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Aquaculture: Realities and Potentials When Getting Started

by 5m Editor
25 June 2007, at 1:00am

By Marley Beem, Oklahoma State University and published by Southern Regional Aquaculture Center (SRAC).

The outlook for aquaculture in this country is bright. Health-conscious consumers are increasing their consumption of fish and shellfish, and ocean fish catches are declining and are subject to contamination scares. Thus, there is an increased demand for farm-raised fish.

Southern states have a long growing season and other resources that have contributed to the establishment of large catfish, baitfish, and crawfish aquaculture industries. While prospects for fish farming in the South in general are very good, the potential for individual success varies widely. This publication is designed to help individuals interested in aquaculture gain a better understanding of the challenges involved in establishing a successful fish farm. Although most information here applies to traditional freshwater aquaculture, readers interested in marine culture systems and specialty type aquaculture will be able to glean useful information. A glossary, included at the end, defines many industry terms.

Is Fish Farming for You?

Operating a fish farm is similar to operating a cattle feedlot. Closely packed and heavily fed fish must be watched closely to detect problems early before they turn into disasters. This is difficult because fish cannot be readily seen. New fish farmers may feel like they are working blindfolded and without sleep until they become comfortable using water quality test equipment, water color changes, and feeding response as their “eyes” to detect early warnings of problems. Nighttime work is done throughout the warm months and includes checking dissolved oxygen levels and running aeration equipment as needed.

As with any other business, finding and keeping good help also is a challenge. Workers must be capable of making the right decisions when the farmer/manager is unavailable. Also, finding and developing good markets for the product takes considerable time and energy. A good fish farmer works to earn and maintain the trust of buyers while continuing to search for new marketing opportunities.

Even with good management practices, fish farmers can still face disasters.

  • Unusually hot, cold, or cloudy weather can stress fish and bring on disease.
  • Fish can be affected by off-flavor problems that make them unmarketable for weeks or months.
  • Flooding and the resultant loss of fish plague many fish farms.
  • High feed prices and low fish prices can lead to economic losses even in years when production is good.

Because fish farming overlaps with public issues such as wildlife conservation, food safety, and water quality, a fish farmer must be ready to endure a gauntlet of regulations and permitting procedures.

  • Fish-eating birds are protected by federal law and can be killed in limited number only after obtaining a permit or written permission.
  • Approved drugs and treatments for fish diseases are in short supply.
  • Many states have or are drafting laws to control water withdrawal and discharges from fish farms.

Regulations requiring water conservation and reuse for crop irrigation are likely to become increasingly common for aquaculture in the future. (Refer to SRAC-465.)

However, in spite of the problems, established fish farmers enjoy a great way of life. Their work and lifestyle are rewarding experiences. Fish farmers enjoy a deep sense of pride and satisfaction as they watch their fish feeding, growing and finally being harvested.

Facilities that Work

Although fish farming may seem like a brand new idea, it really is not. Decades of work by farmers and researchers have led to the development of proven facilities for growing fish. As a new fish farmer, you should keep things simple by sticking closely to these tried and proven designs. Control your urge to invent until you have several years experience in fish farming and fully understand all the reasons why things are done certain ways.

The great majority of aquaculture products in the South are produced in levee and watershed ponds. Other production facilities, including cages, raceways, flow through tanks and recirculating systems, have not been as widely successful for a variety of reasons.

Levee ponds are standing water impoundments built by excavating the pond area to a shallow depth and using the soil obtained to build a perimeter of levees or dikes. The advantages of levee ponds include the ability to havest by seine without draining and the availability of oxygen all the way to the bottom of the pond. Disadvantages include relatively high construction costs and the need for a site with a slope of less than 5 percent, soil clay content of at least 20 percent, and wells or other reliable water sources. Occasionally, a fish farmer will choose a site with a shallow water table and excavate down into it. This should not be done because management of such a pond is difficult.

