A new report forecasts the world is on the cusp of the fastest disruption to agricultural production for 10,000 years in a shift that could threaten New Zealand's key primary exports.
Independent London/San Francisco-based think tank RethinkX says the US cattle farming industry, including dairying, will be all but bankrupted by protein technology within 10 years, with severe knock-on effects for all associated businesses.
It says the cost of proteins will be five times cheaper by 2030 than existing animal proteins, and 10 times cheaper by 2035, to ultimately become close to the price of sugar.
Within 10 years the modern food products will be higher quality and cost less than half as much to produce as the animal-derived products they replace, says the report by RethinkX, which analyses and forecasts the speed and scale of technology-driven disruption and its implications for society.
It says the massive approaching change is the result of rapid advances in precision biology.
This is allowing big strides in precision fermentation, a process that enables programming of micro-organisms to produce almost any complex organic molecule.
These advances are being combined with an entirely new model of production, in which individual molecules engineering by scientists are uploaded to databases - molecular cookbooks that food engineers anywhere in the world can use to design products in the same way software developers design apps, the report says.
This model ensures products can improve rapidly, with each version superior and cheaper than the last. It also ensures a production system that is completely decentralised and much more stable and resilient than industrial animal agriculture, with fermentation farms located in, or close to, towns and cities.
The report says the industrial livestock production model has all but reached its limits in terms of scale, reach and efficiency.
"As the most inefficient and economically vulnerable part of this system, cow products will be the first to feel the full force of modern food's disruptive power.
"Modern alternatives will be up to 100 times more land efficient, 10-25 times more feedstock efficient, 20 times more time efficient and 10 times more water efficient. They will also produce an order of magnitude less waste."
The ground meat market is already being disrupted by "modern foods" and once cost-parity with animal meat is reached - in 2021-2023 RethinkX believes - adoption of new foods will accelerate expontentially.
The disruption does not rely solely on the direct, one-for-one substitution of end products, the report says.
"The whole of the cow milk industry for example will start to collapse once modern food technologies have replaced the proteins in a bottle of milk - just 3.3 per cent of its content. The industry, which is already balancing on a knife edge, will thus be all but bankrupt by 2030."
The report makes sobering reading for participants in New Zealand agriculture, which contributes 5 per cent or around $10.6 billion to GDP and is a major contributor to the country's $79 billion annual export revenue.
Most of agriculture's production is exported. Primary industry annual export revenue as at June this year was $46.4b.
Of this dairy exports contributed $18.1b. In the 2017-18 year red meat exports were worth $6.7b.
The Ministry for Primary Industries (MPI) called the RethinkX report "an outlier" in its predictions around international protein consumption.
MPI's research indicated global consumption of animal protein was growing, even when adjusted for population growth.
A key driver was rising incomes across a growing middle class.
The latest OECD-FAO Agricultural Outlook report backed this up, forecasting global meat production to increase 11.3 per cent and dairy production to increase 17.1 per cent from this year to 2028, MPI said.
Global population was estimated to grow 10.2 per cent over that time.
"There is room in the future global food system for both New Zealand's high quality animal products as well as a broad range of plant-based foods. MPI's view is that there will always be a market for high value, naturally produced products, even if this becomes a niche market for discerning customers."
MPI said there was also scope for New Zealand to benefit from alternative food production with Kiwi innovators already active in this area.
Late last year a Treasury report into the impact of artificial protein found it was unlikely the potential impact to New Zealand's meat industry would cause significant disruption within the the next five years.
The OECD forecasts meat consumption per capita to remain roughly constant in developed economies such as the European union and in the United States, over the next ten years and meat consumption per capita in developing economies is forecast to increase as household incomes rise.
Beef consumption per capita in China was is forecast to increase by 10 per cent between to 2022.
''However, towards the end of the forecast period and for some time after it is certainly a risk that the meat industry in New Zealand will face and increasing pressure from artificial meat products,'' the report said.
But the New Zealand meat industry was in a better position than other countries to respond to a shift. For the most part, New Zealand meat is considered a 'premium' product.
''If meat alternatives become cheaper than standard meat, it is suggested that the lowest value products will be crowded out first. This suggestion is based on the idea that standard meat will become a luxury good and will therefore need a high level of quality.''
The RethinkX report says the "disruption of the cow" by modern foods will trigger a transformation across the whole supply chain, with different industries seeing disproportionate losses and gains.
The opportunities will be "enormous", it says.
The implications for society are wide and include environmental, health, social, geopolitical, economic, animal welfare, reduced deforestation and biodiversity loss.
The cost of modern foods and other manufactured protein products will be at least 50 per cent, and as much as 80 per cent, lower than the animal-derived products they replace, the report predicts.
Greenhouse gas emissions from cattle would drop by 60 per cent by 2030, and by nearly 80 per cent by 2035.
When modern food production that replaces animal agriculture is factored in, net emissions from the sector will decline by 45 per cent by 2030, and by 65 per cent by 2035.
Water consumption in cattle production and associated feed cropland irrigation will fall by 50 per cent by 2030, on course to 75 per cent by 2035.
Net water consumption by modern food production would decline by 35 per cent by 2030, on course to be 60 per cent by 2035.
Nutrition would improve for everyone. In the developing world, access to cheap protein will have a hugely positive impact on hunger, nutrition and general health. Rates of foodborne and human-animal crossover illnesses will drop significantly, along with antibiotic resistance in disease-causing bacteria.
Trade relations will shift because decentralised food production will be far less constrianed by geographic and climatic conditions than traditional livestock and agriculture, the report says.