Economic supply chain modelling of industrial insect production in the Netherlands

Abstract

Abstract Defatted larvae meal (dLM), specifically from black soldier flies, could help overcome the animal protein gap. As insect production is an emerging sector, current economic research is scarce and very diverse. Thus, the aim of this research was to develop a simulation model that enables the analysis of full industrial scale costs of producing dLM and to provide insight in the distribution of these costs in the insect supply chain. The deterministic supply chain model is built on three modules, technical, transition and economic module, which all follow a previously defined supply chain structure and allow to extract quantity and price information for intermediate or final products. The model was parameterized and checked for plausibility in multiple consultation rounds with the INSECTFEED consortium and business partners. Additionally, model behaviour was checked with scenario, sensitivity, and break-even price analyses. In the default situation 5.57 tDM raw substrate and 26.7 million neonates are required to produce 1 tDM dLM for a price of €5,116/tDM. Most costs are added in the raw substrate delivery (€1,952/tDM) and production and collection (€821/tDM) step. Important cost factors are the raw substrate (€1,939/tDM) and building and inventory (€1,459/tDM). Parameters with high relative response rate towards the price of dLM are the feed conversion rate, dry matter percentage of larvae, raw substrate price, larvae density, labour wage and growth rate. To reach break-even prices for substituting fish meal with alive grown larvae (AGL) (€1,318/tDM AGL), improving production parameters is not sufficient. Just changing prices of raw substrate to −€78/tDM or frass to €1,175/tDM would enable a profitable operation. However, these are not deemed as realistic in mass production. Although there is some insecurity in data, the model results are the most realistic representation of industrial scale production amounts and costs.