An overview of salmon trout aquaculture in Finland

Abstract

In this case study, we describe the evolution of Finnish salmon trout aquaculture; how salmon trout farming grew as a vital industry, how Finland became the world's leading producer of salmon trout, and how the opening of markets to international competition led to a decline of the industry. The focus is on the continuous interaction between the changing market situation and production decisions. The study reveals the impact of national environmental policy on the competitiveness of the industry. At the moment, the industry is undergoing major structural changes; production has moved to neighbouring countries, and the value chain is concentrated. In future, closer interaction and co‐operation between the actors along the entire fish value chain will be the key factors for success.     

Market integration between wild and farmed species in Spain

ABSTRACT

Market integration occurs when prices among different locations or related goods follow similar patterns over time. Current knowledge on market integration between aquaculture and wild-caught fish is based on a small number of species and markets. Most studies show the existence of market integration between wild and farmed conspecifics, with the clear exception of European seabass and gilthead seabream in Southern European countries. In this study, we investigate whether this lack of market integration between wild and farmed conspecifics for European seabass and gilthead seabream in Southern European countries is specific for these species or is representative for the area. Therefore, we investigate the existence of market integration in Spain between wild and farmed conspecifics for a large variety of different species: turbot (Scophthalmus maximus), sole (Solea spp.), blackspot (red) seabream (Pagellus bogaraveo), Atlantic cod (Gadus morhua), and meagre (Argyrosomus regius).     

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.     

Salmon prices in France and the UK: Does origin or market place matter?

Abstract

There have been several attempts to distinguish farmed Atlantic salmon by origin using trademarks. Whether there exist different regional markets for salmon, and in particular whether the UK market is separate from the market in continental Europe, is also an issue that has received attention. To address these questions, we investigate the relationship between Norwegian and Scottish salmon both in France and the UK, and between Scottish salmon in France and the UK. The analysis is carried out by investigating how the development of prices is related using co‐integration tests.     

From Atlantic to Pacific: Price links in the US wild and farmed salmon market

Abstract

In 1990, the US International Trade Commission stated that Atlantic and Pacific salmon species did not share a substitute relationship in any of the product forms. This result is contrary to economic demand studies that show a substitute relationship for Atlantic and Pacific salmon species. Time‐series results reported in this paper are consistent with the earlier demand studies and show evidence of an equilibrium price system that includes Atlantic, chinook and coho salmon species for the US market. For these three salmon species a substitute relationship cannot be rejected. However, we observe only weak price links across the three different species in the different US regional markets.     

The rise of fish oil: From feed to human nutritional supplement

ABSTRACT

This article tells the story of how fish oil has gone from an inferior to a premium oil product. With the growth of aquaculture, fish oil became a valuable feed component. Its value increased further as the belief in the health benefit of Omega-3 opened the market for direct human consumption through nutritional supplements. Strong demand, limited supply growth and weaker substitution between Omega-3 and Omega-6 has led to diverging trends between fish oil and vegetable oil prices, with fish oil now a premium oil product. We also investigated how the salmon aquaculture industry has responded to the challenge of rising fish oil prices. Concerted effort in nutrition and feed research is shown to have allowed a reduction in the share of fish oil in feed from around 25% in the early 2000s to around 12% today. This substitution effort has allowed salmon production to grow without using substantially more fish oil.     

Aquaculture and international trade

Abstract

In contrast to the stabilization or decline of wild fishery harvests, aquaculture's contribution to the world fish supply is steadily increasing. Aquaculture has begun to have a major influence on the trade of export‐orientated species such as salmon and shrimp. This paper reviews the role of aquaculture in international trade and the research which has been conducted to examine its influence. Despite the growing significance of aquaculture on international trade, especially for shrimp and salmon, formal analysis of the shrimp trade is sparse, only moderate for salmon, and essentially nonexistent for other species. This paper also presents specific examples of how aquaculture has played an important role in international trade. These include an examination of: (1) the influence of shrimp aquaculture and trade on the development of a shrimp futures contract; and (2) the countervailing duty and antidumping case against the Norwegian farmed salmon industry.     

Aquacultural development,institution building and research and development policy: Norwegian salmon and Arctic char farming as cases

Abstract

During the past 20 years, Norwegian salmon fanning has grown to achieve export sales of 7 billion Norwegian kroner (NOK). In the same period, Arctic char has been promoted as a lucrative farmed species. Paradoxically, despite the well‐documented advantages of Arctic char farming, this commercial activity has not prospered. Here I study the interaction between research and development and fish farming, and how this interaction affects industrial development within salmon farming and Arctic char farming, respectively. Effective communication between these systems presumes organization by some superior structure that controls the flow of industrial information to the research system, and prepares research results for industrial utility. The focus here is on: the perceptions of industrial actors of tasks for the research community; how researchers interpret and respond to these tasks; how the results are imparted to the fish‐farmers; and how the research results function in practice. I contend that adequate conditions for interaction between research and industrial activity exists for salmon farming, but not for Arctic char farming.     

