Insect Farming Is Best Suited for the Production of Animal Feed

The companies of the growing industry of high-scale insect farming are approaching their businesses from many different angles, but where the use of insects can be justified the best is when the insects are used to create animal based feed for other animals. The “animal based feed” means feed that include proteins and other nutrients that are coming from an animal instead of plants. Certain farmed animals like salmon and pets like some reptiles require animal based feeds for their health and efficient farming.

When evaluating where the insect based products should be used, the animal based feed is the only group of products where the insects stand out in a positive way against the substitute products. Other products that can be made out of insect are human food, chitin and fertilizer. Chitin and fertilizer are side products of the main purpose of the insect farming that is aiming to produce food either for human or animal consumption.

Let’s go through some of the approaches the insect farming industry has made so far, and how they match up with the substitute products.

Human food

When talking about human food, insects are associated to it as a protein source and replacement for other animal products and beans like soy. There is no doubt that insect farming have significant benefits over these two product groups, but when looking at other new protein products, insects are not anymore the number one choice. Single-cell proteins (Algae, fungus and bacteria), cultured meat and bio engineering (e.g plant based products mimicking animal based products) can all offer the same value proposition as insects, but they do not carry similar risk exposure for the producers making them. For this reason the substitute products are more likely to be produced with more efficiency.

The main difference and in the same time the source of higher risks compared to these other modern food sources is that the insects are the only animal based, or putting it more precisely, the only one coming from live animals.  When farming animals in high-scale the pathogens are a risk for the health of the animals themselves. This risk is underlined in the coming years as the pathogens’ are building bit by bit more resistance against antibiotics. Secondly, when dealing with live animals the end products are also exposed to pathogens like salmonella more than plant based products.

The factor that insect industry has over the substitutes is the possibility of nutrient recycling. Nutrient recycling in this case means that nutrients can be saved from bio waste or even manure by feeding them to insects. Using bio waste brings multiple benefits for an insect farm, but it also highlights the risks. When the raw material of the production is bio waste the cost is very low. This lower cost can make up some of costs of higher risks when comparing the substitutes and underline positive environmental impact of the insect farming.

There are a few negative sides of using bio waste. Depending on the source of the waste the quality and quantity of it changes and this makes the forecasting of the production more difficult also in both quality and quantity. Additionally, when the waste is so unstable it bring additional pathogen risks. There are ways to mitigate these issues: If using waste from bio waste created by facilities such as breweries the quality and quantity are consistent, but the price is not as good as the same waste can be used for example in bio gas production. Other way to make the raw material consistent is for example fermentation and mixing of different high standard deviation batches to make them consistent by quality, but these solutions increase the production and inventory carrying costs. Lastly, the issue of regulations might be a problem from companies using bio waste. At the moment it is unknown how for example heavy metals and medication residues build-up in the food chain of insects. This is one of the main reasons why EU has not yet opened the markets for insect based food and feed. It has been speculated that the first steps of the opening of the markets will include only certain insect species fed only with certain feeds, and those fees would not include bio waste.

All these downsides may compromise one of the main arguments of insect farming, the possibility of nutrient recycling. If you are interested to read more about this aspect, see my blog post “Using bio waste as feed” here: https://ilkkataponen.com/2015/08/20/using-bio-waste-as-feed-for-farmed-insects/

Animal feed

When looking at the substitutes in the animal feed sector “insect feed” is competing with wild fish, side streams of traditional farming and plant based proteins like soy. The prices of these products are low and the quantity demand is extremely high. It will be difficult from the insect businesses to answer these numbers especially when the industry is still building up, but insect feed have other significant benefits over the competition.  Both wild fish and insects are part of the natural diet of predatory fishes like salmon, but unlike the wild fish, insects can be produced locally and insect products are a lot more sustainable. Soy is one of the key elements in the modern fish farming even though it is not a part of for example salmon’s diet. This area is not my expertise, but it is my understanding that soy is being used as fish feed only because it is the cheapest possible protein source, and if the price of an animal based protein source would be close soy, soy would be ditched right away. Additionally, the rise of the wild fish based fish feed prices is expected to continue. This will be closing the price cap year after year in benefit of the insect feed.

