How a Water Crisis Could Cripple the Meat Industry

If water prices increase along with the forecasted global water crisis, the water-intensive meat industry could be doomed.

watercrisis

To many water experts the future looks pretty bleak.

Even today 1.2 billion people live in areas with water scarcity. This is according to the same United Nations report that suggests two-thirds of the world’s population will live under “water stress conditions” by 2025.

That’s only 11 years away.

Shortages and water price hikes will affect us all in some form, individuals and businesses alike. Few industries will be affected as much as the meat industry. In fact, I believe that a global water crisis could eventually cripple the meat industry.

This week I’ve discussed the idea of virtual water, a way of measuring the amount of water it takes to produce or grow the ingredients of our favorite products.

The meat industry has a particularly large environmental footprint. A close look at the oil and petrochemicals used in commercial farming and raising cattle probably warrants its own article.

Today I’m specifically interested in the meat industry’s water footprint and how a change in the availability or price of water could affect the meat industry.

First, consider the virtual water in each of the most popular meats.

It takes 468 gallons of water to produce a single pound of chicken according to the Water Footprint Network. This figure includes water used to grow feed, water used during processing and water that the chicken itself drank.

If it seems like that is a lot of water that’s because it is. But it gets worse.

It takes 576 gallons of water to produce a single pound of pork and an incredible 1,799 gallons of water to produce a single pound of beef.

Why so much?

These days most of what commercial cows, chicken and pigs are fed before slaughter is corn, which, by itself, requires 108 gallons of water per pound. So we use water and energy to grow corn. We then feed that corn to cows, chickens and pigs until they are ready for slaughter and processing.

When viewed from that perspective, the meat industry is incredibly inefficient. But with cheap corn and extremely cheap water, the numbers have worked out.

That could all change if the price of water changes.

As an example, consider a $0.05 rise in the price of a gallon of water. A single gallon of water would only cost an additional $0.05. But a single pound of beef – with 1,799 gallons of water involved in its production – could rise in price by $89.95.

To make matters worse, more than 50% of U.S. cattle come from Texas, Nebraska, Kansas, California and Oklahoma.

When you compare that list to the map below, it’s pretty obvious that the country’s beef cattle are coming from some of our driest states, a problem that is only getting worse.

water-risk

Source: National Resource Defense Council

Something’s got to give. But what? Indeed, vegetarians may have their day. Rising water prices could shift consumer demand away from meat or towards “alternative” meats.

As crazy as this sounds, a pound of goat meat only takes 127 gallons of water to produce, roughly 7% of what it takes to produce a pound of beef.

A lack of availability or a rise in the price of water could easily cripple the meat industry, one that has boomed because of its access to nearly free and nearly limitless water.

That reality is going to change in the coming years and the meat industry will be forced to change along with it.

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Published by Wyatt Investment Research at