Economics of alternative catfish production technologies

Authors: KUMAR, GANESH - Mississippi State University; ENGLE, CAROLE - Engle-Stone Aquatics, Llc; HANSON, TERRY - Auburn University; Tucker, Craig; BROWN, TRAVIS - Brunswick Community College; BOTT, LISA - Auburn University; ROY, LUKE - Auburn University; Torrans, Eugene; BOYD, CLAUDE - Auburn University; RECSETAR, MATTHEW - University Of Arizona; PARK, JEONGHWAN - Pukyong National University

Submitted to: Journal of the World Aquaculture Society
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 6/27/2018
Publication Date: 12/1/2018
Citation: Kumar, G., Engle, C., Hanson, T., Tucker, C.S., Brown, T., Bott, L., Roy, L., Torrans, E.L., Boyd, C., Recsetar, M., Park, J. 2018. Economics of alternative catfish production technologies. Journal of the World Aquaculture Society. 49:1039-1057.

Interpretive Summary: New pond-based production technologies are being adopted by ictalurid catfish farmers in the United States as a means of increasing productivity. Although these new systems can increase production 2- or 3-fold compared to that achieved in large traditional ponds, a systematic comparison of the economics of production has not been conducted. This study provides an economic comparison of split ponds, intensively aerated ponds and in-pond raceways under a uniform set of economic assumptions and based on data collected from commercial catfish farms. Intensively aerated ponds and split-pond systems for catfish production have potential to enhance productivity, reduce production costs, and were found to be profitable in the short and long runs. However, the prototype of the in-pond raceway system analyzed in this study was not profitable due primarily to high investment costs resulting in high annual fixed costs that resulted in breakeven prices (cost of production in dollars per weight of fish produced greater than market prices. Given their potential to dramatically improve production, future research on these systems should focus on key areas of input management, loading rates, and oxygen dynamics.

Technical Abstract: The U.S. catfish industry has shown increasing trends towards intensification of production as a means of achieving cost efficiencies on farms. Previous studies depicted the potential for cost efficiencies in alternative technologies such as split-pond systems, intensively aerated ponds and in-pond raceway systems. This study provides an economic comparison of these systems under a uniform set of economic assumptions using standard enterprise budget analysis. Cost of production of hybrid catfish raised in these systems ranged from $2.03 to $2.91/kg, the highest cost being that of in-pond raceways and the lowest from split ponds. Positive annual net cash flows from split-pond systems and intensively aerated ponds were sufficient to make the investment profitable. Cumulative effects of high investment cost (high annual fixed costs), poor survival, and lower yields from the in-pond raceway systems made it economically infeasible. However, the feed conversion ratio (FCR) was the best among these technologies. Risk analysis showed stochastic dominance of intensively aerated ponds and split-pond systems over in-pond raceway systems. Variations in catfish price, yield, and FCR were the major contributors to economic risk. Implementing combinations of intensively aerated ponds and split-pond systems should be viewed as a strategy to respond to production and market needs.