DEMAND FOR AQUACULTURE PRODUCTS IN TAIWAN: AN APPLICATION OF THE GENERALIZED MODEL

ABSTRACT

Policy decisions on what aquaculture products to develop require information on consumer demand for cultured species. However, information on the structure of demand for aquaculture products is limited and what few studies there are in Taiwan, where aquaculture is a major industry, suffer from methodological problems. To clear up some of these problems, we used modified nonnested testing techniques and performance forecasting to determine which generalized models could best estimate the demand for Taiwanese aquaculture products. The results of modified nonnested testing of the aquaculture demand system showed that prices predetermined and quantities predetermined could be used to estimate demand. The generalized ordinary demand model was able to better forecast performance than the generalized inverse demand model. We used the likelihood ratio test to discriminate among the four competing models for the generalized ordinary model; the AIDS model could be more suitably applied to the data. A more general model that is able to incorporate different dynamic structures (partial adjustment, first autoregressive, and static). This general framework is applied to the AIDS model. The first autoregressive AIDS model we used to calculate the own and cross-price elasticities for milkfish, tilapia, shrimp, shellfish, and carps found that price elasticities varied across fish type, that some products had high long-run own price elasticities, and that the demand for aquaculture products was largely determined by inertia.     

Costs and Risk of Catfish Split‐pond Systems

Split ponds are recently developed pond‐based aquaculture systems that allow intensification of catfish aquaculture. Successful industry‐wide adoption of newly developing technologies like split‐pond systems will depend upon their productivity and cost efficiencies. Costs and production performance of the following three split‐pond design scenarios were monitored in Arkansas and Mississippi: (1) research design developed at the Thad Cochran National Warmwater Aquaculture Center, Stoneville, Mississippi; (2) waterwheel design tested on commercial catfish ponds; and (3) screw‐pump design tested on commercial catfish ponds. An economic engineering approach using standard enterprise budget analysis was used to develop estimates of breakeven prices (BEPs) ($/kg) for producing foodsize hybrid catfish (♂Ictalurus furcatus × ♀Ictalurus punctatus) for each scenario. Estimates of BEPs of hybrid catfish raised in split ponds ranged from $1.72 to $2.05/kg. The cost of catfish production in split ponds was sensitive to yield, fish prices, and feed prices. Annual net cash flows from both commercial split‐pond systems were high and sufficient to make the investment profitable in the long run. Feed price, feed conversion ratio, and yield contributed the most to downside risk of split ponds.     

Forecasting monthly catfish (Ictalurus punctatus.) pond bank and feed prices

Volatility in catfish pond bank and feed prices lead to profit uncertainty in the catfish industry. Analysis of the factors that affect those prices and development of a forecasting model would provide guidance to catfish farm managers. Error-correction models (ECM) based on cointegrating relationships among variables were specified following development of a single-equation ARIMAX model. Factors identified as those that influence catfish price were: lagged value of catfish, feed and substitute product prices, while those that influenced feed price were: lagged value of feed, corn and soybean prices. ECM estimates implied that fish price adjusts approximately 6% and feed price 22% to the long-run equilibrium in 1?month. The analysis showed that it takes less than 17?months and 5?months to correct for long-run disequilibrium for catfish and feed prices, respectively. The ARIMAX model demonstrated a better fit for both in-sample and out-of-sample forecasting for catfish price and had better out-of-sample predictive ability for feed prices.     

The evolution of farm management,production efficiencies,and current challenges to catfish production in the United States

Abstract

The catfish industry is the most successful aquaculture business in the US. The development and growth of the catfish industry has resulted in complex fish farm businesses that require intensive management. Technological innovations have resulted in increased yields (land use efficiency). However, in more recent years, productivity gains have not kept pace with the rate of increase in input costs. Increasing intensification of catfish production over time has been accompanied by increased use of debt capital that results in higher levels of financial risk. While still a profitable activity, real profit margins have declined as financial risk has increased. New technologies will likely continue to increase productivity over time. Market‐oriented agribusiness approaches to catfish marketing are likely to become the norm. The challenge for the catfish industry is to coordinate adoption of new higher‐cost technologies with demand increasing market development to sustain farm price levels.     

