Category Archives: Business

“Production and economic assessment of giant kelp Macrocystis pyrifera cultivation for abalone feed in the south of Chile” (Correa et al 2016)

Citation: Correa, T., Gutierrez, A., Flores, R., Buschmann, A., Cornejo, P., and Bucarey, C. (2016). “Production and economic assessment of giant kelp Macrocystis pyrifera cultivation for abalone feed in the south of Chile“. Aquaculture Research, 47, pp. 698-707. DOI: 10.1111/are.12529

Summary By: Alexandra Pounds

Image Credit: Flickr

  • Big Picture: Farmed kelp for abalone feed in Chile has higher levels of protein. With 30 hectares of production at $78/tonne, the farm would be profitable and return investment within the first year.
  • Abalone farmers in Chile feed kelp to their stock, because other studies have show that it is a better food source for abalone growth. Unfortunately, wild kelp is only available seasonally. Kelp farming is a potential solution to the demand for kelp and prevent overharvesting wild kelp populations. This paper examines whether or not kelp farming in Chile is profitable.
  • Methods:
    • The researchers designed and installed a kelp farm off the coast of southern Chile. They started with 2.4 hectares for 2 years to establish whether the crop would survive the winter season. Afterwards, it was increased to 4 hectares.
    • The researchers used 2 trial units (one in summer, one in winter) to extrapolate annual expenses and yields for a bigger farm.
    • The farm relied on manual labor for picking and planting crop.
  • Results:
    • If the market price for kelp is $78/tonne, a return on investment can be made in the first year by harvesting 30 hectares. The farm would be profitable within one year.
    • Best profitability would be at 50 hectares per year.
    • Protein content of harvested kelp was 9%, which was significantly higher than wild kelp in the area.
    • The summer crop produced significantly greater biomass than the winter crop. Both crops together could produce about 41kg per meter of rope per year.
    • Production costs for 2 harvests (one year), of 10 hectares was $109,396.
      • Fixed costs = 13%
      • Variable costs = 87%
  • Implications
    • Kelp farming in southern Chile could be a profitable way to feed farmed abalone.
    • Placing kelp farms around Chilean salmon farms could increase yield due to higher nitrogen levels in the water. This would have the additional benefit of reducing environmental impacts of the salmon farms.
    • Current kelp prices are not high enough to support farms that produce less than 30 hectares.
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“Increasing fish farm profitability through aquaculture best management practice training in Egypt” (Dickson et al 2016)

Citation: Dickson, M., Nasr-Allah, A., Kenawy, D., and Kruijssen, F. “Increasing fish farm profitability through aquaculture best management practice training in Egypt”. Aquaculture, 465, pp. 172-178. DOI: 10.1016/j.aquaculture.2016.09.015

Summary by: Alexandra Pounds

Image Credit: Wikimedia Commons

  • Big Picture: Fish farms in Egypt that adopt BMP are more profitable than those that don’t. Having BMP can increase the farm’s profitability, mostly due to better feed management practices.
  • Egyptian aquaculture is growing, but farmers had little training or education resources. Best Management Practices (BMP) training programmes were introduced to help. This survey examined whether or not implementing the BMP had resulted in greater profits and productivity.
  • While BMP are usually precursors to many certifications, farmers may see them as a burden rather than a help.
  • Aquaculture represents 77% of Egyptian fish production (mostly tilapia and mullet)
    • 85% = pond-based
    • 15% = cages, rice fields, and intensive farms
  • Key messages from BMP training:
    • reduce overall stocking rates to harvest more fish at larger sizes
    • fertilize the pond to stimulate plankton growth (an additional food source for fish)
    • reduce feed waste and use high-quality feed
  • Methods:
    • Farms that had implemented BMP were compared with farms that had not implemented BMP.
    • Data from 3715 farms were used, 70% of which were considered “high adopters” of BMP
    • An online questionnaire was distributed, and some farmers were interviewed.
  • Results:
    • BMP farms were more likely to practice mullet & tilapia polyculture rather than tilapia monoculture.
    • BMP training resulted in increased profitability, but had no effect on productivity. Average annual net profits were $15,000 greater in BMP farms than non-BMP farms.
    • BMP mostly improved feed and fertilizer management, which improved FCRs. BMP farms used less feed.
    • Operating costs were lower in BMP Farms.
    • There was no difference in total sales between BMP and non-BMP farms
    • BMP did not make a difference to total yield; however, farms with BMPs had larger average fish sizes.
    • BMP farmers were younger and had smaller families than non-BMP farmers (although this was not statistically significant). Statistically, the BMP farmer and non-BMP farmer demographics had no differences.
  • Limitations
    • There may have been some selection bias, as farmer interviews were selected based on connection with certain BMP trainers.