Conclusion

Keeping in mind the explained issues and when thinking about the industrial scale food production it can be concluded that insect are most suitable for animal feed for situations when the animal based nutrients are a must. When thinking of human food the new and modern substitute products offer more efficient and, depending on the type of the feed used for insects, more environmentally friendly solutions. When looking at the topic from non-industrial point of view insects are a great solution for human food. For developing countries and areas where arable land is scarce insects can offer great benefits over mammal farming that need huge areas of land and water. Topic that was not discussed in the blog was taste; will it work in benefit of insect or other protein sources? This question I leave for other bloggers and experts.

Collective Consciousness in High Scale Insect Farming

In the Finnish national broadcast company’s radio channel Yle Puhe there was a great program by a man called Jari Sarasvuo.  His latest talk show encouraged me to write this post. What he was talking about among many other things was Collective and Social Consciousness. These are not theories of his own, but his way of telling really struck me and made me notice many aspects of these theories exactly in this industry of high scale insect farming. For all the Finnish speakers here is the link for the show: http://areena.yle.fi/1-3092290

Earlier in this blog I have discussed the issues related to the conservative approach to co-operation by many in the entomology business. Companies are not willing to discuss even the very general approaches for example to the business strategy. I claim that this is a wrong approach that is wrongly justified. It is a way to kill your own business but its also hurting all the other operators in the field. Now in the current situation the restricted communication is forcing all the companies to do the same failures in e.g their trials related to scale up and the start of production. The situation in this specific industry is underlined by the lack of public studies.

I have understood that the companies do not want to share their knowledge because they feel they have used resources to collect it and they justify their approach not to co-operate by saying “because we have suffered for this, you should suffer too”. Behind this thinking is a wrong assumption that other insect farms or for example other insect product processors would be competitors for each other, but it is not true. While there is still so few operators in the field and the market demand of insect products is not even closely satisfied, the competitors are found from the replacing products that are the traditional protein sources.

It is a fact that the lack of operators in the industry is hurting all the companies, but still we do not want to help each other, we rather build barriers around ourselves. I think is fair to say a company’s competitive advantage is not in knowledge that can be achieved by six months of learn and fail experiences, but the same missing knowledge from the starting companies creates a barrier of entry and increases the risks of failure. Every failed company in the field is a loss from the whole industry as it narrows the horizontal integration. More on this in my seminar presentation that you can find here: https://www.youtube.com/watch?v=In_ONp_PoY0

The Collective Consciousness is a way of thinking where individuals are thinking “us and them” over the Social Consciousness way of “us”. The Collective is a part of conservative management were people were reflecting their lives and getting their motivations mostly through their own eyes. The Social way sees that the individual benefits the most when we think of the benefit of everyone over the battle between the two groups “us” and “them”.

Now you have struggled through the set-up and we get to the cricket-steak:

For many insect industry entrepreneurs the desire to find the company is coming from Social Consciousness- motivation. We want to build something sustainable and ethical for the good of the planet, right? For the good of not only us, but of you as well. By doing this we believe that us and you will all enjoy a healthier future.  So how is it so that the similar thinking is not transferring to the actual work the companies are doing? Is it the wrongly identified competitors, lack of business understanding or can it be that motivations of the entrepreneurs are after all more Collective or the Social?

The future belongs to Social Consciousness and the co-operation will always be more beneficial than isolation. There is always more to win from co-operation than there is to lose. It is choice of all companies to make the decision whether they will anchor themselves to core of development by co-operating or are they hurting themselves by building walls around themselves.

Insect Farmers Are Ignoring Health Hazards

Insect are closely related to crustaceans. Multiple entomology companies are acknowledging this by warning their customers about the possibility of allergic reaction when consuming insect products especially on people who are allergic to crustaceans e.g shrimps. The companies apply the warnings to their customers, but it seems they do not act on the same basis when it comes to the protection of their employees.

There no public releases or instructions on how the employees should be protected in the entomology industry. While such white papers are still missing, guidelines can be looked for from the seafood industry. The Canadian government gives instructions for fish handling:

“Employees shall wear protective clothing such as coveralls, aprons, sleeves, smocks, hand coverings, hair nets or beard nets that are in a clean and sound condition and suitable for the tasks employees are charged to perform.”

