Preliminary Observations on the Marketability of Saltwater-Cultured Florida Red Tilapia in Puerto Rico

A preliminary assessment of the marketability of saltwatercultured Florida red tilapia was conducted at a farm outlet store and at nine restaurants in Puerto Rico. Florida red tilapia were grown in six 0.2-ha ponds at 22.7 ± 1.2 (mean ± SE) ppt salinity by a commercial aquaculture enterprise in Dorado, northeastern Puerto Rico. Customers purchased 4,683kg of dressed-out fish (gilled, gutted and scaled) at $7.70/kg and 826kg of whole fish at $6.60/kg from a retail outlet store located at the aquaculture farm, and nine restaurants purchased 1,071kg of dressed-out fish at wholesale prices ranging from $4.96 to $5.18/kg. Farm outlet customers and restaurants preferred dressed-out fish between 454–567g and 567–580g, respectively. Prices paid per serving by restaurant customers for red tilapia ($7.00–$25.00) were similar to that paid for silk snapper Lutjanus vivanus , a popular marine food fish in Puerto Rico. Market surveys of customers at these outlets showed that 75–81% of the respondents were new consumers of red tilapia and that they rated red tilapia highly in taste, texture, freshness, and presentation and equal to or better than silk snapper. There was no effect ( P > 0.05) of age group or economic level on consumer responses. Survey participants stressed the need for product promotion, including a more markehriented name that emphasized the red color and that it was farm-raised in saltwater, to distinguish it from darkcolored, wild-caught freshwater tilapia. Local saltwater production of Florida red tilapia could help supply the market demand for fresh, marine fish in Puerto Rico if producers can meet the demand for quality, availability and price.     

Optimizing Tilapia, Oreochromis sp., Marketing Strategies in Nicaragua: A Mixed-integer Transshipment Model Analysis

Tilapia, Oreochromis sp., production has increased in the Central American region in recent years. Yet, commercial tilapia aquaculture has not developed in Nicaragua on the scale that it has in other neighboring countries. Although demand for tilapia products exists, lack of thorough understanding of domestic markets and coordinated production and marketing efforts have hampered the development of a domestic market. The objectives of this study were to quantify domestic marketing costs for tilapia produced in Nicaragua and develop a mixed-integer transshipment mathematical programming model to identify the most profitable marketing alternatives for tilapia farmers. Results suggested targeting primarily outlets with higher sales prices such as restaurants with supplemental production delivered to local supermarkets. The model chooses cities with weekly restaurant demand capable of absorbing the farm's production with excess product sold to alternative outlets. Supply of farm-raised tilapia production in most regions of Nicaragua was insufficient and created problems associated with frequent and dependable deliveries required by higher paying outlets (restaurants and supermarkets). Larger farms will generate greater returns with regular consistent deliveries to higher priced restaurant outlets. Smaller farms with limited production volumes were not able to meet weekly delivery requirements. Biannual deliveries reduced transportation cost and sales price and were not profitable. However, sustaining markets with infrequent deliveries may not be feasible. This analysis provides guidelines for targeting those specific markets that optimize returns to specific farm sizes in specific regions.     

Economic Evaluation of Commercial-Scale, Saltwater Pond Production of Florida Red Tilapia in Puerto Rico

An economic analysis was performed of a proposed commercial-scale 20-ha saltwater pond culture operation for Florida red tilapia in Dorado, northern Puerto Rico. The analysis was based on actual cost and production data from a commercial-scale hatchery, pilot-scale grow-out trials conducted in six 0.2-ha saltwater (avg. = 22.7 ppt) ponds at the Dorado facility and on wholesale market prices ($4.96–5.18/kg) fetched by dressed-out (gilled, gutted and scaled) product. The proposed 20-ha growout facility is comprised of 25 0.8-ha earthen ponds, each supplied with sea water, brackish well water, drainage and aeration, which account for 60.8% of the capital costs. Ponds are stocked with fingerlings (0.85 g avg. wt.) at a density of 3.0 fish/m² (30,000/ha), and are harvested at 160 and 220 d, at an average weight of 545 g for a total yield of 11,445 kg/ha per crop. Imported feed ($0.55/kg), processing and distribution ($0.50/kg) and sex-reversed fry ($0.11/fry) are the highest variable costs, accounting for 30.7%, 15.4% and 13.9%, respectively, of the total annual costs. Salaries and benefits, and depreciation represent the highest fixed costs, accounting for 8.4% and 5.5%, respectively, of the total annual costs. Under these conditions, a wholesale price of $4.55/kg results in a positive cash flow by year eight, and a breakeven price, internal rate of return (IRR), net present value (NPV) and discounted payback period (DPP) of $4.08/kg, 7.6%, ($235,717) and >10 yr, respectively, suggesting that the proposed 20-ha operation is not economically feasible under these conditions. The proposed enterprise is marginally feasible if stocking density is increased to 3.5 fish/m² while at 4.0 fish/m² economic outlook is favorable. Costs can be lowered considerably by targeting production and market variables most sensitive to profitability indices, using locally-prepared feeds, and vertically integrating hatchery and growout operations.     

