Moo’s Law: An Investor’s Guide to the New Agrarian Revolution

Richard Gill, CFA, reviews Jim Mellon’s latest book, which explains how world agriculture will be radically transformed by the advent of cultivated meat and plant based protein technology.

Animal flesh has been part of our diets since before we were even human. According to a 2013 article in science journal Nature, around 2.6 million years ago early hominins began to expand their omnivorous diets to include meat and marrow from small to very large animals. This provided them with a calorie dense resource packed with essential amino acids and micronutrients, helping them to increase their body size without losing mobility, agility, or sociality.

While these early apes obtained their meals in a somewhat violent manner, the domestication of animals around 10,000BCE allowed for their selective breeding and systematic meat production. Fast forward to the 21^st century and World Animal Protection estimates that there are over 70 billion animals farmed for food each year. Meanwhile, author Jonathan Safran Foer, in his 2011 book Eating Animals, suggests that Americans eat the equivalent of 21,000 entire animals in a lifetime.

Despite all the benefits that meat has brought to humanity over the millennia, it has also caused many problems. To start with, its production is incredibly inefficient and wasteful, being one of the main contributors to global climate emissions. According to the World Resources Institute, it takes nine kilojoules of energy to produce just one kilojoule of chicken meat. In contrast, producing the same amount of protein from plants like peas or soya takes 40 times less energy.

On an equally pressing matter, many of the world’s infectious diseases, including SARS, Ebola and Sars-Cov-2, are known to have come from animal to human transition (zoonosis), caused by questionable farming methods and misuse of animals. The United Nations Environment Programme suggests that 60% of known infectious diseases in humans and 75% of all emerging infectious diseases are zoonotic, with the increasing demand for animal protein and the intensification of farming being two major drivers of their occurrence.

So the meat industry is causing huge problems for humanity, and we haven’t even discussed the ethical issues surrounding animal cruelty. Unfortunately, there’s the potential for things to get much worse, with the United Nations expecting the global population to rise to 9.8 billion by 2050. Those extra 2 billion or so humans will all need to eat and add to a growing proportion of people who are adopting protein rich “Westernised” diets as they get wealthier. Again, the UN estimates that meat production will rise by 50% to 100% by 2050 if current trends continue.

Fortunately, there is a solution to these problems, covered in detail in Moo’s Law, the latest book from entrepreneur, investor and pescatarian Jim Mellon. The main theme of the book is how within the next few decades, world agriculture will be radically transformed by the advent of cultivated meat and plant based protein technology. This will create a new agrarian revolution and provide consumers with an alternative to animal based protein products. Like any good investment book, it also informs readers of how they can become part of, and profit from, this new and developing industry.

Pork for the chop

Part One, titled The Imperative of Agricultural Change, discusses the problems with animal farming and how humanity must solve them if it is to continue to prosper. Mellon kicks off by outlining seven main arguments for advancing the new agrarian revolution, covering the points made above along with issues including the damage farming causes to land, its high water usage and food contamination. He argues that by embracing new practices and shifting our consumption patterns, we will end up healthier, the world will be cleaner and future generations will thank us.

Part Two goes into detail on the technology of non-animal based protein products. These mainly fall into the categories of plant based and cell cultured foods. Plant based foods as a meat substitute have been around for many years. But only recently have they been appearing on restaurant menus and in the supermarket as realistic and tasty alternatives which mirror the texture and flavour of meats such as beef, sausages and chicken. Gone are the days of a tasteless soya-based protein block, now replaced by Beyond Meat and Impossible Foods’ juicy burgers, along with Greggs’ popular vegan sausage rolls.

Meanwhile, I covered cell cultured foods in my recent review of the book Billion Dollar Burger. This technology sees extracted animal cells cultured in a nutrient broth before being assembled for consumption. While costs are currently prohibitively high for creating a commercial product, they are coming down rapidly. This is what Mellon refers to as Moo’s Law (a play on Moore’s Law) – as the industry scales up production and lowers costs it will be able to compete with the traditional meat industry while also offering significant health and environmental benefits. 

Did you know you can also create protein from the air? Inspired by NASA research which looked at creating protein from carbon dioxide converting microbes, a Finnish company has produced single cell proteins that aggregate to form food with a 70% protein content.

Moving on, Chapter 3 covers the main players in the new agrarian revolution in sub-sectors as varied as dairy, cell based seafood, pet foods, insects and pond scum. Meanwhile Part 4 looks at the various food industry regulations around the world which companies in the sector will have to comply with to be successful.

The final and one of the chunkiest sections of the book is part five, with Mellon providing a range of ways investors can get involved in the industry, covering a number of companies around the world which are helping to shape the new agricultural revolution. Mellon reckons that, along with longevity and climate change, farming forms part of the Holy Trinity of investment opportunities for the next 50 years. 

Some of the most interesting companies in the sector include the likes of JUST, a US based business which is already selling a successful mung bean based egg substitute, and Mission Barns, which is looking to cultivate fats from animal cells. Wild Earth meanwhile is looking to cultivate mouse meat to be sold in cat food. While most of these companies are currently private, many are expected to go public in the coming years. In the meantime, investors might want to take a look at Jim Mellon’s AIM listed investment vehicle Agronomics (LON:ANIC), a business which is taking stakes in a range of cellular agriculture and cultivated meat companies.

No bull

Not only is Moo’s Law an excellent guide to a rapidly developing industry, it is somewhat of a ray of hope in bleak times. The world currently faces many challenges, but Jim Mellon reminds us that humanity, utilising science, is always looking to solve these problems in the hope of a better future. Mellon gets the balance exactly right by explaining the science at a high level while interspersing his ideas with anecdotes, statistics and stories to make for a pleasurable read, not to mention the wide range of investment ideas. The new agrarian revolution is happening now, so get a moo-ve on and put Moo’s Law under the tree this Christmas.