Levee ponds may not be fascinating, but they are state of the art when it comes to reliable, economical production of catfish and most other warmwater finfish. Crawfish are produced in much shallower levee pond structures. (Refer to SRAC Publications 100, 101, and 240.)

Watershed ponds are standing water impoundments built by damming ravines or small valleys. From 5 to 30 acres of watershed is needed to supply the water for 1 surface acre of pond. Advantages of watershed ponds include lower construction costs than levee ponds and the ability to make use of steeper sites. Disadvantages include the inability to refill ponds at will and lack of oxygen at greater depths, which can lead to fish kills if a turnover occurs. (Refer to SRAC Publication 102.)

Cages are floating enclosures in which fish are grown and fed a complete feed. The main advantage of cages is that fish are cultured in existing water bodies that would otherwise be impractical to harvest. Main disadvantages are quick spread of disease and greater vulnerability to theft, disturbance, and moderately low oxygen levels. (See SRAC Publications 160-166.)

Raceways and flow through tanks are long channels or tanks through which fresh water flows continuously and is then discarded. Main advantages of raceways and flow through tanks are ease of handling and harvesting fish and control of waste buildup by flushing. The main disadvantage is the shortage of sites having abundant water of the right tem- perature, that is artesian water or water available without excessive pumping costs. Groundwater in the South is generally suitable for cold water fish such as trout, but too cold for warmwater species such as catfish. Heating water for raceways is prohibitively expensive.

Recirculating systems are tank systems in which water is filtered and reused. Filtration is conducted by large beds of bacteria, known as biofilters. Main advantages of recirculating systems are that ideal growing temperatures can be maintained year-round and they can be located anywhere. Main disadvantages are lack of reliability, high production costs, and need for constant attention. Biofilters can be killed by chemicals that are used for disease treatments. They also can die unexpectedly without any apparent reason. More research and development work appears necessary before recirculating systems will be economical for most applications. At present these systems are being used successfully in some hatchery systems and for broodstock conditioning and production of very high value species. (See SRAC Publications 451-454.)

Location is Everything

Much time, effort and money have been wasted trying to force fish farms to fit in impractical locations. First and foremost, a fish farm needs abundant, good quality water. To raise just 1,000 pounds of catfish requires about 244,000 gallons (0.75 acre-feet) of water. This is in a typical levee pond that is drained once every 5 to 10 years. Raising the same amount of catfish in a raceway requires an enormous amount of water—roughly 65 times as much as in a levee pond!

Underground water from wells and springs is preferred for fish farming because it is free of wild fish and parasites. Some fish farms do use water from lakes and creeks but problems with fish parasites and invasion by trash fish are a constant battle. Surface waters also carry the threat of random contamination by pesticides or other harmful chemicals.

Some ground and surface waters are totally unsuitable for fish farming. The water source should be tested before purchasing property or breaking ground for construction. The county Extension educator or aquaculture Extension specialist can assist in determining how best to test the suitability of water for fish farming.

Suitable soils and slopes are vital for the proper, economical construction of ponds of the type used to produce most aquaculture products in the South. To hold water, soils generally need to have 20 percent or more clay content and be free of rock outcroppings, sand layers, and other causes of excessive seepage. Ponds built where soils do not hold water well often must be abandoned because corrective measures are costly. Levee ponds generally are built only in areas with less than 5 percent slope; about 1/2 percent is ideal. (See SRAC-100 and SRAC-101 for more information on levee ponds.)

Areas with more than 5 percent slope are generally better suited for watershed type ponds. SRAC-102 has more information on watershed ponds. The county Natural Resources Conservation Service office can assist in evaluating the suitability of a site for pond construction. Raceways and other production facilities are less dependent on soils and slopes.

Laws and regulations can prohibit fish farms on certain sites. A site classified as a wetland usually cannot be developed. Feeding of any livestock in the watershed of a municipal water supply lake may be prohibited. Sites close to public waters may not be feasible for fish farms because of concerns about escape of fish or discharge of water. Contact a county Extension educator or aquaculture Extension specialist for a list of agencies involved in permitting fish farms. Obviously, it is best to investigate possible restrictions and have permits in hand before making a major investment in a site.