Price cointegration in spatial markets: An application to milkfish markets in Taiwan

Abstract

The objectives of this study are to analyze the interdependent behavior of lead‐lag milkfish price adjustments between vertically‐related markets (from production to consumption) as well as between five major horizontally‐related wholesale markets. Empirical results show that there is a two‐way lead‐lag cointegrating price relationship between milkfish wholesale and retail markets. Since the fish wholesale market cannot completely and quickly assimilate the retail market information, the speed of response of wholesale prices to retail price changes is relatively slow, inducing low pricing efficiency. The Taipei wholesale market appears to cause the greatest leadership impact on the milkfish price formation compared to other wholesale markets in both the long‐run and short‐run. The results also reveal that there is a high degree of integration relationship between the horizontally integrated wholesale markets (Chiayi, Changhwa and Taichung) for milkfish in the southwestern region within a short distance.     

Economic analysis of alternative protein levels in channel catfish feeds

Abstract

Nutritional requirements for catfish (Ictalurus punctatus) feeds based solely on maximizing growth may not lead to the best economic performance. In addition, the choice of protein level may have important implications for dress‐out percentages in the processing sector. Processors may be able to send pricing signals to farmers to improve processing efficiencies. The objectives of this paper are to quantify the economic incentives to use different protein levels in catfish feeds and to investigate the possibility of processor incentives to affect these decisions. Data from research ponds, in conjunction with pricing and cost data, were used to quantify the changes in net returns associated with alternative protein levels. Both experimental results and estimates using commercial practices were developed. In addition these data were utilized in developing price premiums that might be implemented by the processing sector to provide incentives that would result in higher dress‐out percentages and thus greater processing efficiency. In a restricted‐feeding regime, selection of the higher protein feeds resulted in higher net returns, however, in a satiation‐feeding regime, lower protein levels resulted in higher net returns. Specifically, catfish enterprise profitability could be enhanced by feeding a 38% protein ration when fish are fed on a restricted basis whereas, in a satiation‐feeding regime profitability could be enhanced by feeding a 26% protein ration. Results indicate that the potential for a price premium policy that encourages a higher dress‐out percentage might be adopted in the future by the’ catfish processing sector as has been done in other meat processing industries.     

An Econometric Estimation of Market Growth for the U.S. Processed Catfish Industry

Inadequate information pertaining to the growth potential of the US. processed catfish industry has been a major factor leading to cyclical periods of excess supply or demand resulting in misal-location of resources and price instability. Better information for industry planners (e.g., producers, processors, government regulatory agencies, and university researchers) on future sales potential would assist in decreasing the misuse of resources. An econometric model of wholesale demand for US. processed catfish was developed to provide estimates of future sales under various scenarios. In addition to the standard variables included in models of demand for food items—price, income, and population—the effects of product life cycle and industry-sponsored generic advertising are quantitatively incorporated. Seasonality of demand and rigidities in marketing and consumer behavior are additional considerations explicitly modeled via monthly dummy variables and a Ner-lovian partial adjustment mechanism, respectively.
Model results indicate the impact of alternative future price scenarios on wholesale processed caffish sales. At the mean real wholesale price of $1.60 (December 1988 dollars) for whole-dressed caffish and a real generic advertising expenditure of one million dollars postulated for 1995, projected aggregate sales are 219.2 million pounds, a 23% increase over 1989 sales. Projected 1995 wholesale sales are very sensitive to price with alternative price postulations of $1.40 and $1.80 resulting in projected sales of 252.3 and 193.6 million processed pounds, respectively. An estimated 7% average increase in wholesale sales of catfish was attributed to the industry-sponsored generic advertising campaign. Model projection estimates and impacts are posed as a quantitative source of information to be used with other information in resource allocation issues faced by industry decision makers.     

Analysis of Catfish Pricing and Market Dynamics: The Role of Imported Catfish

The producer price of catfish is becoming relatively unstable compared to the trend in previous years, necessitating the need for a complete analysis of catfish pricing and market dynamics. An understanding of the price determination mechanisms in the catfish market and the relationships between producer price, domestic processed price, and import price are important because price variability can result in significant financial losses to the domestic catfish industry. This study used a cointegration procedure to examine the long-run relationships between domestic prices of catfish and imported price. Results from unit root and cointegration tests suggest that there is a long-run equilibrium relationship between pairs of these prices. Results from Granger causality tests and error-correction model estimations suggest that the market for domestic frozen fillets plays a significant role in the price determination of imported catfish. A similar relationship is found between producer price and frozen fillet price. Some significant measures that were estimated include a frozen fillet-producer long-run price transmission elasticity of 0.162, a frozen fillet-imported fillet long-run price transmission elasticity of 3.56, and a producer-frozen fillet short-run price transmission elasticity of 0.322. High levels of fillet prices appear to have influenced the level of catfish imports. As long as distributors and restauranteurs do not see a basis for paying a premium for U.S. catfish products, they will continue to purchase the lower-priced imported catfish and consequently imports will continue to increase.     