“Commercial aquaponics production and profitability: Findings from an international survey” (Love et al 2015)

Citation: Love, D., Fry, J, Li, X., Hill, E., Genello, L., Semmens, K., Thompson, R. (2015). “Commercial aquaponics productio and profitability: Findings from an international survey.” Aquaculture, 435, pp. 67-74. DOI: 10.1016/j.aquaculture.2014.09.023

Summary By: Alexandra Pounds

Image Credit: Wikimedia Commons

  • Big Picture: Commercial-scale aquaponics is a relatively young industry, and this study was unable to determine if it will be profitable. The study did examine what most common practices were for aquaponics production in the USA. 
  • While many studies have focused on lab-scale or small-scale aquaponic production, his study aimed to examine commercial-scale aquaponics production. It looked at methods, yields, and profitability.
  • Methods:
    • Online international survey, responses were collected over 3 months
    • They used several statistic and data software to help with analysis.
  • Results:
    • Responses:
      • 257 responses. Only 188 were considered “commercial” producers.
      • 81% of responses were from the USA.
      • 77% of responses were male.
      • 93% had more than high school degrees, 27% had a graduate degree.
      • As less than 10% had been farmed for more than 10 years, it indicates that the industry is growing and experience levels are low.
    • FACILITY: 41% used greenhouses & a second facility. 31% used only a greenhouse, and 4% used rooftop farming. 74% owned the property.
    • SYSTEM: 71% designed the system themselves. 29% purchased a kit or hiring a consultant.
      • 43% used supplemental lighting
      • 43% raised or bred their own fish using a nursery or hatchery.
      • Media:
        • 77% used floating rafts
        • 76% used media beds
        • 29% used nutrient film technique
        • 29% used vertical towers
        • 6% used wicking beds
        • 5% used Dutch buckets
      • Production & Food Safety:
        • Over 50% did not have on-site cooling facilities
        • 33% did not have on-site bathrooms or adequate hand-washing facilities
        • 38% lacked a food safety plan (indicating educational needs)
    • PRODUCTION:
      • Median quantity animals: 23 to 45 kg/yr
      • 24% did not harvest any fish in the past year, probably because they were new operations
      • Median quantity of plants: 45 to 226 kg/yr
      • Production is skewed towards plants (ie, on average, aquaponics farmers produce more plants than animals). This is probably because:
        • particular species of plants were more valuable than the fish (herbs versus tilapia)
        • plants grow faster than animals, and can be harvested sooner
        • biomass conversion ratio for plants is better than fish – for example, 9kg of lettuce can result from fish manure from 1kg of fish feed, whereas feed conversion ratios of fish are around 1:1
    • SPECIES:
      • Aquatic animals: tilapia (69%), ornamental fish (43%), catfish (25%), “other” (18%), perch (16%), bluegill (15%), trout (10%), and bass (7%).
      • Most farmers raised 2-3 species of animal.
      • Plants: basil (81%), salad greens (76%), non-basil herbs (73%), tomatoes (68%), head lettuce (68%, kale (56%, chard (55%, bok choi (51%) peppers (48%), and cucumbers (45%)
    • MARKET: sold to a variety of market types, including grocery stores, farmer’s markets, etc. Many sold at their own farm.
    • PROFITABILITY:
      • 30% of respondents used the aquaponics as their main source of income
      • 31% of respondents reported that their business was profitable over the last 12 months.
      • Median gross sales revenue: $1000-$5000 over 12 months
      • 10% of respondents received over $50,000 over 12 months
      • those that sold other products (other than fish & plants) were more profitable
      • those who were more knowledgeable were over 2x as likely to be profitable.
      • those who used aquaponics as their primary source of income were over 5x as likely to be profitable.
      • Those who had >$5000 in revenue were more likely to be profitable
    • SUMMARY: The following characteristics were statistically associated with profitable businesses:
      • aquaponics was the primary source of income
      • located with the USDA’s “plant hardiness zones” (zones with annual extreme temperatures above 0 deg F)
      • gross sales revenue >$5000
      • greater aquaponics knowledge
      • sales of non-food products (ie, agrotourism, consulting, supplies)
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