Right, I'd expect the same thing as with horses and other work animals: once the tech makes them obsolete and the current generation dies out, they'll still be around, but for more niche, boutique uses (racing, riding around the ranch, visiting schoolchildren), not the dystopia they had been put through before.

Who is going to be pay for the raised cost then. Government tax?

Many people (/me included) already buy sustainably-raised meat direct from farmers. It's better tasting and often cheaper than meat in the supermarket.