REMAINING COMPETITIVE AT THE REGIONAL LEVEL: DEVELOPING A LOCAL AQUACULTURE INDUSTRY

Aquaculture industry development has been recognized to be an important step in improving a state's economy. However, local producers are facing significant competition from international, national, and other state producers. In this paper, the focus is on competition among local producers. The objective is to examine how interactions among industry participants determine prices and profitability of individual fish growers. The application involves the trout sector of the West Virginia aquaculture industry. Using a game theoretic framework, the Bertrand oligopoly model, and a combination of data from primary and secondary sources, price competition among producers is modeled under different supply and demand scenarios. Factors such as production volume and cost, location relative to market outlets, supply dependability, and proximity to other competitors and markets influence the profitability and competitive position of individual producers. Results also show that, as expected, the entrance of new growers results in a reduction of the sales price, and creates more favorable conditions for sales outlets. In contrast, the appearance of new sales outlets results in an expected increase in sales prices and producers' profits. Implications are derived for the West Virginia aquaculture industry and for other areas where an abundant natural resource base combined with a rapidly growing aquaculture industry are linked to a growing competition for markets and, hence, producer profitability and survival.     

A MIXED-INTEGER TRANSSHIPMENT MODEL FOR TILAPIA (OREOCHROMIS SP.) MARKETING IN HONDURAS

Tilapia production in Honduras has increased in recent years. However, lack of thorough understanding of domestic markets and coordinated production efforts have hampered the development of a domestic market. This study quantified marketing costs for tilapia marketed in Honduras and developed a mixed-integer transshipment mathematical programming model to identify the most profitable marketing alternatives for small- and medium-scale farmers. Of the total marketing costs ($0.07–$0.41/kg), 40–73% were for transportation and 13–30% for packaging costs. This depended upon farm size, location, and the specific market targeted. Model results suggested restaurants as primary targets with supplemental production delivered to supermarkets in relative proximity to the selected restaurants. The model selected cities with sufficient restaurant demand to absorb the farm's total production. Farms with high production levels can take advantage of the reduced transport cost of larger trucks and sell excess product to alternative outlets whereas small-scale farm volumes were too low to supply markets on a weekly basis. Farms located in the East and South regions had a marketing advantage over farms in other regions due to proximity to the most profitable Distrito Central outlets. To successfully compete for Honduran markets other than the low-priced local open-air markets will require farm sizes greater than 6 ha to supply a minimum weekly production of 900 kg.     

Are farmed European seabass (Dicentrarchus labrax) prices in European Union markets affected by Turkish exports of farmed European seabass?

Abstract

Often, increases in farmed seabass and seabream production surpluses from Turkey and Greece have been blamed to lead to price declines and aquaculture sector crises. In this study, we investigate whether Turkish exports of farmed European seabass affect prices of European Union (EU) farmed European seabass. This is done by examining the existence of market integration between the prices of Turkish exports of farmed European seabass into the EU and the prices of farmed European seabass commercialized in wholesale markets in Barcelona, Madrid and Paris. Market integration and competition studies in fisheries and aquaculture products have generally focused on analyzing substitutability between species and between wild and farmed conspecifics. Few studies have focused on analyzing market integration between different geographic areas. Market integration analyses between different geographic areas have proven useful in anti-dumping investigations. Results show the lack of market integration between EU imports of Turkish farmed European seabass and main EU wholesale markets; in other words, farmed European seabass prices in EU markets do not seem to be affected by export prices of Turkish farmed seabass.     