An econometric estimation of Japanese shrimp supply and demand during the 1990s

Abstract

A simultaneous‐equation model of the supply and demand of shrimp in Japan is constructed, and sensitivity analyses are conducted to measure the effects of changing exchange rates and the stock holdings of shrimp. Using monthly statistics from January 1990 to December 1997, the Japanese own‐price elasticity of supply is found to be inelastic and has a less important effect than the beginning stocks factor. The Japanese demand for shrimp is also found to be price‐and income‐inelastic. The beginning of stock holdings is more sensitive to Japanese shrimp demand than the import price and income. The result of seasonality analyses shows that Japanese shrimp demand also depends on cultural factors.     

Assessment of a channel catfish population in a large open river system

Estimates of dynamic rate functions for riverine channel catfish, Ictalurus punctatus (Rafinesque), populations are limited. The open nature and inherent difficulty in sampling riverine environments and the propensity for dispersal of channel catfish impede estimation of population variables. However, contemporary population models (i.e. robust design models) can incorporate the open nature of these systems. The purpose of this study was to determine channel catfish population abundance, survival and size structure and to characterise growth in the lower Platte River, Nebraska, USA. Annual survival estimates of adult channel catfish were 13%–49%, and channel catfish abundance estimates ranged from 8,281 to 24,261 fish within a 10‐km sampling reach. Channel catfish were predominantly (90%) <age 5 and <400 mm total length, and adult growth was similar to other populations across the species’ range. The channel catfish population characteristics in the lower Platte River are likely a result of a combination of factors including recreational harvest and potential shifts in habitat during different life stages. A multifaceted sampling and analytical approach provided additional information such as movement and abundance estimates and may also help to decipher abiotic and biotic factors that interact when managing fish populations in riverine environments.     

DEMAND FOR FISH IN THE PHILIPPINES: A DISAGGREGATED ANALYSIS

ABSTRACT

This paper sought to establish the fish consumption pattern of Filipino households and estimate the price and income elasticities of fish demand by species, as well as by income groups, i.e., low, middle, and high income. The study used the countrywide Family Income and Expenditure Survey (FIES) for year 2000 of the National Statistics Office, which includes over 39,000 households. A three-stage budgeting framework was used in the analysis, which estimated food and fish expenditure functions in the first and second stages, respectively. In the third stage, a system of demand equations for fish by species was estimated using a quadratic almost ideal demand system (QUAIDS) model. Parameter estimates of the model were corrected through the Heckman procedure to remove the possible bias brought about by zero consumption of certain fish species resulting from nonpreference or infrequent purchases. Results showed that estimated price and income elasticities of demand varied substantially across fish type and across income groups. All 11 fish types included in the study were found to have positive income elasticity for all income levels. Hence, fish in general can be considered normal goods, including processed fish. However, the high-priced fish types generated elasticity values greater than one, which rendered them as luxury food fish. Own-price elasticity, on the other hand, was found to be elastic in most species with values increasing as consumers climbed up the income ladder. This observation, however, was not true in the case of milkfish and tilapia (two most popular species in the country) where price responsiveness of demand was found to be higher among the lower-income groups.     

Testing for market power in the UK salmon retail sector

Abstract

This paper presents an investigation into the structure of the salmon retail market in the UK. Evidence of the potential for market power is analysed using non‐linear three‐stage least squares to estimate a dynamic error correction model (ECM) following Bresnahan (1982) and Lau (1982) theoretical approaches. Results indicate that the system is well represented by the model and that the market is competitive in both the short and long run. This is the first study using this approach for the UK fish market and our conclusions support findings from previous empirical analyses of the food retail market, albeit using a different methodology.     

A LATENT CLASS MODEL FOR ANALYZING PREFERENCES FOR CATFISH

ABSTRACT

Using a latent class model of structural heterogeneity in the multinomial logit framework, this study examined catfish preferences of Arkansas restaurateurs from stated choice data. The results suggest two latent classes of restaurateurs that are fairly distinct and have some degree of overlap. Managers in both classes are sensitive to prices and prefer catfish products that have mild flavor and soft texture. When preference for dryness, flavor and texture are assumed equal for both classes, one class becomes very sensitive to price but unconcerned with color while the other class becomes insensitive to price but very concerned with color.     

