Western Ag Reporter

Economic Feasibility of Producing Cell-Cultured Meat at a Large-scale

From NDSU’s Agriculture By the Numbers Newsletter

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Over the past several years, cell-cultured meat has received a good deal of favorable press and is being promoted as a replacement for the entire livestock industry. As a result, a number of livestock producers and other stakeholders in the livestock industry have voiced concerns about the development and promotion of cell-cultured meat technology and the potential impact it would have on the industry. In response to these concerns, my colleagues and I conducted an economics study to determine what it will cost to produce cell-cultured meat in a large-scale production facility that produces 1.2 million pounds of product annually.

Cell-cultured meat, also referred to as in-vitro meat, cell-based meat, test tube meat, and lab-grown meat, refers to the formation of muscular-skeletal tissue that resembles traditional meat in taste, texture, and nutrition. Cell-cultured meat is being promoted as a new protein alternative for those concerned about the impacts of animal agriculture. In addition, cell-cultured meat technology has the potential to create meat proteins that have the tastes that consumers prefer, which might give it an edge in the marketplace compared to alternative meat substitute products, such as plant-based meat.

Cell-cultured meat is not a substitute for plant-based meat. Instead, it is an edible biomass grown from animal stem cells in a factory. Fresh lean trimmings, in both beef (90 percent) and pork (72 percent), would be a comparable product to cell-cultured meat. Many of the funders behind this industry – including large traditional agribusinesses such as Tyson Foods, ADM, Muller Group, and Rich’s Product’s Corporation – hope to reduce the environmental and land impacts of our current agricultural system.

Although the initial goal is to use stem cells that must be replenished directly from animals, many firms want to develop cell lines that allow them to be independent of animals in the future. The technologies used to produce cell-cultured meat are continuously being improved, so there is still much uncertainty on what the final product will cost. Previous research has focused primarily on the cost of the cell-culture medium – a liquid or gel designed to support the growth of cells – rather than other potentially important costs.

We estimated startup, production, employment, and transportation costs in addition to available cell-culture medium costs and expected output per batch to create a full-detailed enterprise budget. Cost estimates are calculated using (1) cell-cultured bioprocess information from published literature; (2) bioreactor and cold storage infrastructure information from engineers; and (3) prices and quantities of other relevant costs obtained from public and private sources. Individual operating and fixed investment costs are reported in Table 1.

The results suggest that the cell-cultured meat industry has a long way to go before it can operate and make an acceptable return on investment. Assuming that technology will be developed to reduce the cost of the medium, including growth hormone substitutes and buying ingredients in bulk, 1 pound of cell-cultured meat produced at a hypothetical large-scale facility located in the warehouse district near San Francisco, California, was estimated to cost (wholesale) $29/lb.

For reference, in 2021 the wholesale price of lean beef was $2.80/lb and lean pork was $1.70/lb. The three major costs of production are the cell-culture medium, bioreactors, and labor. These costs make up over 80 percent of the overall cost of production, or more than $23/lb. In practical terms, for this large-scale production facility, a pound of cell-cultured hamburger meat would cost well over $50/lb at the supermarket and restaurants.

Results of an extensive sensitivity analysis suggest that, before the cell-cultured meat industry will be profitable, it will require multiple technological advances in order to significantly reduce the costs associated with (1) the growth medium, (2) the bioreactors, and (3) labor. Increased mechanization could reduce labor costs. Using used equipment from the medical and pharmaceutical industries could reduce costs in startups, but supply is limited. A new lower-cost cell culture medium could greatly reduce costs. It is not likely that many consumers are willing to pay $50 for a pound of lean meat at the supermarket. However, history has shown that as technologies improve, the cost of production can decrease to a point that encourages large-scale production.

Our projection is that producing at large-scale, assuming projected innovations in the growth media materialize, the cost of producing cell-cultured meat can be reduced from a university lab-based cost of $1 million per pound in 2013 to just $29/lb via large-scale production. If such a cost is reached, cell-cultured meat could conceivably compete, especially in developed economies such as the United States and Western Europe as a niche product that can command a premium price. Our results show that this industry will need to focus on reducing capital and labor costs as well as the media cost if it wants to compete on price with traditionally produced meats such as beef, pork, and chicken.

The details of our study can be found online: How much will large-scale production of cell-cultured meat cost? – ScienceDirect (www.sciencedirect.com/science/article/pii/S2666154322000916#!).

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