The Economics of Kappaphycus Seaweed Cultivation in Developing Countries: A Comparative Analysis of Farming Systems

The farming of the red seaweed Kappaphycus alvarezii and related species as raw material for the hydrocolloid carrageenan rapidly spread from the Philippines in the late 1960s to Indonesia, Tanzania, and other tropical countries around the world. Although numerous studies have documented positive socioeconomic impacts for seaweed farming, factors such as diseases and distance to export markets have led to an uneven development of the industry. Using standard budgeting techniques, this study adapted production and market data from a FAO-led global review of seaweed farming to develop comparative enterprise budgets for eight farming systems in six countries (Indonesia, the Philippines, Tanzania, India, Solomon Islands, and Mexico). Although the basic technology package is the same across countries, the study revealed large differences in the economic performance of systems due to wide variations in farm prices and the scale of operations. Although seaweed farming is a suitable activity for small-scale producers, a minimum of 2,000 m of cultures lines are still necessary to ensure adequate economic returns. Greater farming plots may be needed if farm prices are well below the average farm prices paid in Indonesia and the Philippines. Policy recommendations are made to improve the economic potential of underperforming systems.     

Production Economics of Nile Tilapia (Oreochromis niloticus) Pond Culture in El-Fayum Governorate,Egypt

Econometric techniques were used to estimate a production function for tilapia pond culture in El-Fayum Governorate, Egypt, utilizing cross-sectional field data. Explanatory variables were feed, initial stocking weight, and pond size. The function was used to examine returns to scale, estimate the productivity of feed and initial stocking weight, and estimate the profit maximizing demand equations for feed and fingerlings. Diminishing returns to scale seem to exist for tilapia pond culture. Optimal economic stocking and feeding rates, yield, and profits for the whole sample were estimated at prevailing prices. Results indicated that producers were using stocking rates greater than the optimal by 36% to 115% and using insufficient feed by 8% to 22%. Investigation of the effects of changes in tilapia selling price and feed price on optimal stocking and feeding rates, yield, and profits showed that a change in tilapia selling price has greater effect on profits, yield, stocking, and feeding rates than a proportional change in feed price. Profits, feeding, and stocking rates are more sensitive than yield to changes in selling price, while feeding rate is more sensitive than stocking rate, yield, and profits to changes in feed price.     

The potential impact of summer flounder (Paralichthys dentatus) aquaculture on regional flounder price

Abstract

Increasing consumer demand for flounder and dramatic reductions in ocean flounder harvests have raised interest in summer flounder (Paralichthys dentatus) aquaculture. Flounder farmers have several potential markets, including regional seafood dealers and high‐end niche (e.g., sashimi and ike‐jime) buyers. Prices paid by buyers are exogenous to typical aquacultural budgeting models, yet they are a key determinant of potential profitability. We develop a simple economic model to assess the impacts of aquaculture industry supply on prices paid by regional seafood dealers. The model is parameterized for a region with established flounder dealers and active field research in flounder production methods. We derive the price elasticity of regional seafood dealer demand for farmed flounder, and we examine the impacts of changes in production cost and ocean harvest on regional price and the level of aquacultural production that maximizes returns to the aquaculture industry.     

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.     

The spot-forward relationship in the Atlantic salmon market

This study examines the Fish Pool salmon futures contract with respect to how well the market performs in terms of the futures price being an unbiased estimator of the spot price and whether the market provides a price discovery function. Using data for 2006–2014 and with futures prices with maturities up to 6 months we find that spot and lagged futures prices are cointegrated and that the futures price provides an unbiased estimate of the spot price. We also find that, with the exception of the front month, that the causality is one-directional. The spot prices lead futures prices between 1–6 months maturity. Hence, while the spot and lagged futures prices are unbiased estimates, we do not find support for the hypothesis that futures prices provide a price discovery function. Rather, it seems that innovations in the spot price influence futures prices. This finding is not uncommon in new and immature futures contracts markets. Hence, the salmon futures market is still immature and has not yet reached the stage where futures prices are able to predict future spot prices.     

