Do you increasingly find yourself checking the labels on your meat and going to extra lengths to source antibiotic-free and ‘paddock to plate’ protein for dinner? You’re not alone, with recent studies suggesting more and more consumers are opting to avoid factory farmed meat and products due to the proliferation of antibiotic-resistant diseases.

According to the World Health Organisation the number of people being exposed to and dying from what were once antibiotics-treatable diseases, such as pneumonia is escalating. In 2016 alone 700,000 people are estimated to have been killed by antibiotic-resistant infections globally, with a recent study suggesting that number may balloon to 10 million per year by 2050. With numbers like these, it’s not surprising the World Economic Forum has named the issue as one of the biggest threats to health and human development globally. 

So what is factory farming and why is it a concern? Due to increasing global urbanisation, loss of farmland and increasing consumer demand for meat, some large scale agricultural providers raise livestock in factory farms. Due to animals being kept in close confinement the farms are natural breeding grounds for disease. To counteract high animal disease mortality rates, factory farmers often turn to antibiotics, using them to prevent disease or to stimulate faster growth rates which can result in better prices and higher profits.

Outside of the obvious health issues human resistance to antibiotics represents a potential economic risk. Factory farmers and the broader sector could face falling earnings due to loss of consumer confidence and reputational issues, while regulatory intervention may result in banning or limiting antibiotic use. While globally regulators are presenting a disunited front, if there is a broad clamp down on future antibiotic use financial risks could include higher operational costs, higher capital expenditure, lower feed to conversion ratios and potential reputational risks. And factory farmers aren’t alone, as others’ positioned along the meat supply chain such as restauranteurs, suppliers and retailers may also feel the financial squeeze.  

However, many Australian livestock producers may in fact be beneficiaries from raising awareness of the issues. Australia has fewer factory farms comprising the broader sector versus the United States, Brazil and China and the factory farms that do operate in Australia use relatively smaller quantities of antibiotics. In terms of beef, Australia is the third largest exporter globally and the vast majority of cattle are grass-fed and largely raised antibiotic-free. So, if demand for “clean and green” meat continues, Australian non-factory farmers and exporters could see greater demand for their produce, and at premium prices. 

Meanwhile some consumer palates are already shifting. The health and wellbeing trend, as well as concerns for animal welfare, are translating into rising demand for plant-based proteins. Recent studies predict that meat substitutes such as tofu and tempeh will grow by 8.4% annually over the next five years, with alternative proteins possibly constituting a third of the total protein market by 2050. Stateside, nearly half of all Americans reportedly consume non-dairy milk due to health concerns, while in the UK the number of vegans has grown by 360% over the last decade.

Questions remain; where to next for intensive farming models and global regulators, and what will be on our dinner plates 30 years’ from now?

For a deeper dive on this trend and related financial risks, read our latest whitepaper, ‘Is Factory Farming Making Us Sick?’  

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