The complete instruction can be found here: http://www.inspection.gc.ca/food/fish-and-seafood/quality-management-program/compliance-and-assessment-guide/eng/1373905757114/1373905892989?chap=5#s29c5

Behind the following link you find an article about a Shrimp factory. The article includes pictures of the factory and its employees in full protective gear. http://pulitzercenter.org/reporting/thailand-thai-shrimp-industry-labor-abuse-child-migrant-burma-burmese-workers

It is surprising how lightly the entomology companies seem to the health hazards and the low level of protection offered to insect farm employees against the allergens. When you are unsure about the possible risks, you should be rather safe than sorry, right? Ignoring the risks can lead break out of allergies making the employees in the worst case unable to work at the facility. Additionally, the protective gear is not only for the safety of the employees, but also for the protection of the insects from pathogen sources and unwanted insect species.

At first I was thinking of showing here examples of companies, but I think it would be unfair just to name a few companies as “bad examples”. These examples are easy to find, just go ahead and search for pictures and videos posted by the companies themselves and you can see inside the facilities and how the employees and visitors are equipped.

What the Latest Avian Flu Epidemic Teaches to Insect Farmers?

In the first half of 2015 the egg production industry in USA has been hit hard with avian flu epidemic causing the staggering loss of 11 percent of the hen population all across the country. In actual number of egg-laying hens reduced just between April and June by 33 million individuals. Read these articles for more details:

(http://america.aljazeera.com/opinions/2015/7/the-end-of-chicken.html?utm_content=buffer14455&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer)

http://thefern.org/blog_posts/11-percent-of-egg-laying-hens-dead-in-two-months-from-bird-flu/

kirva
So what can the insect farming industry conclude from this example of significant pathogen issues this established and large industry is struggling with? When such a large industry with long history of scientific research and large funding (compared to insect farming) behind it cannot control its pathogen risks, it is clear that insect farming is exposed to even higher probability of risk pathogen risk realization.

Starting from the first posts I have been writing about the seriousness of the pathogen breakout risk. It is also my main conclusion of my thesis that this risk is the most serious one for all insect farming companies. Here are a few selected sections from my thesis about the topic. If you read the thesis already, you can jump ahead until the cricket drawing! If you are reading this for the first time and you are interested to learn more, find the link to my complete thesis in the end of this post .

pirkko
“The lack of knowledge increases all risks in every department and function of an IFF- farm, not only in the supply chain. As mentioned in chapter two by the time of writing this study there are no functional large-scale facilities operating yet, only plans exists. Even though the companies will do their best to predict upcoming challenges, it is likely that there will be surprises that the companies are not able to predict. There is not much scientific research on the industry so a lot of the data and knowledge companies have is gathered through their own research and development projects and based on the experiences of the individuals. As the data is private and essential for the company`s success the knowledge is carefully protected and out of reach of the public. As mentioned already in the opening chapter other than IFF- insect farming has related history, however the knowledge from the field of for example farming of entomophagous insects cannot be directly used to help the risk control in IFF- farming .This is be-cause the insect species feed on different nutrition and the scale is significantly bigger.”

aurinko
“Pathogens and parasites are the biggest concern for all entomology farms; they can wipe out entire facilities endangering the production output for a very long time. What makes the risk even more serious and the mitigation more difficult is that there is a very limited amount of knowledge available on the subject on commercial level farming. The insect pathogens include viruses, bacteria, fungi, protists and nematodes (Eilenberg et al.). An example of a problematic pathogen is densovirus that can cause serious dam-age to cricket farms that can wipe out entire colonies (Szelei et al., 2011). For control-ling the risk of contaminations by pathogens and parasites high hygienic conditions are required, similar to other food production (Klunder et al., 2012).”
“Pathogens and parasites cannot be controlled completely as they are in some cases originated from the insects themselves (Eilenberg, 2015). At times the pathogens will outbreak and cause problems for the production. An example of a minor case could be a loss of a few percentages of insects, or maybe only a slowed down growth rate. In the worst case scenario the whole colony dies. Losing a colony can be a catastrophe for an insect farm because risk residence resilience level is low due to the lack of egg supply in the market (chapter 4.3). “

“Pathogen and parasite outbreak can be considered as a hazard risk because of the lack of knowledge and low control level caused by it. The lack of knowledge leads to a situation where the companies do not have complete understanding of the dangers. What are the pathogens and parasites, where they can come into the process and what are the circumstances that favor the unwanted visitors? When the risks or their cause are not known, they cannot be mitigated. Other hazard risks are for example natural disasters as discussed in chapter 3.2.2. These risks cannot be controlled completely, but a company can be prepared for them.”

