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Production economics of summer flounder Paralichthys dentatus aquaculture in a recirculating system

UNCW Author/Contributor (non-UNCW co-authors, if there are any, appear on document)
J. Kevin Yates (Creator)
Institution
The University of North Carolina Wilmington (UNCW )
Web Site: http://library.uncw.edu/
Advisor
Wade Watanabe

Abstract: An economic analysis is conducted for a summer flounder grow-out operation using a recirculating aquaculture system (RAS) based on engineering and biological parameters from the University of North Carolina at Wilmington’s near-commercial scale RAS facility located in Wrightsville Beach, NC. The analysis determines the profit-maximizing facility scale and harvest size, returns to management, and the sensitivity of financial performance to key biological, engineering, and economic parameters. Monte Carlo analysis is used to assess the impacts of uncertainty in flounder prices, electricity costs, and interest rates on financial performance. The UNCW study of summer flounder production in a near-commercial scale RAS (Carroll et al. in press) is used as a basis for developing simulation models of commercial scale summer flounder RAS facilities. All models assume that fish reach an average of 1.5 lbs (marketable size) with an 80 % survival rate and a feed conversion ratio (FCR) of 1.8 (the average FCR over all growth phases, and the lowest FCR observed during the first 7 months, of the UNCW near-commercial scale field study). The following key characteristics are used to distinguish alternative systems: system scale (0.5-acre, 1-acre, and 3 x 1-acre systems), length of grow-out cycle (13.4 and 20-months), tank size (15, 20, and 27 ft diameters), outdoor (security fence) vs. indoor (building) systems, tank type (fiberglass, steel, and glass coated steel), and fish transfer schedule (between tanks). Each model is analyzed assuming one of two alternative grow-out periods: 20 or 13.4 months. The 20-month cycle corresponds to the mean grow-out period for summer flounder raised in the UNCW near commercial scale field study, and the 13.4-month cycle corresponds to the top 5% of the fastest growing flounder reaching marketable size (1.5 lbs) in the UNCW study. Each commercial-scale system is defined by a set of biological, engineering, and economic parameter values. For each system, estimates of revenues, capital costs, variable costs, fixed costs, and total costs are developed per grow-out cycle and per year. Break-even price, returns to management per grow-out cycle, and returns to management per year are calculated to assess the relative financial performance of alternative systems over a 10-year planning horizon. The most cost-effective system (i.e., the system with the lowest break-even price) is a 3 x 1-acre, 27 ft diameter, steel tank, indoor (using a building) system, with a 13.4-month grow-out cycle, utilizing a fish transfer procedure, with a break-even price of $3.53 (break-even price was $4.43 for the 20-month grow-out cycle). Sensitivity analyses and Monte Carlo analyses revealed that growth rate is the most critical determinant of financial performance, followed by capital costs and fingerling costs. At the 20-month growth cycle, sensitivity analyses revealed that break-even price was most sensitive to changes in growth rates, followed by initial investment costs, fingerling costs, feed costs, and electric costs. Present value returns (cumulative) for a 10-year planning horizon for one of the 3 x 1-acre facilities using the most cost-effective facility design range from negative $50,000 to positive $300,000 for the 20-month growth cycle model, whereas present value cumulative 10-year returns for the 13.4-month growth cycle model are always positive and range from $675,000 to $1,175,000. The significant impact of growth cycle length on financial returns emphasizes the financial importance of biological research targeting improvements in summer flounder growth rates.

Additional Information

Publication
Thesis
A Thesis Submitted to the University of North Carolina at Wilmington in Partial Fulfillment Of the Requirements for the Degree of Master of Science
Language: English
Date: 2009
Keywords
Aquaculture--Economic aspects, Aquaculture stations--North Carolina--Research, Aquaculture stations--North Carolina--Wilmington, Fish hatcheries--North Carolina--Wilmington, Flatfishes--Research--North Carolina, Hatchery fishes--North Carolina--Wilmington, Paralichthys--Growth
Subjects
Aquaculture -- Economic aspects
Aquaculture stations -- North Carolina -- Wilmington
Aquaculture stations -- North Carolina -- Research
Hatchery fishes -- North Carolina -- Wilmington
Fish hatcheries -- North Carolina -- Wilmington
Paralichthys -- Growth
Flatfishes -- Research -- North Carolina