Internet and Mobile Banking will be offline for scheduled maintenance from 10pm Saturday 7 December to 6am Sunday 8 December 2024.

If you’d like to speak to us, we’re available Monday to Friday 6am to 8pm (Sydney time) on 1800 445 445.

Insect protein as animal feed creating global buzz

Insect protein is creating a global buzz, with demand for the fast-emerging ingredient in the animal feed and pet food sectors expected to reach half a million metric tonnes by 2030 – significantly up on today’s estimated market of 10,000 metric tonnes, according to agri banking specialist Rabobank.

While the potential for increased human consumption of insect protein has grabbed most headlines to date, Rabobank’s recently-released global report No Longer Crawling: Insect Protein to Come of Age in the 2020s outlines the nutritional, functional and environmental benefits of insect-based nutrition and the value-adding potential in this fast-developing animal feed market.

A high protein content (from 50 to 80 per cent dry matter basis) ensures the health benefits of insect protein as a feed ingredient to animals, the report says. While the benefits created by insects building circular food systems – because of their ability to upcycle low value agri-food material (such as food waste and residues) into high-value proteins and oils – are also being recognised.

Currently, pet food – primarily for cats and dogs – is the largest market for insect proteins, followed by the aqua-feed (fish) market, with potential in the poultry-feed market also promising.

The report says that when local, underutilised resources – such as food waste and residue – are used as a feed substrate (base) to farm insects, not only is the food-waste challenge addressed, but a local feed production system is created and the feed supply chain shortened.

The small environmental footprint of insect farming – which requires less water, land and production time compared with other species – also makes it an attractive option.

Report author, Netherlands-based Rabobank analyst Beyhan de Jong says while edible insects tick all the boxes from a nutrition, health and sustainability point of view for human consumption, current consumer acceptance is still low in developed countries, for both whole and processed insect-based foods.

“However, in our view, insects have a larger potential as feed ingredient than as a direct consumer food in the next decade,” she says.

Market challenges

Despite the many positives supporting the growth of insect protein as a pet food and animal feed ingredient though, some major challenges exist that are currently preventing the insect farming industry from “taking off”, according to the report. These include limited scale, high costs and prices and legislative barriers.

“The industry’s first challenge is the lack of scale”, the report says. While high costs and therefore high prices are limiting the demand for insect protein.

Decreasing costs and prices are key to increasing demand for insect protein, particularly in aquafeed markets, it says.

Inconsistent global legislation governing feedstocks and end markets for insect farming has also proved challenging.

Scale coming to “six-legged livestock sector”

However “scale is coming to the six-legged livestock sector”, the report says, backed by investments and partnerships, with the “insect sector” having received significant investment, particularly since 2018, enabling companies to build larger-scale production facilities.

Efficiency gains due to increasing technology, automation, improvements in genetics and legislative changes (expected in coming years as the market continues to strengthen) will also enable costs to decrease.

“By 2030, we estimate a global market potential of up to 500,000 metric tonnes for insect protein as a pet food and animal feed ingredient,” the report says.

Strongest growth is expected in the pet food market, in which insect protein is forecast to reach 150,000 metric tonnes globally.

Ms de Jong said this would be supported by the growing premiumisation and the humanisation trend in the pet food market, with owners increasingly choosing more natural and high protein meals and treats.

“The sustainability benefits of insect protein for environmentally-conscious consumers are also appealing, as are the hypoallergenic features for cats and dogs with sensitivities and allergies,” she said.

And while pet food formulated with insect protein currently sells at a premium, this specialty segment of the market is expected to grow, with discerning pet owners in developed countries willing to pay higher prices for these benefits.

Australia

In Australia, a number of start-up businesses are contributing to the growing local insect-protein market, both for human consumption and in the animal feed sector.

Rabobank Australia Head of Innovation, Knowledge & Networks Nathalie Gibson said in line with consumer demand for alternative proteins, entrepreneurs in the local market were being identified through Rabobank’s FoodBytes! startup innovation platform.

“For example, GoTerra, an Australian-based alumni of FoodBytes! by Rabobank, utilises bugs as animal feed, whilst simultaneously solving waste management issues, and we expect to see more local companies using insect protein to help mitigate waste and contribute to this progressive industry in the future.”

She said the Australian market had so far focused on creating circular food systems through insect protein.

“The main applications have utilised agricultural waste to feed insects that are then recycled back into feed for livestock – which has been the system adopted by GoTerra,” Ms Gibson said.

For further information see https://goterra.com.au/ and https://www.foodbytesworld.com/.

 

Rabobank Australia & New Zealand Group is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has 120 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 38 countries, servicing the needs of approximately 8.4 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 93 branches throughout Australia and New Zealand.

 

Denise Shaw
Head of Media Relations
Rabobank Australia & New Zealand
Phone: 02 8115 2744 or 0439 603 525
Email: denise.shaw@rabobank.com  

Skye Ward
Media Relations Manager
Rabobank Australia & New Zealand
Phone: 0418 216 103 
Email: skye.ward@rabobank.com