A Protein Production Powerhouse – in Your Backyard?

Very few people realize that the most productive producers of protein in the animal world are insects.  Many of the six-legged friends in your backyard are more efficient in converting carbohydrates to protein than chicken, pigs, or cattle.  Consider the fact that ten pounds of feed can generate five pounds of chicken, approximately three pounds of pork, or about one pound of beef.  Ten pounds of feed given to crickets, however, will yield almost 9 pounds of cricket-meat.  Insects also produce less waste, generate fewer greenhouse gases, need significantly less freshwater, and leave a smaller environmental footprint than virtually all other source of protein.

So what? Widespread adoption of entomophagy (the practice of eating insects) has the potential to alter the demand profile for livestock, feed, grains, water and fertilizers going forward. This can happen in two ways. First, it’s possible that insects can be ground-up and included in current livestock feed, thereby reducing the need for other protein inputs.  Second, there is the possibility of direct human consumption that reduces the need for other animal proteins. Although this latter practice is met with cultural barriers in many parts of the world, more than 2 billion people currently consume insects as a direct source of food.

And for those in America who frown at the thought of consuming insects, you probably already consume some insects. Current FDA standards allow up to 30 insect fragments in 100 grams of peanut butter, up to 30 drosophila fly eggs in 100 grams of tomato sauce, up to 10 whole insects in 8 ounces of golden raisins, or up to 20 maggots in 100 grams of drained mushrooms. In fact, by some estimates, Americans are already consuming almost 500 grams of insects per year!

How might insect protein help the ~1 billion chronically undernourished people on this planet, or how could mass adoption of cricket consumption alter demand for grains?  Many, including me, believe that a booming middle class in the developing world is going to drive animal protein demand for some time to come, generating an exponential demand ripple through the grain markets, fertilizer industry, and the entire agriculture complex.  Our backyard protein powerhouses however, have the potential to derail this thesis by drastically reducing the need for livestock, feed, grains, water, and fertilizers; for that reason alone, edible insect developments merit close attention from investors, regulators, and policymakers alike.