Profitability of insect production for T. molitor farms in The Netherlands

Abstract

Insects are increasingly considered as a relevant alternative protein source in the transition to a more circular economy and more sustainable food production. Understanding the profitability of insect farms is crucial for starting entrepreneurs, established rearers, and third parties. In this study we analysed the revenues and expenses of seven T. molitor farms in the Netherlands, representing approximately a quarter of the total sector. We calculated their gross margin and net present value. Revenues came from the sales of fresh larvae and insect frass, and from extension services. Expenses included investments, and non-allocated and variable expenses. Results cover technical and economic results, and a qualitative description of farm operations. The gross margins and net present values ranged from −180 to 2,030 and from −12,359 to 15,535 EUR/tonne fresh larvae production, respectively. The main determinants of T. molitor farms’ profitability included the sales price of larvae, and its labour and substrate expenses. Our estimates can be used by decision making of farmers, credit providers, and policy makers to support the growth of this still very small, but emerging sector.