As global agriculture faces increasing challenges—from resource scarcity to price volatility in essential commodities—the need for sustainable and resilient solutions has never been more pressing. Black Soldier Fly Larvae (BSFL) present an innovative, circular approach to these challenges, offering three key outputs from their rearing process: protein, oil, and fertilizer. This report delves into the potential of these outputs to revolutionize agriculture and mitigate the volatility seen in commodity markets such as fishmeal, coconut oil, and synthetic fertilizers.
The Three Key Outputs of BSFL
1. Protein
BSFL-derived protein is a sustainable and high-quality alternative to traditional protein sources, such as fishmeal, which has faced significant price volatility in recent years. As shown in the attached chart, fishmeal prices peaked at approximately £1,600 per metric ton in 2022, driven by limited fish stocks and increased global demand for aquafeed. BSFL protein, pegged against comparable protein sources, provides a stable, domestically produced alternative with a significantly lower environmental footprint.
Key Benefits of BSFL Protein:
Sustainability: Produced from organic waste, BSFL protein reduces reliance on overfished marine stocks and minimizes waste in agricultural supply chains.
Efficiency: BSFL can convert 1 ton of organic waste into 200 kilograms of protein-rich feed, addressing both food security and waste management challenges.
Strategic Advantage: Global demand for sustainable, bio-appropriate protein is soaring, especially in aquaculture, where traditional fishmeal production is unsustainable and limited. As the world’s third-largest salmon producer, the UK could greatly benefit from a domestically produced, consistent protein source, shielded from volatile international markets. This presents a strategic advantage for the UK salmon industry, which relies heavily on high-protein feed.
Market Opportunities: Other proteins such as pea, algae, and spirulina are potential markets where BSFL protein can gain market share. Additionally, soy protein (£350-£600 per ton) represents a long-term target for BSFL protein as a sustainable alternative.
2. Oil
BSFL oil, extracted during the rearing process, serves as a viable alternative to traditional oils such as coconut oil, which has experienced sharp price fluctuations over the last decade (peaking at nearly £1,800 per metric ton). BSFL oil offers comparable nutritional benefits but is more sustainable and can be produced locally, reducing dependency on imports.
Key Benefits of BSFL Oil:
Agricultural Use: Suitable for inclusion in animal and pet feed, where its fatty acid profile supports animal health and growth.
Sustainability Advantage: BSFL oil offers high lauric acid and medium-chain fatty acids, making it an ideal, sustainable alternative to coconut oil, particularly for pet food. Unlike coconut oil, insect oil’s domestic production mitigates risks from supply chain disruptions, natural disasters, and geopolitical instability, meeting the rising demand without dependency on international sources.
Market Opportunities: Other oils such as fish oil represent additional markets where BSFL oil can gain a competitive edge, providing a sustainable alternative.
3. Fertilizer
BSFL frass (larvae waste) is a nutrient-rich byproduct that serves as an organic fertilizer. It offers a sustainable alternative to synthetic fertilizers, whose prices have been highly volatile, as demonstrated by ammonium nitrate and urea prices in the attached charts. These fertilizers peaked at over £1,200 per metric ton in 2022, driven by supply chain disruptions and rising energy costs.
Key Benefits of BSFL Fertilizer:
Environmental Impact: Supports regenerative farming practices by replenishing soil health and reducing reliance on energy-intensive synthetic fertilizers.
Cost Stability: Locally produced BSFL fertilizer mitigates price volatility, offering farmers a more predictable input cost.
Strategic Opportunity: The Ukraine conflict in 2022 highlighted the vulnerability of fertilizer supply chains, with prices surging by 2-3x and threatening agricultural stability. Frass, a natural byproduct of insect farming, can serve as both a standalone fertilizer and a component in compound fertilizers, providing a sustainable, reliable alternative to support resilient agricultural production.
Circular Economy: By transforming organic waste into valuable fertilizer, BSFL supports closed-loop agricultural systems.
Addressing Commodity Price Volatility
Fishmeal
Fishmeal prices have risen by over 65% since 2015, with sharp spikes driven by global demand exceeding supply. BSFL protein provides a scalable solution, reducing reliance on fishmeal and helping stabilize feed costs in the aquaculture and livestock sectors.
Coconut Oil
The coconut oil market is susceptible to weather disruptions and supply chain inefficiencies, leading to frequent price swings. BSFL oil offers a local, sustainable alternative that circumvents these challenges, providing consistent supply and pricing.
Synthetic Fertilizers
Fertilizer prices are heavily influenced by energy markets and geopolitical events, as seen with the recent spike to over £1,200 per metric ton for ammonium nitrate and urea. BSFL fertilizer helps farmers reduce dependency on these volatile inputs, supporting more predictable and sustainable farming practices.
Environmental and Economic Impact of BSFL
1. Environmental Benefits
Waste Reduction: BSFL rearing utilizes organic waste, diverting it from landfills and reducing methane emissions.
Carbon Footprint: Producing BSFL protein and oil generates significantly fewer greenhouse gas emissions compared to fishmeal or coconut oil production.
Soil Health: Organic fertilizers derived from BSFL enhance soil structure and fertility without the negative impacts of synthetic alternatives.
2. Economic Opportunities
Domestic Production: Localized BSFL facilities can reduce reliance on imported commodities, bolstering national food security.
Market Growth: With increasing demand for sustainable agriculture, BSFL products offer a high-growth market for innovative producers and investors.
Job Creation: The BSFL industry creates opportunities across waste management, protein processing, and agricultural supply chains.