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.     

Economic analysis of land based farming of salmon

Abstract

Land-based farming of salmon is emerging for a number of reasons. The demand for salmon is increasing in many parts of the world. In recent years there has been limited growth in production due to binding government regulations and environmental challenges in sea-based salmon aquaculture. This is true both for Norway (sea lice, salmon escapes) and Chile (sea lice, disease problems), the two largest producers of salmon. Growing demand and limited expansion in production have made for a very profitable industry. At the same time, there have been technological developments when it comes to land-based farming (a technology used for smolt production and species such as sole and turbot), and cost of production has changed. Currently, land-based salmon farming is in operation or in development in several countries including the USA, Denmark, and Norway. In this paper, the economics of land-based salmon farming in a Norwegian context is presented, with an emphasis on the relative competitiveness of this vis-à-vis sea-based farming. If successful, land-based farming could potentially have an important impact on the dynamics of the salmon market.     

A simulation application to improve the operational efficiency of the wholesale fish market in Taiwan

Abstract

This paper presents the applications of two simulation models developed for the Pu‐Shin wholesale fish market: the current operational model and the alternative operational model. This study analyses the possible influence on the wholesale fish system by manipulating the number of porters in the alternative operational model. Cost‐benefit analysis is conducted to compare the two models. The results suggest ways to improve the operational efficiency of the wholesale fish market in Taiwan.     

Spatial integration of freshwater fish markets in the Northern Baltic Sea area

Freshwater fish species and Baltic salmon (Salmo salar) are important to small-scale fisheries in Finland and Sweden. The formerly local markets for these species have expanded as trade has been opened up to international competition. In this study we use cointegration analysis to test the spatial integration of freshwater fish markets in Finland and between Finland and Sweden. The analysed fish species are salmon, perch (Perca fluviatilis), pikeperch (Sander lucioperca), European whitefish (Goregonus lavaretus) and pike (Exos lucius), and the data covers ex-vessel prices from 1993 or 1995 to 2004. We found that the regional prices in Finland were cointegrated. This indicates that the prices are determined on a single market in Finland. Moreover, the study suggests that Finnish and Swedish markets in Baltic salmon, whitefish, pikeperch and perch were partially integrated, while integration of pike markets could not be found. The political implication is that an essential part of the local small-scale fisheries’ operational environment is determined outside the national borders.     

Approaches for delaying sexual maturation in salmon and their possible ecological and ethical implications

ABSTRACT

The aquaculture industry is under pressure to satisfy global demand for marine foods. Atlantic salmon has been bred for more than 40 years, and substantial progress has been made within the culturing and breeding programs. The improved growth rate of Atlantic salmon has been accompanied by an earlier onset of maturation. Among the factors controlling maturation in salmon are photoperiod, temperature, and body composition. Early sexual maturation is detrimental to fish health and quality when viewed from an aquacultural viewpoint. There are several approaches for alleviating this problem: (1) traditional selection, (2) manipulation of external factors affecting puberty (e.g., light), (3) novel biotechnological methods for improving breeding methods, (4) induction of polyploidy, and (5) genetic modification controlling maturation. This article presents the ecological and ethical issues connected to these approaches and argues the importance of acknowledging and discussing such issues in order to ensure that all stakeholder concerns are considered.     

Price volatility dynamics in aquaculture fish markets

Abstract

In this paper, a time-varying student-t copula is used to capture information on price volatility dependence in the short-, medium-, and long-run horizon in the US market for frozen and fresh salmon, trout, tilapia and catfish. Using monthly data from July 1992 to March 2017, the volatility dynamics for these aquaculture species are assessed. The analysis allows indicating significant differences in the volatility relationships, depending on time-frequency. While short-run volatility has limited dependency, there is significant dependency in both the medium- and long-run, indicating that market integration is stronger in the long-run. The information is particularly important to buyers and producers utilizing the futures markets, as contracts are typically traded using a set of frequencies, and may help them manage and reduce price risk.     