Economic analysis of overwinter feeding regimens for channel catfish (Ictalurus punctatus)

Abstract

Overwintering is a major source of uncertainty for US catfish farmers, particularly decisions on feeding. To address this issue, economic analysis was undertaken using results from pond experiments. Three overwintering strategies (full‐feed, partial‐feed, and no‐feed) for two year classes of catfish were compared. Year 1 fin‐gerlings were 22 g and year 2 fish were 420 g at stocking. Winter feeding was based on temperature and body weight percentages; (1) full‐feeding followed the regime during the November to April period; (2) partial‐fed treatments followed the temperature/body weight regimen only during the months of November, March and April, with no feeding during the coldest months of December to February; and (3) no‐feeding treatments received no feed during the overwinter period. Cost and returns were estimated for each alternative and each alternative was assessed using: (1) overwinter period experimental results, (2) overwinter period experimental results extended through the grow‐out period, (3) overwinter period experimental results extended to minimally acceptable fish sizes, and (4) adjusted estimates to reflect commercial‐scale practices. Sensitivity analyses on feed conversion ratios, stocking rates and fish selling prices were also conducted on commercial‐scale enterprises. Results consistently showed partial‐fed overwinter practices to be most profitable. Secondly, year 1 fish always had higher returns than year 2 fish due largely to the additional overwintering period and associated variable and fixed costs incurred by the year 2 fish production practices. The data upon which this analysis was based do not include the possibility of having a harvest‐sized fish going into the winter period.     

Economic Impact of Double‐Crested Cormorant,Phalacrocorax auritus,Depredation on Channel Catfish,Ictalurus punctatus,Aquaculture in Mississippi,USA

The Yazoo River Basin of Mississippi, USA, supports the largest concentration of hectares devoted to channel catfish, Ictalurus punctatus, aquaculture production in North America. The Yazoo Basin also supports large numbers of resident, wintering and migrating fish‐eating birds, with the Double‐crested Cormorant, Phalacrocorax auritus, implicated as the most serious depredating species. We used data from aerial surveys of numbers and distribution of cormorants in the Yazoo Basin and on commercial catfish ponds during winters (November–April) 2000–2001 and 2003–2004 to refine estimates of regional economic losses due to cormorant depredation. In both periods, the greatest monthly estimates of cormorant foraging occurred from 1 January to 31 March. Losses in terms of biomass, number, and dollar value were greater for foodfish ponds than fingerling ponds. Monthly weighted estimates of catfish consumed were 1775.3 and 1346.6 m.t. over winters 2000–2001 and 2003–2004, respectively. Total estimated losses for foodfish and fingerling ponds in 2000–2001 were $11.56 and $0.48 million, respectively, and in 2003–2004 were $5.22 and $0.40 million, respectively. Maximum dollar loss occurred during March in 2000–2001 and during February in 2003–2004. In this study, the volatility in variable production costs and nominal sales price, and distribution of cormorants on pond types and regionally were key factors in resulting economic loss estimates.     

Competition between farmed and wild fish: The French sea bass and sea bream markets

ABSTRACT

Aquaculture is contributing at an increasing rate to the world seafood supply. The interaction between fisheries and aquaculture is especially important for the seafood market where supply of wild and farmed fish can affect price dynamics. We examine market interactions in the French fresh sea bass and sea bream markets. We test for long-term price parity between farmed and wild products for these two species, applying a bivariate cointegration approach to market delineation. We also conduct the Law of One Price (LOP) test between price series. Our data base consists of monthly domestic price series for fish purchased by French households from 2007 to 2012. Our empirical results show that the fresh fish markets for whole wild and farmed sea bream are partially integrated, yet those for whole wild and farmed sea bass are not integrated. The substantially higher price for wild sea bass relative to farmed sea bass suggests that consumers may be more sensitive to seafood production processes when it comes to higher-value species.     

Simulation modelling of high‐throughput cryopreservation of aquatic germplasm: a case study of blue catfish sperm processing

Emerging commercial‐level technology for aquatic sperm cryopreservation has not been modelled by computer simulation. Commercially available software (ARENA, Rockwell Automation, Inc. Milwaukee, WI) was applied to simulate high‐throughput sperm cryopreservation of blue catfish (Ictalurus furcatus) based on existing processing capabilities. The goal was to develop a simulation model suitable for production planning and decision making. The objectives were to: (1) predict the maximum output for 8‐h workday; (2) analyse the bottlenecks within the process, and (3) estimate operational costs when run for daily maximum output. High‐throughput cryopreservation was divided into six major steps modelled with time, resources, and logic structures. The modelled production line processed 18 fish and produced 1164 ± 33 (mean ± SD) 0.5‐mL straws containing one billion cryopreserved sperm. Two such production lines could support all hybrid catfish production in the United States and 15 such lines could support the entire channel catfish industry if it were to adopt artificial spawning techniques. Evaluations were made to improve efficiency, such as increasing scale, optimizing resources, and eliminating underutilized equipment. This model can serve as a template for other aquatic species and assist decision making in industrial application of aquatic germplasm in aquaculture, stock enhancement, conservation and biomedical model fish.     

