I think it is real meat.
While I do think it's truly disgusting, that's kind of the point she's making, isn't it?
Is wearing meat really any worse than eating it?
You don't need to eat meat - we live in times of plenty. People eat meat it because they enjoy it. Perhaps Lady Gaga enjoys wearing it.
When you eat meat you're so used to it, you can forget it's actually bits of another being's flesh. But the meat dress is so in your face you can't ignore it.