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The cellular agriculture farmscape

What would farmscape look like once cell-based meat (cultured meat) enters mainstream? What would a typical day of ranchers be like? How would their incomes and business models change?

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The cellular agriculture farmscape

  1. 1. The Cellular Agriculture Farmscape
 Version 2020.01
  2. 2. Cell-based meat Muscle cells Bioreactor (Large tank) Cell culture and etc Maturing ⇒Shipping
  3. 3. Less cows Bioreactors in the backyard Many cows Cows are the product Cells or meat is the product No gene edits or modification. The price parity point of cell-based meat is reached. Traditional farmscape Cell-ag farmscape Assumptions: Otherwise “cell-ag farmscape” never happens The Cell-Ag Farmscape
  4. 4. AsoftodayA day of a cell-ag farmer Cell-ag farmer Less number of cows mean less cleaning, feeding, waste treatment More facility management and cell culture protocol dev., as in brewery cleaning, feeding, health checks Feed (hay, corn, whole crops) preparation Manure waste management cleaning, feeding, health checks 4:00 wakeup breakfast lunch dinner tobed break break 8:00 Noon 16:00 20:00
  5. 5. Difference of income and expenditure Traditional livestock farmer Expenditure: Feed, waste disposal, equipments Income: Calves(breeders), Cattles(ranchers) Cellular agriculture farmer Expenditure: Medium, facility, (feed, waste disposal) Income: Meat, Cell license Income with higher unit price (sells meat) Unit prices 30kg crops⇒1kg meat : 3kg medium⇒1kg meat The price of beverages with compositions similar to culture medium is $10/kg, $3/kg before refinement Facilities (similar to brewery) are the cost driver Probably costs more than barns - Expenditure for culture medium than feed - 3X more income for the same mass of output Cattle: $15/kg Carcass: $45/kg Meat: $70/kg (more info later) Source: Ministry of Agriculture, forestry and fishery, Japan Dairy Breeder Rancher Incomes of animal agriculture farmers in Japan, 2005 to 2007 Pork100$ 100$ 100$ 100$ Others Feed Profit margin Expenditures Rawincome
  6. 6. The price of raw materials for cell-based meat [1] Good Food Institute (2016)  [2]Calculated based on [1] The need for GF’s is expected to diminish as technologies improve ←Raw materials in powder Mixture of glucose, amino acids, vitamins & minerals Priced ~$1/kg, 1kg dissolved to 75L water for medium Medium Meat $15/L[1] $36.6/lb[1] $4.7/L[1] $11.5/lb[1] $3.7/L[1] $9.0/lb[1] $0.77/L[2] $2.2/lb[2] Scenario 1: FGF2 & TGFβ at insulin price 2: A&B 3: All GF’s at $4/g 4: Basal medium at $0.23/L
  7. 7. Mainstream demand for cell-based meat requires large supply of inexpensive amino acids. Novel raw materials and production process (the incumbent is fermentation) must be developed. Rice 720Mt Wheat, Barley 830Mt Corn 880Mt Cassava, Tubers  630Mt Soy 260Mt Sugar beet Canes, 2.1Bt Oil Palms Starch※1 40Mt Sugar 170Mt Meats 300Mt (Beef 60Mt, Pork 110Mt, Poultry 80Mt※3 ) Bioethanol※2 100BL Amino acids※4 6Mt Oil 40Mt Food (Carbs) Cell-based meat Plant-based protein sources Process residue Food (Fats) Food (Carbs) Figures are as of 2011, Geographic Annals 2014 (Ninomiya Books) ※1    ※2 Monthly Report, MAFF Japan March 2015,   ※3 USDA「World Markets and Trade」   ※4 Ajinomoto Co. Ltd. 
 Food (Protein) Food (Protein) Source: Mr. Akito Chinen 2nd Cell-Ag Conf. in Japan Sources of amino acids for cell-based meat
  8. 8. The price of facilities for cell-based meat It is customary to to consider the cost of the plant as varying by about the 0.6th power (New Scientist vol.17, No.326 p355) CA = The construction cost of Plant A CB = The construction cost of comparable Plant B at different capacity SA = The capacity of Plant A SB = The capacity of Plant B CB=CA×(SB/SA)^0.6 The upfront investment is relatively large, hinting community-scale facilities. Large players benefit from economy of scale - small players would compete by differentiated branding Estimated construction costs (Est. by IntegriCulture Inc. / 2017) 0.6th power rule & 7-year depreciation assumed Scale Cost Cost per kg meat 100kg/mon. $0.3M $33 1t/mon. $1.2M $13 10t/mon. $4.8M $5 100t/mon. $19M $2 1000t/mon. $75M $0.8 200L 200t
  9. 9. Breeding $7000 Husbandry +$4000 Sperm Slaughter +$4000 Sales & distribution Brand management (Husbandry) Breeding Cell culture Sales & distribution ● Successful branding of individual cell source cows can create value. ● Some farmers may be more successful than others at such effort. ● The brand life cycle may be shorter in cell-based meat. ● Co-product industry i.e. organic manure would face a disruption. (Sperm) Brand management Distribution along the value chain Value chain similar to a line breeding or OPU cow Cow $10,000 To date Cell Ag Calf $7,000 Meat $15,000 Est. by 2018 market in Japan Thick color = high added value
  10. 10. Business models of meat in cell-ag era Fabless farmers Contract farmer Lend cows Meat brewery Sends cells Sells meat Fabless farmer Farmers Cell licensing Cell bank Sends cells Food companies Sells meat Shared recipe Recipe website Warehouse People cell culture protocols Domestic culture vat Down- load Farmers Stores cells Sends cells Cell-Ag Firms People Cell-ag firm “New farmer” People Sells meat Food companies Meat brewery Sells cells
  11. 11. “Pop star talent agency for farm animals” ・Any amount of cell-based meat can be produced from an individual ・Brands may become animal individual based than breed lines - a huge diversification in brands occur. ・Pet animal talent agencies (i.e. ) can expand to farm animals. ・Branding may be based on individuals, locality, farm, farmer etc. Talent agency Cell-based meat Brand develop ment Food companies A talent agency may own a cow to be raised by a farmer on contract. Farmer
  12. 12. Farmer B Food, health and data in one service Farmer A Health data Health data Unique cell culture recipes Agile development of functional meat by health data Unique cell culture recipes
  13. 13. Intellectual properties in cellular agriculture Cell source Cell culture knowhows Large scale production Physical material Breed ownership Sperm management? Define by gene sequence? Cell ownership Copyright for genome sequence? Monitoring of cell thefts & piracy? Global IP protection scheme? Meat recipe? May be defined by genomes and cell culture recipe - kept secret or made open? Transparency Disclose recipe and materials to win consumer trust? Production process IP’s Bioreactors, control software and hardwares - competition is expected among cellular agriculture companies. Would existing meat industry have access to technology? Brands Animal individual brands Unfit for animals with short life? Branding by farms Animal individual brands can be associated with the name of farmers. “Meat Brewery Meister” Meat brewery can be branded just like winery Branding by materials “Culture medium by Evian Water”? Corporate brands Identical to existing food and beverage companies? Factory brands “Proudly produced in XXX” “Made in XXX” brands Farmers that actively create new values with cell-ag tech win.
  14. 14. Turns out cell culture protocol is all that matters and bloodlines are meaningless? The Wild Cards (Low probability big impact events) Carbon tax imposed on meat, spiking the price? Source: FAO gleam/results/en/ Weather or political event causing food embargo? ←2013 Russian food embargo - countries affected & alternative import sources Animal welfare movement bans international trading of meat? ✔ ✖