Effect of Time of Feeding on Growth of Channel Catfish1

Channel catfish fingerlings were stocked into 16 0.04-ha ponds at a rate of 24,700 fish/ha on 5 May 1992. Four replicate ponds were used for each of the following treatments: 1) fed once daily at 0830h; 2) fed once daily at 1600h; 3) fed once daily at 2000h; and 4) fed on demand using demand feeders. Fish on the first three treatments were fed to satiation. All fish were harvested 145d after stocking. Results from this study showed that when channel catfish raised in ponds were fed once daily to satiation, time of feeding had no significant impact on water quality, feed consumption, feed conversion, weight gain, or body proximate composition. Fish fed on demand consumed more feed than fish fed once daily to satiation, but difference in weight gain was not significant. These data indicated that feeding time may not be critical for channel catfish production as long as fish are fed when dissolved oxygen is sufficient. Although feeding at night was not detrimental in this study, night feeding is not recommended on large ponds unless sufficient aeration is available to quickly provide oxygen in an emergency—and even then it would be problematic.     

Development of an indirect enzyme-linked immunoabsorbent assay using a monoclonal antibody to identify Ictalurus sp. fillets

The deceptive marketing of imported basa, Pangasius bocourti (Sauvage), fillets as catfish has resulted in serious economic losses to the channel catfish, Ictalurus punctatus (Rafinesque), industry in the US. The similar appearance of channel catfish and basa fillets created a need for a rapid method to differentiate uncooked, cooked and/or marinated channel catfish fillets from basa fillets and other fish products. A monoclonal antibody (MAb) specific for a 36.8 kDa channel catfish fillet protein was produced and characterized by an indirect enzyme‐linked immunoabsorbent assay (ELISA) and Western blotting. This MAb was used to develop an indirect ELISA specific for a fillet protein unique to fish of the genus Ictalurus. Using this ELISA, 100% of raw and cooked channel catfish fillets were correctly identified and differentiated from other fish in a single‐blind study. These results show that the indirect ELISA using MAbs specific for unique Ictalurus sp. fillet proteins is a rapid and sensitive method for the identification of raw and cooked catfish fillets.     

Scanning Electron Microscopy of “Saddleback” Lesions Associated with Experimental Infections of Flavobacterium columnare in Channel Catfish,Ictalurus punctatus (Siluriformes: Ictaluridae), and Zebrafish,Danio rerio (Cypriniformes: Cyprinidae)

Laboratory‐reared, specific pathogen‐free fingerling channel catfish, Ictalurus punctatus, and adult zebrafish, Danio rerio, were each separately exposed by immersion challenge to the etiological agent of “columnaris disease,”Flavobacterium columnare (Japanese Collection of Microorganisms 21327 strain). At 24‐h post‐immersion, fish exhibiting a “saddleback” lesion were fixed whole in 10% neutral buffered formalin. Skin samples approximately 5 mm² were excised from both the margin and center of each saddleback lesion as well as from corresponding sites in control, non‐challenged, fish before being prepared routinely for scanning electron microscopy (SEM). Skin samples from control channel catfish and zebrafish had uniform, contiguous epidermal cells with continuous or closely apposed cell margins and well‐defined microridges. Channel catfish skin lesion samples had margins typified by epidermal sloughing and lesion centers that exhibited a multitude of rod‐shaped bacterial cells, approximately 3–10 µm long × 0.3–0.5 µm wide, intermingled with cellular debris across a surface characterized by denuded, strongly ridged, or folded dermal connective tissue. Zebrafish skin lesion samples had a multitude of rod‐shaped bacterial cells and exhibited comparable ultrastructural changes but some lacked scales. These findings are the first published SEM observations of columnaris disease and saddleback lesions in channel catfish and zebrafish and thereby advance our understanding of the ultrastructural characteristics of acute‐stage saddleback lesions and columnaris disease pathogenesis.