Aquaculture's Tide Rises

October 13, 2015 12:00 PM
 
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Fish consumption rises as U.S. producers fight for a niche

If you sense something fishy, it might be because you’re standing near a catfish farm in western Alabama, a trout stream in southern Idaho or a converted hog facility in Iowa dedicated to raising tilapia and shrimp.

Most row-crop producers aren’t well-versed in aquaculture, but a growing population that desires sustainable meat will drive demand. 

Moreover, the U.S. spotlight on aquaculture glowed brighter in August this year when Minneapolis-based Cargill announced plans to acquire EWOS, a global salmon feed-maker, for $1.51 billion. 

The challenge for existing U.S. aquaculture producers—and those who’d like to diversify into the market—is to find a niche that can turn a profit for the operator.

“A lot of people try these and lose a lot of money,” explains Claude Boyd, a catfish production expert and longtime professor at Auburn University’s School of Fisheries, Aquaculture and Aquatic Sciences.

Yet at operations near feed mills or suitable water bodies, producers can make inroads with retailers such as Whole Foods. The store buys inland shrimp from David Teichert-Coddington and his business partner, H.R. Schmittou, of Greene Prairie Shrimp in Boligee, Ala.

“The only way we can compete in the shrimp market is to sell in a niche that wants U.S.-produced shrimp,” says Teichert-Coddington, whose farm is located next to a naturally saline aquifer. “They want it the way we produce it, which is chemical-free. We don’t use any chemicals in production or packing.” 

It took the business 10 years to solidify its markets. It received help in the process when Seafood Watch green-lighted shrimp in the U.S. cultured inland in the type of system Greene Prairie uses.  

“Currently we cannot produce enough product to supply our market,” he says.

Huge World Demand. Annual global aquaculture production is valued at $170 billion, or 100 million tons of fish products, says Sara Olson, an analyst at Lux Research, which studies emerging and undervalued technology.

China is the fastest-growing aquaculture producer, and its No. 1 product is carp—the most widely-
produced fish on the planet yet one that poses environmental concerns. Unlike most U.S.-produced fish, which consume feed, fish meal or fish oil, carp live in filter-fed environments and grow on phytoplankton, which is cheap to produce but can harm water quality. 

In the U.S., catfish producers led the way to Environmental Protection Agency rule-making that is largely supportive of aquaculture, says John Jensen, professor emeritus in aquaculture at Auburn University.

To Jensen, aquaculture’s lack of discharge into U.S. waterways presents one of several competitive advantages. Although fish producers and processors have failed to build relationships with overseas customers in places such as Asia, he sees opportunities to develop an outside market in the future.

“We’re in kind of a good situation where we do have the water resources; we have grain here that’s the least expensive of any of the countries I go to,” he says. 

 

Case-Study States. Domestically, fish demand is complicated. Although U.S. consumers adore shrimp—estimates suggest the average American eats 4 lb. annually—at least 85% of fish eaten domestically is imported from cheap global suppliers, Boyd says. 

For producers who make a living from aquaculture, then, success depends on a legion of interconnected factors: surrounding natural resources, production infrastructure and access to processors and buyers.

Two regions have taken advantage of those assets at a level few others have. The first is in western Alabama and eastern Mississippi, where catfish production along the coast is one of few economic bright spots. At least half of the industry raises a hybrid that represents the best of the channel and blue catfish varieties. 

“That’s revolutionized things,” says Craig Tucker, research leader at USDA’s National Warmwater Aquaculture Center in Stoneville, Miss. “That fish is resistant to a lot of diseases. It grows very rapidly and has a little smaller head, so you get less waste and a bigger filet.”

He expects the scales to be balanced even more in favor of fish producers: Soon, catfish will be under USDA—Food Safety Inspection Service, meaning exporters in China and Vietnam will have to meet those U.S. standards of processing and production.

Midwest farmers interested in aquaculture can also learn from Idaho, where producers farm 70% of the nation’s rainbow trout used for human consumption. Production varies vastly from catfish—for example, trout grow in structures called raceways built around springs, versus in ponds—but fish producers’ successes reflect a commitment to consumer tastes and technology. 

“Almost all of the trout that are produced are processed for additional value-added products like filets or smoked product or ready-to-heat type products,” explains Gary Fornshell, Extension educator for the University of Idaho. 

Future Of Fish. This past winter in Alabama, shrimp producer Teichert-Coddington and Schmittou grew rainbow trout in salt water with an eye toward future expansion.

“They grew very well,” Teichert-Coddington says. “We’re going to continue that this year.

To Jensen, the Auburn University professor emeritus in aquaculture, the operation is a sign of things to come in the industry.

“The future has arrived, but it can only get better,” he says.  


Aquaculture Start-Up Tips

Fish production isn’t an easy way of life, but neither are most ag careers. Experts advise farmers to take these steps before entering aquaculture.

Assess Feed. It’s tough to raise fish without a feed mill nearby. Alternately, raise varieties that don’t eat fish meal or fish oil, which are expected to be in short supply in the near-term.

Review Infrastructure. Hog barns used to grow tilapia are cropping up in the Midwest. Pencil out energy costs required to heat those facilities.

Consider Environment. Fish are fickle, requiring precise temperature and water quality. Technology to oxygenate water is crucial to success. 

Build Relationships. Successful fish farms build a rapport with regional processors as well as retailers who can carry their products. Emphasize sustainability and eater preferences in consumer marketing.


By Sara Schafer

Tilapia: The Next Poultry?

Quality: Mild-tasting fish fillets are boneless and appear clean when frozen.

Production: The majority of tilapia are farmed. They eat high-grain, low-protein feed.

Growth: Investments and vertical integration signal tilapia market expansion.

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