Venture investment in livestock management technologies hits record $470 million
Investment activity is being accompanied by rising global consumption of animal protein, driven by population growth and dietary changes. In the United States, additional demand drivers include the growing use of weight-loss drugs and the prioritization of meat in government dietary guidelines. Drugmakers and investors are backing solutions that combine maintaining herd health with improving production efficiency. Roddy O’Neill, head of healthcare at investment bank Lincoln International, expects particularly strong activity in the industry over the next 24 months. He said the sector is already facing unprecedented demand for protein and unprecedented protein prices.
Major market players have struck several deals in 2026. In June, Merck & Co.’s animal health division agreed to acquire Targan, a US developer of poultry technologies. Merck is also investing $895 million to expand animal health manufacturing in Kansas. In May, Elanco Animal Health acquired Netherlands-based AHV International, which specializes in dairy cattle health. Earlier, in March, Zoetis reached an agreement to acquire Neogen Corp.’s animal genomics business in a deal valued at $160 million.
Elanco chief Jeff Simmons forecasts that the farm animal business will remain a mainstay of the industry at least through the end of the decade. He expects annual growth of 4–7% in the segment. Within Elanco, solutions for ruminants, primarily cattle, are the fastest-growing business, with revenue rising 12% in 2026. Simmons emphasized that, in animal health, even a productivity gain of half a percentage point makes a meaningful difference.
Beyond medicines, genetic technologies, automation and livestock monitoring are increasingly attracting capital. These tools enable early disease detection, help determine the right time for treatment and reduce production losses. Joe Crotty, managing director at investment bank Livingstone Partners, links buyer interest to technologies that improve the economics of raising animals. Targan’s technologies, for example, automate chick sexing and sorting to produce more uniform batches. Another of the company’s technologies enables rapid spray vaccination of day-old chicks.
Merck is also developing its own tools for monitoring farm animals. The launch of a beef cattle monitoring system in Australia is planned for mid-2027. In the United States, the company plans to conduct a pilot project monitoring pigs throughout a full production cycle. The system is expected to help farms determine the most suitable time to send animals to market.
The farm animal health business has traditionally been more stable and less profitable than the development of medicines for pets. Products must meet safety requirements both for the animals themselves and for consumers of the food derived from them. This lengthens development and complicates regulatory procedures. Phibro Animal Health chief executive Dani Bendheim highlighted the difference in customers’ willingness to pay: in the pet segment, a single drug sale can be worth $1,000, whereas cancer treatment for a cow does not attract that level of spending. Phibro produces vaccines, medicated feeds and other products for the main livestock sectors.
The potential to improve farm productivity sustains investor interest in the sector despite its lower margins. Vaccines, antiparasitic treatments and monitoring systems help prevent widespread disease and reduce livestock losses. Rick DeLuca, head of Merck’s animal health business, said nutrition has moved to the center of the global agenda and, in his view, will remain there. He linked this to the company’s intention to help producers achieve greater productivity.
