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Even when your personal budget would allow spending more for food, a price that is higher than that of meat is a serious red flag, indicating that it is likely that such a substitute for meat has greater environmental consequences than producing meat.

There are 3 reasons for avoiding meat. One is the ethical reason, because during the last century meat production has transitioned everywhere to using methods that can hardly be considered anything else but continuous torture. There are also certain health risks associated with meat and there is also the reason that the real cost of meat may be greater than it appears to be, due to negative environmental consequences (i.e. pollution).

If some kind of protein extract or some kind of fake meat is more expensive than real meat (per protein content), you can be rather certain that the negative environmental consequences are worse than for real meat, because the higher cost is likely to be determined by the consumption of more energy and of various kinds of chemicals during the production of the meat substitute.

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Economy of scale and subsidies have a major influence on shelf prices. Is is a red flag to be a small producer and/or not profiting from public money? Some wouldn't cold-ban a product only based on it's price, especially if it's pioneering.

Being "certain that the negative environmental consequences are worse" seems an stretch from weak initial judgement.

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Higher cost doesn't always indicate negative environmental consequences. It could be (and seems likely to me) that harvesting one cow's worth of plant protein is more labor intensive which isn't necessarily bad for the environment. If you compare two soy crops, one that uses herbicides and another that uses manual labor to pull weeds, the latter will be more expensive and better for the environment
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Shrimp, crayfish and lobster are pretty much insects, adored by many.
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Those are at least big enough that you don't have to eat the shells. (Fun aside: Technically, the grouping is closer to the other way around: insects are classed under crustaceans these days.)
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>there's some social or moral incentive to avoid real meat, that adds value to plant based alternatives.

This is missing the key point that like 95% of people in the world are not vegans, don't find any moral issues with eating meat, and thus produce zero social pressure. Fungi burgers MUST come with an actual benefit for the majority of people. It needs to be seen as some combination of "Tastey", "healthy", "cost effective". If fungi burgers were $2/lbs and tasted pretty close to a beef burger, then people would flock to them. The problem with Impossible burgers were worse, more expensive, questionably "more healthy" and entirely relied upon the moral/social issues which only mattered in a few small slices of society.

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Having it be cheaper would make it a real game changer -- if "chicken nuggets" and "burgers" were functionally equivalent (nutrition, appearance, mouthfeel, etc) and cheaper, then we'd start to see serious changes in animal husbandry.

It will never go away but if it becomes more niche then it's likely that what is produced will be done so more humanely (branding and perception of quality)

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