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27896331-How-to-Produce-20-Million-Worth-of-Fish-Ocean-Fish-Farming-vs-Recirculating-Aquaculture-Systems.pdf

27896331-How-to-Produce-20-Million-Worth-of-Fish-Ocean-Fish-Farming-vs-Recirculating-Aquaculture-Systems.pdf

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Published by Ralph R. Zerbonia
Comparison of ocean farming vs. aquaculture recirculating systems
Comparison of ocean farming vs. aquaculture recirculating systems

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Published by: Ralph R. Zerbonia on Mar 08, 2013
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12/27/2013

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How to Produce $20 Million Worth of Fish
Ocean Fish Farming vs. Recirculating Aquaculture Systems
Some industry analysts have suggested that offshore, oropen-ocean aquaculture (also called ocean sh farm-ing) could help the United States increase its domesticsh supply and become less reliant on imported seafood.A second type of sh farming, recirculating aquaculturesystems (RAS), could produce a similar amount of domes-tically farmed sh as open-water aquaculture. However,these two farming methods would have very differenteffects on the environment and the economy. The globalexperience with open-water aquaculture is troubling —the practice is associated with environmental pollution,damage to wildlife and competition with commercial sh-ermen. RAS is a relatively new practice — it has been de-veloping over the last 30 years — and could offer a moreecologically sustainable option that also does not, bydesign, compete with commercial shermen. Additionally,sh-producing RAS can be combined with plant produc-tion through aquaponic systems, yielding a more diverserange of food. (Aquaponics is the practice of growingherbs, vegetables or fruits using the water from sh tanks;the plants thrive in the nutrient-rich water and purify it forreuse in sh tanks.)Following is a comparison of the two methods of shproduction, ocean sh farming and RAS. The analysisdenitively shows that RAS is the more eco-friendly andeconomically sound alternative.
T
he human population is booming worldwide and demand is escalating for healthyprotein sources like seafood. Yet as more and more people consume sh, wedeplete our wild sh stocks to lower and lower levels. Many popular seafood choiceslike cod, various ounders and tunas are all already below healthy population levels.
1
 Further, because our domestic wild sh stocks are unable to meet demand, the UnitedStates currently imports more than 80 percent of its sh, about half of which is farm-raised (or “aquacultured”).
2
 
FISH
Photo of RAS-farmed tilapia by Eileen Flynn/Food & Water Watch.
 
Background on the Operations
The following sections compare the nancial feasibility of Ocean Fish Farming and RAS based on two companies:Hukilau Foods and Premier Organic Farms.Hukilau Foods began as the Hawaii Offshore AquacultureResearch Project (HOARP). In 1999, Randy Cates tookover the operation and it became the nation’s rst com-mercial open-ocean aquaculture farm in 2000.
3
In 2006,the HOARP project was found to have “grossly polluted”the seaoor, “severely depressed” certain types of sea lifeand “drastically changed” the ecosystem.
4
In 2006, Catesentered into an agreement with Visionary, LLC, to form thecompany Grove Farm Fish & Poi, LLC.
5
The ocean leasewas transferred to this company in 2007 and the farm wasrenamed Hukilau Foods.
6
Hukilau now plans to expand itsproduction and lease site, and the numbers here reect theupcoming expansion. The Environmental Assessment forthis expansion was approved in July 2009.
7
 Since the 1980s, the University of the Virgin Islands (UVI)Agricultural Experiment Station in St. Croix has beenconducting research on RAS. Much of the UVI research isconducted using a commercial-size RAS that incorporatesaquaponics. Through years of research, the staff at UVIhas established an aquaponics RAS that is made of easilyprocured material and is simple and efcient to run. Usingan eighth of an acre for production, the staff raises shand produce that is sold at a store on campus. The systemincludes four sh tanks, six hydroponic tanks and ltrationtanks to support good water quality and growth for boththe sh and plants.Premier Organic Farms, which is based on the modelcreated at UVI, combines organic growing practices incontrolled ecological environments as the basis for theirstate-of-the-art, eco-friendly aquaponics farming opera-tion, which can run anywhere in the world.
8
The companyhas done extensive research and development over thepast three years on its design known as the “Pod Grow-ing Unit.” Premier raises tilapia in RAS facilities that arelinked to plant tanks producing lettuce, herbs, peppersand tomatoes as its core products. Premier tilapia is fedan all-natural, nutritionally balanced diet of organic grainand protein. Premier Organic Farms does not use antibiot-ics or chemicals, nor does it use hormones.
9
Premier plansto build commercial Pod Growing Units near strategicmarkets across the United States over the next ve years,with further expansion worldwide as demand dictates. Thecalculations used in the following comparison are from theMemphis operation, which is currently under construction.
What You Can Get for $13 Million
Because the existing ocean sh farms in Hawaii are privateventures, their nancial records are not accessible to thepublic. Therefore, the total amount required to fund onefarm is unknown. However, we do know that $13 millionis being invested in the expansion of Hukilau Foods.
10
Thisnumber does not account for the money invested in start-ing HOARP or Cates International.One RAS aquaponics operation modeled on the UVI sys-tem and producing 11,000 pounds of tilapia and 37,800heads of lettuce per year, can be started with $40,490 (notincluding labor costs).
Ocean Fish Farming vs. RAS: Overview
The following aspects of ocean sh farming and RAS should be considered:
Ocean Fish FarmingRecirculating Aquaculture Systems (RAS)
Scalability 
Must be a large commercial operation.The costs and effort involved make small-scaleoperations unrealisticScalable.Can be a family-sized unit in a backyard or basement, orscaled up to a mid-large commercial-scale operation
Use of Space
Uses public ocean areas.and consequently conicts with other uses, such ascommercial and recreational shing, swimming, diving,boating and more (often without compensation to thepublic for exclusive use)Can be placed virtually anywhere,from a room or backyard to otherwise undesirable locationslike brownelds or unused buildings or warehouses
Pollution
Open system.Free ow of pollutants, including parasites, diseases,chemicals, uneaten feed, waste and animal escapes,directly into the oceanClosed-loop.RAS are completely contained systems that reuse most of thewater from the sh tanks. Wastes are removed (and poten-tially used in fertilizer or energy production) and water istreated and then recycled back to tanks
Competitionwith shermen
In direct competition with shermen.Because of certain escapes, only native species shouldbe grown via ocean sh farmingCan grow other species.RAS can grow non-native species that would not competewith shermen, including popular choices like tilapia
Ocean Fish FarmingDerived fromHukilau FoodsRecirculating AquaponicsDerived from theUniversity of the VirginIslands Experiment Station
Number of operations
1321
Total  production per year 
5 million pounds of sh3.53 million pounds of sh12.1 million heads of lettuce
 