What to Grow?

Like any other business, fish farms must produce, at a profit, a marketable product. Fish farmers located outside of major aquaculture areas must work doubly hard to be sure that their resources are suitable for what they wish to produce and to build their own markets from the ground up. Ideas for developing markets are contained in SRAC-350, Small Scale Marketing of Aquaculture Products. In major aquaculture areas, there are processors and other established markets for certain products.

Many prospective fish farmers want to concentrate all their time and effort on growing fish, but often it is the marketing of their product that determines success or failure. This is especially true if new markets will have to be developed for the final product. This has even been true for those selling to established processing plants. A new fish farmer must consider what to do if the intended processor goes bankrupt, as many have. Consequently, plan to spend a considerable amount of time and energy developing primary and secondary markets for products, and be ready for all possibilities.

Catfish are the major aquaculture product in the South. Production is centered in Mississippi, Arkansas, Alabama, and Louisiana, although smaller industries exist in most other southern states. Catfish production is divided into fingerling production and food fish production. Many producers specialize in one or the other. Key requirements for levee pond catfish farms include 25 gallons per minute of water for each surface acre of pond and land suitable for levee ponds as described in the previous section. The investment needed ranges from $3,000 to $5,000 per surface acre, excluding land costs. Key land and water requirements for watershed pond catfish farms include those listed for watershed ponds in the previous section. The investment needed ranges from $2,000 to $4,000 per surface acre, excluding land costs. (Refer to SRAC Publications 180 and 181 as well as catfish farming fact sheets available in your state.)

Crawfish production is centered in Louisiana and eastern Texas, although there are small farms scattered throughout the South. The red swamp and white river species of crawfish are the most commonly cultured. Key requirements for these and other burrowing species include heavy clay soils and 70 to 100 gallons per minute of water per surface acre of pond. Flat sites are needed to allow economical pond construction. The hand labor needed to empty and reset traps daily during the harvest season may be difficult to obtain outside of major crawfish production areas. An investment of approximately $90,000 is required for a 40-acre crawfish farm, excluding land costs. (Refer to SRAC Publications 240-242.)

Baitfish production consists mainly of golden shiners and smaller amounts of fathead minnows and goldfish. Arkansas dominates baitfish production. Key requirements include a site suitable for levee ponds and 20 or more gallons of water per minute per surface acre. The investment required for a 160-acre baitfish farm is $720,000. (See SRAC Publications 120-122.)

Largemouth bass, bluegill and other sport fish fingerlings are widely produced for stocking recreational fishing ponds. Key requirements include land and water resources suitable for levee or watershed ponds. Special skills are required to handle, protect, and provide food for very young fish. Experience in producing large fish is usually obtained before the production of fingerlings is attempted. (See SRAC Publications 140, 141, 142, 200, and 201.)

Rainbow trout farming in the South centers in the Smoky Mountains of North Carolina, Tennessee, and northern Georgia where water from mountain streams is diverted to flow through concrete raceways and tanks. A small farm is considered to be one with a water flow of 500 gallons per minute. The establishment cost required for such a small farm is approximately $26,000 excluding land costs. (See SRAC Publications 220, 221, 222, and 223.)

Striped bass, hybrid striped bass and red drum for food are newly developing species for fish culture. Farms are concentrated along coastal areas. Levee pond culture predominates with some interest in flow through and recirculating systems. Water should have an alkalinity of 100 mg/l or more. (See SRAC Publications 300, 301, 302, 303, 320, 321, 322, 323, and 324.)

Tropical aquarium fish for the pet market are raised mainly in Florida because of the favorable climate. Both small earthen ponds and recirculating systems are used. The conditions required to spawn and rear tropical aquarium fish can be difficult to provide. Requirements vary from species to species and information may be difficult to obtain.

