Bugs Were Supposed to be the Future of Food. Now, the Industry is Collapsing.

The insect farming industry, once projected as a sustainable food future with $2 billion in investment, is now collapsing, with almost a quarter of the 20 largest startups, including Ÿnsect, having ceased operations. This downturn is exemplified by Tyson Foods and Protix indefinitely halting plans for a large insect farm in Nebraska, intended to process 70,000 tons of larvae annually. The industry faces significant financial challenges, including insect meal costing approximately 10 times more than soybean meal and 3.5 times more than fishmeal, and difficulties competing with traditional livestock feed for agricultural co-products. Consequently, the human food market for insects has not materialized, and the high cost of insect meal prevents its widespread adoption as livestock feed.