Development of California Halibut,Paralichthys californicus,Culture

Abstract

In contrast to freshwater aquaculture and the culture of anadromous species such as salmon, marine fish culture is in its infancy. The small larval size of many marine species presents significant challenges to culture, however, these highly valuable fish offer considerable promise for aquaculture. A particularly attractive group for marine aquaculture is the flatfish. The California halibut, Paralichthys californicus, with a range in nature from Washington State south to Baja California Sur, Mexico is one such species.

With the goal of enhancing the fishery for this species, a hatchery program was developed over a decade ago. The hatchery at Redondo Beach, California, maintains a group of adults that routinely spawn throughout most of each year. Further development of routine culture and juvenile growout techniques ultimately aimed at commercial aquaculture was initiated last year with support from the California Sea Grant College Program.

Profitable commercial ventures culturing various flatfish species already exist in other parts of the world, but development of a flatfish culture industry in California confronts unique challenges. Two challenges in particular are the relatively high cost of energy and stringent environmental regulations. To meet these challenges, a culture system built around recirculation technology is being developed that would allow for an energy-efficient industrial-like approach to the culture of California halibut while minimizing environmental impacts.     

Environmental problems,productivity and innovations in Norwegian salmon aquaculture

Abstract

Environmental issues have been of central importance throughout the history of salmon aquacuiture in Norway. In this paper we will examine some of the issues, and show that while there are still problems, many have also been resolved. A major reason for this is the fact that salmon farmers have internalized many of the environmental effects into their decision‐making due to the relationship between environmental impact and productivity. Another reason, particularly when it comes to treatment of diseases, is that lack of private innovative activity due to different market failures has been compensated for by government‐sponsored research and development.     

Price formation of the salmon aquaculture futures market

ABSTRACT

This study examines price formation of the internationally traded salmon futures exchange. Analyzing data from 2006 to 2015, the study identifies the co-integration relationship between the spot market price and 1–6-, 9- and 12-month futures contract prices. With exception of the 12-month maturity futures price, the unbiasedness hypothesis is shown to hold, thus evidence of risk neutrality and efficiency among the co-integrated pairs. Further, it is evident that the spot price provides leadership role in the price discovery function for the 1-, 2- and 6-months futures contract. On the contrary, the 3-, 4-, 5-, 9- and 12-months futures contracts provide the expected leadership role in the price discovery function, a case that supports a matured market that can be considered a necessary price risk management tool. The mixed finding is an indication of a maturing or near matured futures market. Analysis of the term structure of futures volatilities reveal that the shorter the length of the futures contract, the more volatility there is. This is because salmon prices exhibit short-term cyclical and seasonal patterns like other agricultural commodities. As such, salmon producers will be better off hedging in far month futures contracts, ceteris paribus.     

THE RUSSIAN SEAFOOD REVOLUTION: SHIFTING CONSUMPTION TOWARDS AQUACULTURE PRODUCTS

A food consumption revolution is taking place in Russia. After decades of severe constraints on food consumption options under the communist regime Russian consumers are now adopting new food products—including seafood products – at a high pace. Since Russian consumers have previously had very limited seafood consumption choices, the market can be seen as an interesting laboratory for investigating consumer responses to products that have previously not been available. Among imported seafood products are both wild and farmed species. Furthermore, Russian imports include both traditional species such as herring, and ‘new’ species such as pangasius. We analyze market integration among seafood products using Russian monthly import prices from 2002 to 2007 on several products, such as herring, salmonids and pangasius. We find that pangasius compete in the white fish segment, and is a price leader. In the salmonids market, farmed salmon trout appears to be the price leader, both in the fresh and frozen market segment.     

Optimal harvesting of farmed Atlantic salmon at two cohort management strategies and different harvest operation restrictions

Abstract

The main harvest planning problem in commercial fish farms is to determine the best time‐sequence of harvesting different fish cohorts in order to maximize the overall farm profit. Due to both annual and fish‐size variations in market prices, future forecasts of fish growth and size distribution are required to optimize harvest plans. Two management strategies for harvesting size‐structured fish cohorts are considered. The first strategy allows the fish farmer, at any time, to size‐grade, harvest and sell the most profitable fish sizes from the standing stock. The second strategy allows the fish farmer to harvest and sell a fish batch with similar size distribution as that of the standing stock. In this paper, two size‐structured fish growth models have been built to fit the two management strategies. The growth models are integrated in a multiperiod linear programming model that optimizes the harvest outputs for each of the two management strategies. Model outputs demonstrate clearly that it is more profitable to size‐grade fish prior to harvest compared to harvesting a batch of fish with similar size distribution to that of the standing stock. Five different harvest operations constraints have been identified for commercial salmon farming. The decrease in profitability of fish farming is shown for a variety of harvest operation constraints.