Other species may be feasible for individual situations. Some species, however, may never be developed beyond the experimental stage. Many types of fish and shellfish are uneconomical or impossible to produce because of lack of proven feeds or fingerling rearing techniques or other technical problems. Tried and proven forms of fish farming are the best methods for beginners. There is no easy money to be made in aquaculture. If someone offers something that sounds too good to be true, it probably is.

Reasons to Start Small

Big mistakes are expensive. There is little use for facilities built the wrong way or on the wrong site. The most common examples are ponds that will not hold water or cannot be drained.

More time is available to develop markets and learn what your customers need. You may find a more profitable market than you had originally planned and need to change your way of growing and harvesting to fit this new market.

Design of ponds and facilities can be improved. Changes in pond size or other structures can be made easily when expanding.

Fish farming may not be to your liking. The labor or management required may not be what you had expected.

Water Quality Management

Figure 1. The price of poor water quality management is dead or sick fish.

The most important factor in aquaculture is water quality. Dissolved oxygen levels in water can drop quickly and suffocate fish. Wastes produced by fish can build up, harm their delicate gills, and lead to other problems. Fish farmers can deal with these dangers, but only after they have learned how to use water quality test equipment. The Cooperative Extension Service in most southern states offers water quality workshops for fish farmers. These workshops provide hands-on experience using test equipment, and teach what the water quality numbers mean and what management actions to take. (See SRAC Publications 370, 371, 462, 463, and 464.)

New fish farmers who delay buying and learning to use test equipment often believe the warnings do not apply to them. Then suddenly they discover an entire pond of dead or sick fish (Figure 1). Producers who take the time to check oxygen, ammonia, nitrite, and other water quality factors on a regular basis find that it pays off by greatly reducing fish kills and disease problems.

Do your Homework

As you make plans, you will find it to your advantage to ask some hard questions. Find out if your ideas make good technical and economic sense by talking with a wide range of people. This includes potential customers, Extension specialists, Natural Resources Conservation Service professionals, businessmen, and others. Visit as many fish farms as you can. Keep an open mind but remember that some fish farmers have pet theories and ideas that may or may not apply to your situation.

Following are some questions that must be asked before a major investment in a fish farm is made.

Production Technology

  • Is the species you plan to produce being profitably produced on commercial farms or is it still in the experimental stage of development? Be skeptical of claims of recent breakthroughs.
  • Has the proposed production facility design been proven through widespread profitable use or is it an experimental system? Experimental species or production systems may be more interesting, but few individuals can afford to risk the money needed for such research.

Physical Resources

  • Does the proposed site have the right soil, slope, water, and road access conditions for the type of production facility to be built?
  • Is there a better type of production facility for this site?
  • Is the proposed site only marginally suitable? If so, consider other sites before committing yourself.
  • Is it feasible to obtain needed permits for the proposed site and type of production system? Some sites may be located in or close to highly regulated resources such as public water supply lakes or sensitive wildlife habitat areas.

Marketing

  • Who are your planned customers?
  • How much will they buy from you, how frequently, and at what price?
  • What are their preferences/demands in product size, form, uniformity, and other factors?
  • Is the market already saturated?
  • Who is the competition and how will you compete against them? Get a realistic picture of your strengths and weaknesses by looking at the situation from the customer’s point of view.

Seedstock, Feed and Specialized Supplies

  • How will you obtain a reliable supply of fingerlings or other seedstock at a reasonable price?
  • Can you afford the extra investment in time and money needed to develop your own seedstock production capacity?
  • Is there a proven, economical feed available for the species you plan to produce?
  • Do you have a reliable, affordable source for other specialized supplies and equipment?

Financial Factors

  • What is your strategy for obtaining funding? A formal business plan should be prepared any time a major investment is planned. The county Extension educator should be able to provide fact sheets or other assistance in preparing business plans. (Also see SRAC-381.)
  • Are there other ways that the money could be invested for greater return at less risk and equal personal satisfaction?
  • Can your financial situation support a new fish farm that will suffer a loss or only break even the first several years of operation?