So what can the insect farms do that they could be better prepared and handle their risk than the struggling traditional farming? What is positive for insect farming is that unlike the traditional animal farming, the insect- industry is not tied to old fashioned infrastructure that does not support the modern risk management thinking and the growing insect industry can be build according to the latest knowledge.

ilkka-heinäsirkka
For long time the traditional farming has ignored the unethical and hazardous (and money making) living environments of the animals as they have been able to counter the downsides by heavy use of medication on the animals. As it has now been seen again with the latest case of the avian flu, it just might be so that this is not the right way to go. Fortunately, the insect farming industry does not even have this option simply because such thing as insect medication does not exists. For this reason the best option for insect farmers is to first of all provide the insect the best possible environment to lower the risk exposure of pathogen breakout. Secondly, use Risk Pooling meaning that the insect colonies are divided in the multiple separate locations so that in case the risk does occur, it does not affect the whole colony right away.

Further reading:
About risk management click here: https://ilkkataponen.com/2015/05/20/thesis-supply-chain-risk-management-in-entomology-farms/
About ethical insect farming click here: https://ilkkataponen.com/2015/01/04/the-animal-welfare-in-insect-farming/

5 Questions an Investor Should Ask Before Investing into an Insect Farm

Investing into the growing industry of high-scale insect farming that has undoubtedly high potential is a case of high risk / high reward. The high reward comes from the growing and unexploited markets and the high risk from the limited knowledge and the undeveloped market environment. Here in this blog I list some of the most important questions that investor should ask and that the farmer must have clear answers that are supported with solid arguments.

aurinko

In my perspective the one of the most important qualities for a high-scale insect farm is its flexibility. Because of all the uncertainty surrounding the industry the most important question is how the farm can adopt to changing legislation, trends and new scientific knowledge. All these factors increase the risk exposure of the insect farming companies. This main question is cut in to more detailed questions here below. The questions and the reasoning behind them are explained with higher detail in my thesis that can be found here: https://ilkkataponen.com/2015/05/20/thesis-supply-chain-risk-management-in-entomology-farms/

ilkka-heinäsirkka

1. What species are you farming?
2. How many species are you farming?
3. What type of feed are you using?

The question number one is very fundamental question and sets direction for the farming company. As concluded in my thesis the biggest risk threatening the companies is a pathogen break out. The risks are especially associated with insect farming because the pathogens are still very poorly known. For this reason insect farms should choose their species to be one of the ones that are best known, or they should have extraordinary knowledge or resources related to the scientific research with the selected species. In my thesis I name the three most common species farmed today. The species are Tenebrio molitor, Hermetia illucens and Acheta domesticus. If a farm has selected species that are not one of this three the species should at least be present in the “Belgium ten”, a list of ten approved species by the Belgium authorities  ( You can find the list here: http://www.afsca.be/foodstuffs/insects/).

Changing the insect species is not easy after building the infrastructure around the certain needs and choosing only one species is a risk for multiple reasons. The farm should be prepared for changing the primary species in order to avoid the following risks:

-It is possible that the selected species might not be in list of insects that are first allowed for use for human food and animal feed.

-If the species will not be one of most common ones to be used in the future the company will be left out from the growing knowledge of the most common species and from the growing logistics downstream.

-There is no knowledge of how any insect species will perform in very high volumes. It is possible that even the most promising species will turn up to be unsuitable for high-scale farming.

Same goes with the selected feed. Even if the selected species would be approved by legislation and the species would perform well in high-scale environment, it might be that the selected type of feed makes the end product remain banned. This type of situation might be ahead for example for the companies using biological waste.

4. Do you consider biological research important?
Companies are going to two different ways when it comes to biology research about the farmed species. Few bigger companies have multiple scientists with their teams working on building a better understanding on pathogens and what are the best and most efficient ways of farming. In the other end there are companies with no biological knowledge. It is essential to know the reasons behind the company’s selection between these two approaches. Is it so that the research is just waste of money, or so that the research will bring better quality, risk management and higher efficiency?