Aquaponic RAS do not have to be limited to a smaller scaleof production. They can be easily designed to producemany more sh than Hukilau plans to farm. Premier Or-ganic Farms started with one operation, modeled after thesystem at the University of the Virgin Islands, and has scaledit up to multiple larger operations. Critics of RAS maypoint out that the drawback to this system is the amount of start-up capital needed (even though the large majority inthis model is for greenhouse plant growth, not sh produc-tion). However, this capital can be earned by starting smalland building up, or raised through investors, who may beattracted by the short amount of time expected to recoverstart-up costs and turn a multimillion-dollar prot.
Lettuce and other vegetables growing in RAS aquaponic tanks at UVI, courtesy of Dr. James Rakocy at the University of the Virgin Islands in St. Croix.
Large-Scale Commercial Production: Ocean Fish Farming vs. Aquaponic RAS
Hukilau Foods
1
Ocean Fish FarmingPremier Organic Farms — Memphis
2
Recirculating Aquaponics
Sales in sh(per year)
$20 million (projected) for moi$22.3 million (projected) for tilapia
 Jobs
25 for hatchery and administration282 full-time operations and production jobs
Fish production(per year)
5 million pounds11.44 million pounds
 Additional  products(per year)
None7.7 million pounds of Boston lettuce/arugula16.9 million pounds of baby greens/spinach/mixed greens6 million pounds of herbs12 million pounds of tomatoes
 Additional sales(per year)
None$114.5 million in vegetables(Total sales $136.8 million, sh and produce)
Initial capital investment 
$13 million now being invested (from privateinvestors and federal sheries loans) to scale upfrom 1.25 million pound production levels.
3
$4.2 million to build sh production unit and tilapia ngerlings andsh food$50 million total costs (including land, greenhouse construction,cafeteria and daycare facility for employees’ children)
Potential prot 
Less than $7 million in the rst year
4
$78 million in rst year (earnings before tax, depreciation andamortization)
Space used 
61.59 acres of seaoor plus the water column100 acres of land
Water used 
15.9 million gallons will be constantly owingthrough the cages at a rate of 0.5-2.0 kts40 million gallons of captured rainfall (for tilapia and plantproduction)
Energy used 
Numbers unavailableZero-impact operation — the system is in alliance with other indus-tries. It will provide heated rain/wastewater for energy plants to useand will get excess energy from the plants to use for its operation
1
Information drawn from: Aquaculture Planning & Advocacy, LLC. “Final Environment Assessment: Proposed Expansion of Hukilau Foods Offshore Fish Farm, MamalaBay, Oahu, Hawaii.” July 29, 2009. Sales, Jobs, Fish Production and Initial Capital Investment at p. 22; Space Used at 8; Water Use at 3 (volume of cages) and 28 (currentspeeds) with calculations conducted by Food & Water Watch for gallons of water based on volume of cages. 1 cubic meter = 264.172052 U.S. gallons
2
Information provided by Susan Bedwell, CFO, Premier Organic Farms, September 15, 2009. Information on le at Food & Water Watch.
3
$13 million is the investment that the company plans to make, as quoted in Aquaculture Planning & Advocacy LLC, Op cit. This gure does not include the money that wasinvested in starting up the Hawaiian Offshore Aquaculture Research and Demonstration Project, or Cates International, the predecessors of Hukilau Foods. $13 million doesnot necessarily represent the money that would be needed to start Hukilau Foods from scratch.
4
This is a generous calculation. Hukilau Foods projects a total wholesale value of $20 million when the operation at full capacity, but it does not actually plan to reach fullproduction until year three. $7 million would be the maximum revenue possible after recuperating the $13 million investment if the company did reach $20 million insales that rst year (a lower revenue is actually expected). Plus, because nancial gures prior to this expansion were not available, this calculation does not gure in thenancial status, or debt, Hukilau was in prior to this expansion.

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