Personal Factors

  • Can your personal situation stand the extra stress of starting a new enterprise?
  • Do you and/or your employees have the skills needed to make the proposed operation work? Consider management skills as well as mechanical and farming skills needed.
  • Would you hire yourself to do the planning, management and day to day labor required? Be honest with yourself about your strengths and weaknesses.

Planning for the Unexpected

  • How will you minimize or cope with construction delays caused by bad weather, slow acquisition of government permits, lack of specialized equipment or other bottlenecks? Hope for the best but be prepared for the worst.

Think like a Banker

Take the plunge into aquaculture only after careful planning. Sample enterprise budgets that are available through the Cooperative Extension Service are a good starting point. Read them carefully and make all changes needed to fit your situation. Other financial statements required for business proposals are discussed in SRAC-381.

Figure 2. An enterprise budget format.

Raising nontraditional species will require an original budget. First, consider the income your fish farming operation will produce. Generally, this means estimating the amount of fish you will produce and the price you will receive for them. Next, make a list of the expendable items you will need to buy each year to produce your fish. This will include feed, fingerlings, labor, fuel, electricity, equipment repair, interest on borrowed money, etc. These are your variable costs.

Finally, make a list of costs for everything associated with machinery. These are your fixed costs. Examples include pond construction, wells, pumps, trucks, feed bins, tractors, aerators, and buildings. Do not overlook the, cost of buildings, tractors, or other equipment that are already purchased. Part of their costs should be charged off each year of their expected life, as they eventually will need to be replaced. Equipment also used for other jobs on the farm should be partially charged so each enterprise can stand on its own. For example, a tractor that is used 20 percent of the time for fish farming would show up on the list as 0.20 tractor.

A major reason to estimate income and expenses is to be able to project your return or profit. Another use of the same numbers is to project a break-even cost for what you produce. To obtain these critical numbers, organize the information into an enterprise budget format. The numbers already are divided into three lists: income, variable costs, and fixed costs. Now put these numbers into four columns: item, quantity, dollars per unit ($/unit), and total as shown in Figure 2. Do not forget to include any charges for interest if variable or fixed costs are financed.

Do not get discouraged if the estimated return is tiny or even negative. The first budget is just a starting point. Consider ways to reduce costs. For example, doing your own pond construction work with used equipment may reduce pond construction costs by half. Another way to reduce costs would be to use your own funds instead of borrowing.

A third way to reduce costs would be to expand. This is often the only way to earn a profit when selling to high volume, low price buyers such as processing plants. Try developing budgets for different size fish farming operations to determine how large your operation must be in order to reach different income levels.

Managers of small operations generally need to seek out buyers other than processing plants in order to operate profitably. SRAC-350 discusses many of these alternatives. Be creative—time spent finding and developing specialty markets can yield good returns.

For Non-farmers

Most of today’s farmers were born and raised on farms. Very few farmers learned how to farm as adults. As a non-farmer, this puts you at a considerable disadvantage. You will need to go through a period of on-the-job training. Are you the kind of person who does most of the maintenance and repair work? Can you put up with outdoor work during bad weather and odd hours? If so, great—these are skills and tolerances you will need on a fish farm. If not, you may wish to reconsider the vocation of fish farming.

Agriculture has never been an easy way to make a living. Far from leading a peaceful, worry-free life, farmers often face weather problems, low market prices, crop losses to diseases, and long working hours. Farming today requires much more than just being able to produce a crop. Successful farmers must have a sound understanding of the economics of their operation, keep good records, and work to develop the best markets for their product.

The Bottom Line

Commercial aquaculture involves all the struggles that go with any form of farming. In addition to these, fish farmers must plan carefully to make sure that their production facility is based on a tried and proven design, the site conditions are right, and reliable markets exist or can be developed.

In return for their efforts, fish farmers enjoy an independent, countryside lifestyle and can expect to receive a reasonable return on investment, similar to many other forms of agriculture.

June 2007

5m Editor