5. How have you prepared against pathogen breakouts?
There are multiple risks in insect farming, but the most dangerous one is a pathogen breakout. As mentioned before the knowledge about the insect pathogens is really basic and they pose risks that can in the worst case kill off entire colonies. According to Doctor Jorgen Eilenberg of University of Copenhagen, leading insect pathogens expect in the world, companies cannot with current knowledge prevent pathogens breakouts completely. It is undeniable scientific fact that the sufficient risk control against pathogen can only be reached by risk pooling and segregation of different functions.

If the farm uses same batch of feed for all of its insects, they are all located in a same space or if they use same AC- machinery the investor should be alarmed and ask how the farm can justify the ignorance towards the risk?
pirkko

The Strange Case of Pestaurant  

Rentokil, A global company of pest control, is arranging for the second time a set of events called the ”pestaurant”. The Pestaurant is a pop-up street kitchen offering insect food around the world. According to their website on the 3rd of June there will pestaurants open in 13 different countries.  The events raises multiple questions that I will be now discussing here in this blog.

Why Rentokil is arranging Pestaurant events?

Why Rentokil, a pest control company ,is involved in food industry? Their business is about killing the pests with e.g poison, but now they are associating their name with food. This is according my knowledge against the very basic brand building and marketing rules to do such a thing. Will people to come to them asking for insect based food later? Will people think that insect have been collected from some industry building where they were first killed with poison?

In the Australian pestaurant-event page an explanation is given:

“The aim of Rentokil’s Pestaurant is to raise your awareness of common pest problems and demonstrate our commitment to professional pest control and innovation, helping us to stay one step ahead of the natural evolution of pests.

Our team of experts are available to offer valuable advice and top tips on how to avoid a pest infestation in your home or at work. Contact us today to arrange a FREE survey.

This event motivates you to be more adventurous with your food and aims to promote the health benefits of an insect rich diet already enjoyed by billions across the globe. Encouraged and promoted by the UN as a viable food source, eating insects (entomophagy) can enrich your diet with higher levels of protein, zinc and calcium – not to mention their low-in-fat status.”

With such an event Rentokil does indeed increase their brand knowledge among the people, but how does offering insect food increase their credibility as effective pest control company?

Why is the event called Pestaurant?

A quick look to Wikipedia gives you a description of the word “Pest” as following: “A pest is a plant or animal detrimental to humans or human concerns (as agriculture or livestock production)”. Calling the event Pestaurant confuses the consumer even more. How come Rentokil is offering us pests, things that are detrimental to us?

Are the insects they are offering even pests?

The different events offer different foods. The lists include mealworms, crickets, locusts, ants, buffalo worms, water beetles and scorpions. From the list few are clear pests, but water beetles at least do not fit the description.

The biggest question: Ignoring the legislation.

From the 13 countries involved Estonia, Lithuania, Ireland, UK and Germany are EU member states. From these countries only UK has taken an official stand against the EU regulations banning insect bases products from human consumption. It is known that the food and health authorities have allowed some insect food events in the countries, but certainly Rentokil is in the gray area here.

What surprised me the most is a piece of text in the German event page “The insects were not self-bagged, but especially farmed for the human consumption according to European food standard.”

The claim that the insect were farmed according to “European food standard” is very misleading as there is no such thing. The food standard they are referring to is possibly the guidelines given by Belgium food safety authorities, but certainly there no such thing as “European food standard” for insect products. From the countries outside of EU I do not know the legislation.

Link to Pestaurant’s homepage. From this link you find further links to the events of different countries:

http://www.pestaurant.com/

Thesis: Supply Chain Risk Management in Entomology Farms

My thesis “Supply Chain Risk Management in Entomology Farms Case: High scale production of human food and animal feed” was published in May 2015. The link for the downloadable PDF- file is in the end of the text. The thesis is world’s first scientific study connecting business management and high-scale insect farming for human food and animal feed.  
pirkkoClick here for the downloadable file: Ilkka Taponen Thesis

My presentation about the thesis can be found here

Audiobook version of the thesis is available for purchase in all major stores e.g here