An Analysis of Biological, Economic, and Engineering Factors Affecting the Cost of Fish Production in Recirculating Aquaculture Systems

Aquaculture production in recirculating systems has been the focus of research and development efforts for decades. Although considerable resources have been expended on these systems in the private sector, there is a scarcity of data on the economic or engineering performance of commercial scale recirculating production systems. This paper presents the results of a computer simulation of tilapia production in a small recirculating production system. Much of the performance data has been developed at a demonstration facility at North Carolina State University. Given the assumptions of the base case simulation, the cost of producing a kilogram of tilapia in the recirculating system described is estimated to be $2.79 ($1.27/lb). The results of a model sensitivity analysis indicate that while improvements in the performance efficiency of system components did not greatly affect fish production costs, reductions in feed costs and improvements in the feed conversion ratio caused the greatest reduction of production cost of all of the operational variables investigated. The analysis further indicates that the greatest gains to be realized in improving profitability are those associated with increasing the productive capacity or decreasing the investment cost of a recirculating fish production system.     

IMPACTS OF INTRODUCED AQUACULTURE SPECIES ON MARKETS FOR NATIVE MARINE AQUACULTURE PRODUCTS: THE CASE OF EDIBLE OYSTERS IN AUSTRALIA

Economic competition between introduced and native aquaculture species is of interest for industry stakeholders since increased production can affect price formation if both aquaculture species are part of the same market or even substitutes. In this study, we focus on the Australian edible oyster industry, which is dominated by two major species—the native Sydney rock oyster (grown mainly in Queensland and New South Wales) and the non-native Pacific oyster (grown mainly in South Australia and Tasmania). We examine the integration of the Australian oyster market to determine if there exists a single or several markets. Short- and long-run own, cross-price and income flexibilities of demand are estimated for both species using an inverse demand system of equations. The results suggest that the markets for the two species are integrated. We found evidence that the development of the Pacific oyster industry has had an adverse impact on Sydney rock oyster prices. However, our results show that both species are not perfect substitutes. Demand for Sydney rock oysters is relatively inelastic in the long run, yet no long-run relationships can be identified for Pacific oysters, reflecting the developing nature of this sector.     

Comparative Performance of Four Strains of Nile Tilapia (Oreochromis niloticus) in Brackish Water Ponds in Indonesia

Four selectively bred strains of Nile tilapia (Oreochromis niloticus) were evaluated for production in brackish water ponds in Indonesia. Survival to 124 days was relatively low for all four strains (39%–48%), and growth during the later stages of the trial was poor (SGR < 1.5 %/day) due to water quality deterioration in the pond. Although the ‘Red’ tilapia strain demonstrated the best production parameters, red-colored tilapia bring lower prices in both our test markets (South Sulawesi and Aceh provinces). Of the four strains, the genetically enhanced supermale Indonesian tilapia?×?genetic improvement of farmed tilapia (GESIT×GIFT) cross provided the best economic return.     

COVID-19 impacts on the Bangladesh shrimp industry: A sequential survey-based case study from southwestern Bangladesh

Shrimp farming is fundamental to the national economy of Bangladesh, particularly through earning foreign currency. The nationwide lockdown and international cargo restriction jeopardized the sector and breaking its marketing chain. Assessing the degree of farming socio-economic peril from COVID-19 and suggesting early coping strategies and long-term mitigation measures are pressing to build resilience for this food production sector. To collect survey data, two key-informant face-to-face surveys with 51 shrimp farmers and 62 consumers in southwest Bangladesh were accomplished. As national lockdowns restricted access to export markets and movements within the country, farm incomes decreased against rising production costs. To compensate, farmers reduced their workforce (29.4%), but even with the sale of co-cultured finfish still suffered from large drops in revenue (42.8% average profit reduction). Furthermore, we present evidence that shrimp farmers should consider diversification of aquaculture product type as co-culture of additional shrimp species was a poor mitigation strategy against large market price fluctuations. Product price reductions were passed on to the consumer, who enjoyed falling product prices including more expensive shrimp products, but the markup for nearly all aquaculture products increased. The current jeopardy and consequences of shrimp farming future are discussed, including coping strategies to help policymakers in building resilience against future uncertainties.

     

TESTING FOR MARKET INTEGRATION AND THE LAW OF ONE PRICE IN WORLD SHRIMP MARKETS

Using import price data from Japan, United States, and the European Union, shrimp price movements in these markets were evaluated to test if it denotes an integrated world market for shrimp. Cointegration techniques were utilized to investigate if prices in these markets share a common stochastic trend and if the law of one price holds. Results indicated a strong link amongst Japanese, American, and European markets. The results on the aggregated shrimp markets were checked against the results at a more disaggregated level. Data from wholesale markets in Tokyo, New York, and Europe for specific shrimp products confirm the integrated nature of shrimp markets. Evidence also supports the law of one price in shrimp markets.     

