The meat industry has been hit hard by COVID-19, which has made its flaws all the more clear to see. Could this lead us into a better future?
Although the identity of COVID-19’s patient zero is still unknown, the virus is widely suspected to have originated in a Wuhan wet market. And one thing is crystal clear: These informal slaughterhouses, along with their more formal counterparts in the factory farming industry, are the perfect place to spread disease.
Crowding animals into confined, unsanitary conditions to be slaughtered—mixing blood, guts and faeces—creates a petri dish for pathogens. These informal and formal “flu factories” can quickly spread a bat- or bird-borne disease among intermediary animals that humans consume.
Slaughterhouses and meat-packing plants are also among the worst COVID-19 hot spots for humans. Some of the largest outbreaks in North America occurred in meatpacking plants. According to the U.S. Centers for Disease Control and Prevention, the virus is spreading quickly at these facilities because physical distancing is difficult on animal disassembly lines. Meat and poultry workers had among the highest rates of injury and illness and were among the least likely to report. The CDC found that over 3 percent of workers at 115 meat and poultry processing facilities tested positive for the coronavirus, as workers continue to complain that safety concerns are being ignored.
There has been a clear response from investors—to protect their returns—and from regulators working to safeguard the public from this dangerous industry. Goldman Sachs announced recently that livestock commodities are “looking as precarious as oil.” And now that Washington is getting involved, with Senators Elizabeth Warren and Cory Booker introducing a bill to ban factory farming, COVID-19 may be the animal product industry’s death knell.
Take a look at the financial markets, for example. Investors are taking or keeping their money out of the factory farming industry, in part, because of mounting concerns about its role in disease transmission. Investors are recognizing that the spread of diseases constitutes a significant risk to their portfolios. COVID-19 is on the expanding list of diseases that troubles the factory farming industry and thus investors. Animal-borne diseases, such as SARS, avian flu, swine flu and the coronavirus are becoming more common, costly and unmanageable.
The financial viability of industrialized animal agriculture, consequently, is at stake, and for two main reasons: competition and costs.
Consumers are becoming less interested in foods whose production methods are known for propagating deadly viruses, and the factory farming industry’s competitors are gaining ground. Beyond Meat is beyond the reach of animal-borne diseases, and it is impossible for the Impossible Burger to cause a global pandemic.
Meanwhile, the growing concern about diseases is expected to result in increased costs and decreased profits for factory farm operators. With already razor-thin profit margins, the coming wave of stricter regulations and hesitant investors will hit the industry hard.
Investors worried about the risks, rising costs and competition facing industrialized animal agriculture should divest while they can. The relatively meagre returns that investors can expect from factory farming operations on a good year are not worth exposure to the increasing volatility and risk faced by the sector.
While the coronavirus is crippling the chicken, beef and pork industries, the production of chickens for meat and eggs is likely the riskiest subsection of the factory farming industry from a public health perspective. Take history as precedent: The Spanish flu, a subtype of H1N1, was an avian flu that infected nearly one-third of the human population, killing between 17 and 50 million people between 1918 and 1919. And now recent outbreaks of H5N1 influenza in India, coupled with people’s fear over the role of unsanitary meat in the COVID-19 outbreak, are wreaking havoc on the poultry industry especially.
Legal firms, meanwhile, such as the Animal Legal Defense Fund, are fighting to prohibit factory farms from operating in a way that puts the health of animals and humans at risk. This is important from an investment perspective because every new piece of legislation and litigation that the industry needs to cope with is a cost it is ill-prepared to handle.
The fossil fuel divestment movement inspired investors to avoid fossil fuels. Now, institutions are considering the same with factory farming, which in many ways is riskier than the fossil fuels industry. Organizations such as Pivot Food Investment are helping institutional investors remove factory farming from their portfolios. This work is currently focused on college endowments, but pension funds are next.
Going forward, it’s clear that the animal agriculture industry is imperilled and increasingly precarious as an investment, while its competition has never been in greater shape. Pandemics are just one part of the compelling financial case for investors to avoid factory farming and wet market industries. But the looming financial risks are becoming less and less appetizing, and fewer investors are willing to bet on such a vulnerable industry. The factory farming divestment movement is here—and not a moment too soon.
Original source: https://www.newsweek.com