OPTIMAL INVESTMENT PATHWAYS FOR NEW CATFISH PRODUCTION TECHNOLOGIES  

The growing interest in more intensive catfish production technologies makes it important for catfish farmers to understand the best investment plan to transition an entire farm to the new technologies. A 6-year mixed-integer-recursive programming model was constructed and solved iteratively to identify the best strategies to transition US catfish farms to new, productivity-enhancing practices. The model included traditional ponds, renovation activities to re-work existing ponds, to construct split ponds, or to add additional aeration, and production activities with the new systems. Farm scenarios were developed that differed in the percentages of ponds that required renovation, farm sizes, and access to varying amounts of investment capital. The model selected primarily adoption of split ponds as the profit-maximizing strategy under current prices and unlimited investment capital availability. However, restrictions on investment capital availability had the greatest impact on farms that required the greatest renovation. Farms with more newly renovated ponds (that generated greater revenue and increased capital available for re-investment) could alleviate the effect of reduced capital availability and transition more rapidly to alternate technologies. Larger farms could transition to alternate technologies more quickly than could smaller farms under various renovation scenarios. Higher feed prices and lower fish prices shifted the profit-maximization strategies from split ponds to intensive aeration systems and traditional single batch systems (Table 1). Results of this analysis provide guidance to farmers to formulate optimal adoption pathways to invest in new technologies, given the various farming, financial, and market conditions addressed in this analysis.