Price integration in the farmed and wild fish markets in Uganda

This paper looks at price integration in the aquaculture and wild-harvested African catfish market channels in Uganda. The issue of integration between the two market channels is important because African catfish has become an important traded species in Uganda with exports to regional markets rising even faster than production, yet limited research has been undertaken to understand price formation in the supply chain. The analysis draws on monthly price data from January 2006 to August 2013, and applies threshold autoregressive approaches to test for the existence of a long-run relationship and price asymmetry and to determine the time path needed for shocks to be transmitted from one market channel to the other. The results show that, over the studied period prices in both market channels are linked in the long-run, implying that farm-raised catfish forms part of the same market as wild-harvested catfish in the country. The findings have strong implications for aquaculture producers and artisanal fishers as they can serve as a basis for more efficient farm management and marketing decisions.     

Price interactions between wild and farmed products: Turkish sea bass and sea bream markets

We investigate empirically market interactions in the Turkish wild and farmed sea bass and sea bream markets. For gilthead sea bream and European sea bass, we conduct a Granger causality test between the prices of the wild and farmed products, based on the estimation of a vector autoregressive model. Our data set consists of annual fish prices from 1996 to 2016. Our empirical results show that the wild and farmed sea bass are neither substitutes nor complements: the markets for each product are independent. However, in the case of sea bream, the price variations for farmed sea bream have a causal impact on the price of wild sea bream. Moreover, the price of wild sea bream Granger-causes the price variation of farmed sea bream. Thus, the wild and farmed sea bream markets are integrated.     

United States of America Trade in Ornamental Fish

Ornamental fish production is among the leading cash crops of the United States of America aquaculture economy, and retail value of the fish trade is worth approximately US$l,000 million. However, few studies exist to document this trade. Using import and export documents we report trends in total values for the U.S. trade in ornamental fish. Also, we determined the number and value of the most commonly imported ornamental fish. In 1992, approximately 201 million fish valued at $44.7 million were imported into the U.S. The port of Los Angeles handled 39% of all trade activity, Miami 22%, New York 16%, Tampa 6%, and Honolulu 6%. Freshwater fish accounted for approximately 96% of the total volume and 80% of the value of the imports. Most freshwater ornamental fish were farm-raised and imported from Southeast Asia. Most U.S. exports of ornamental fish were cultured in the state of Florida. Although saltwater fish had a high market value (20% of the declared value of the imports), the volume of these fish was only 4%. Most imported and exported saltwater ornamental fish were collected from the wild. Of the 1,539 species declared as ornamental fish, 32 species dominated the trade. These were all of freshwater origin. The guppy Poecilia reticulala and neon tetra Paracheirodon innesi were the most popular ornamental fish kept in U.S. households. The average prices paid for imported ornamental freshwater fish were 45 cents for egg layers and 22 cents for live bearers. The results of this study document the importance of the ornamental fish industry and identifies the most valuable species in the trade for potential domestic culture and protection in the wild.     

The Effect of Hybrid Catfish Fingerling Prices on the Relative Profitability of Hybrid Channel Catfish

Previous studies have indicated that the price premium charged for hybrid catfish fingerlings may be a significant factor in the adoption and profitability of hybrid catfish production. An enterprise budgeting simulation analysis was developed to compare costs, risk, and effect of hybrid fingerling costs. Feed, fingerling, and total costs ($/ha and $/kg) were highest for hybrid catfish production, intermediate for NWAC‐103, and lowest for normal channel catfish production. Net returns were highest for hybrid catfish production, but breakeven prices were also highest. Risk analysis showed that downside risk (risk of losing money) was higher for hybrid production for all farm sizes. Risk‐averse farmers would not select hybrid catfish at the mean fingerling values used in the analysis. However, at hybrid fingerling prices less than $0.0081/cm, hybrid catfish production was superior in profitability and breakeven cost of production. Thus, for hybrid catfish production to be preferred economically to normal channel catfish, the price premium for hybrid catfish fingerlings can be no more than 84% ($0.0037/cm) above that of normal channel catfish fingerlings and 57% ($0.0025/cm) above that of NWAC‐103 fingerling prices.