 to 1.5 Euro / kg dry weight for black soldier fly larvae fed on animal waste once they scaled up (though it was a pitch deck, so probably optimistic). If producers can actually hit that target, then it seems plausible some fishmeal could be replaced.
I think there is some reason to believe that fisheries, etc., would be actually less willing to pay for insectmeal than fishmeal, since it is new, etc., so the price could need to be even lower than that of fishmeal for insectmeal to take off.
There is a large amount of venture capital going into large scale insect farms right now. It’s possible that could end up subsidizing the cost of insectmeal in the short-term, and drive it down significantly, only for it later to increase if this source of funding goes away.
Thanks for the valuable post. I think it is possible that insects could become competitive with fish meal, and both are high-protein. But I don’t think they could be competitive with low protein feed, because basically you are feeding them low protein feed (animal waste is the possible exception, but that could be fed to non-insects as well). What is the current typical cost per dry kilogram wholesale of insects for feed? When I checked, it was ~$9/kg wholesale, which is far higher than animal feed at ~$0.5/kg. Your source for the two units of feed for one unit of insects did not specify units, so I went to the original, and it looks like it is comparing dry feed and wet animal. This makes sense because if this were based on calories, it sounds too high even if you had ideal circumstances (no diseases, cannibalism, etc.). This is because insects typically cannot synthesize protein, so if they are 50% protein and the feed is 10% protein by calories, maximum conversion efficiency would be 20% even if they emitted no nitrogen in their waste.
An update to this—a study just came out that found black soldier fly larvae replacing up to 30% of fishmeal/fishoil in Siberian Sturgeons is now theoretically more profitable than pure FMFO. Also, there is a new Rabobank report that estimates current prices to be $4-6.5 / kg, dropping to $3/kg by 2030, so it seems like on the fishmeal side, there is a decent chance that 10-15% of diets of at least some fish will be replaced by BSFL or mealworms. (though note Rabobank is a large investor in the space so it’s hard to know to motivations behind the projections).
Thanks for the comment,
I think I agree with everything you’re saying here, and that makes sense on how conversion efficiency would work for insectmeal vs animal feed.
A few points:
It is definitely unclear if insectmeal will be cost-competitive with either fishmeal or grain feed. I think insectmeal as an alternative to fishmeal has a lot more potential for a variety of reasons—I saw a pitch deck to an investor where a company said it was targeting 1 to 1.5 Euro / kg dry weight for black soldier fly larvae fed on animal waste once they scaled up (though it was a pitch deck, so probably optimistic). If producers can actually hit that target, then it seems plausible some fishmeal could be replaced.
I think there is some reason to believe that fisheries, etc., would be actually less willing to pay for insectmeal than fishmeal, since it is new, etc., so the price could need to be even lower than that of fishmeal for insectmeal to take off.
There is a large amount of venture capital going into large scale insect farms right now. It’s possible that could end up subsidizing the cost of insectmeal in the short-term, and drive it down significantly, only for it later to increase if this source of funding goes away.