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Add To Calendar 23/02/2016 16:15:0023/02/2016 16:35:00America/ChicagoAquaculture 2016DOES IT MAKE ECONOMIC SENSE TO INTENSIFY PRODUCTION?  THE CASE OF SPLIT PONDS AND INCREASED AERATION RATES FOR US CATFISH PRODUCTION   LoireThe World Aquaculture Societyjohnc@was.orgfalseanrl65yqlzh3g1q0dme13067DD/MM/YYYY

DOES IT MAKE ECONOMIC SENSE TO INTENSIFY PRODUCTION?  THE CASE OF SPLIT PONDS AND INCREASED AERATION RATES FOR US CATFISH PRODUCTION  

Carole R. Engle* and Ganesh Kumar
 Engle-Stone Aquatic$ LLC, 1225 Cottontown Road, Strasburg, Va  22657
 E-mail:  cengle8523@gmail.com

Intensification of aquaculture production typically requires additional capital investment that also increases annual fixed costs with greater annual depreciation and interest on investment.  The economic incentive to increase yields frequently is driven by the need to spread the relatively greater amount of annual fixed costs over greater amounts of production to reduce per-kg costs of production.  However, if annual fixed costs increase with additional capital investment, does intensification increase profits?  

The U.S. catfish industry has begun to adopt several new production technologies.  The technology that has been adopted on the greatest number of farms and water surface area is the split-pond system, followed by that of increasing aeration rates (> 9.2 kw/ha).  Recent studies have shown that both split ponds and intensively-aerated ponds can be more profitable than traditional open ponds if stocking densities and feeding rates are managed appropriately. However, Figure 1 shows that yields in split-pond systems must exceed 10,000 to 13,636 kg/ha (depending on specific circulation system) to be profitable at catfish prices that have been observed commonly in recent years.  For intensively-aerated ponds, yields must exceed 10,000 kg/ha to be profitable (given recent catfish price levels).  

A catfish industry survey conducted in 2014 showed that 83% of the split ponds and 86% of the intensively-aerated ponds obtained yields in excess of the breakeven yield, indicating that they were profitable.  However, there were some ponds that did not produce at a profitable level.  The unprofitable ponds typically were stocked and fed at rates too low to achieve the yields necessary to be profitable with the new production technologies.  Given the greater intensity of production in the new systems, when problems do occur, the losses per ha will be greater than those in traditional open ponds.  Thus, more intensive management is also needed as production is intensified to minimize the financial risk inherent in intensified production systems.    

US catfish farmers recognize the key relationships among yield, annual fixed costs, and profitability.  A 2014 industry survey revealed that greater yield was the primary reason for adopting split-pond technology.  For those who had not yet adopted the new technologies, the additional investment cost was the major reason given for not adopting it.  Awareness of farms that lost money with the new systems likely caused some farmers to hesitate to change practices.   Those who relied more closely on extension advice when adopting the new technologies and used stocking and feeding rates shown by research to be appropriate tended to be successful.

Does it make economic sense to intensify production?  The answer depends on whether the sales revenue from increased production per unit of land area is greater than the increased annual fixed costs associated with the installation of additional infrastructure.  In the case of U.S. catfish farming, the answer appears to be favorable, under the catfish and input prices that have prevailed in recent years.




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