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ECONOMICS FACTORS CRITICAL to the PROFITABILITY of SUPER-INTENSIVE BIOFLOC RECIRCULATING SHRIMP PRODUCTION SYSTEMS for MARINE SHRIMP Litopenaeus

vannamei
Terry Hanson
Department of Fisheries and Allied Aquacultures Auburn University, Auburn, AL

World Aquaculture 2009

Vera Cruz, Mexico

September 25-29, 2009

Presentation
USMSFP bio-economic model as a research and development tool Investment costs Economic analysis of systems Critical factors affecting profitability Conclusions Opportunities for the future

Acknowledgements
Benedict Posadas, MSU Tzachi M. Samocha, Texas A&M Alvin D. Stokes, Waddel Mariculture Center Thomas Losordo, UNC Craig L. Browdy, Novus

Investment Costs
Land
Greenhouse area Waste treatment pond area Office area Land preparation cost

Greenhouse structure and components Raceway and components

Greenhouse Components
5,000 m2 raceway in GH (2 nursery RW + 8 GO RW ) Greenhouse
Structure Covering Systems Heat / cooling Electrical Shading Controls

Raceways with:
Heating system, drain pipes, and catwalks Mechanical and lab building Air supply

Freight and installation Equity to Bank Financing Ratio is crucial to project viability

Total Cost: Approx. $1 million per fully equipped GH

Economic Analysis of Superintensive Recirculating Shrimp Production Systems

Limitations of Analysis
Future conditions are unknown
Assume price conditions Assume loan conditions

Are back-to-back-to-back crops possible?


Depends on input availability, primarily PLs

Assume availability is year-round

Economic Analysis - I
Texas A&M Agri-Life Research Center

Dr. Samocha Recent Study

Litopenaeus vannam ei performance in a 94 d grow-

out trial in greenhouse-enclosed RWs stocked with juveniles (1.25 g) at a density of 530/m3 & operated with no water exchange Average Treatment Data Used in the Economic Analysis

Treatment Settling-Ave FF-Ave


* **

Wtf (g) 18.45 17.35

Growth Yield* Yield** Sur. FCR (g/wk) (kg/m3) (kg/m2) (%) 1.28 1.26 8.96 8.25 4.76 4.52 84.4 1.29 80.3 1.35

Water Use (L/kg Shrimp) 148.5 149.5

Based on RW water volume at harvest (37 m3) Based on RW bottom area of 68.5 m2

Enterprise Budget
Value/Cost, $/lb 1. Gross Receipts 2. Variable Costs 3. Income Above Variable Cost 4. Fixed Cost 5. Total of All Specified Expenses 6. Net Returns Above All Specified Expenses /1 Settling $3.27 $2.22 $1.04 $0.35 $2.57 $0.70 Foam Fractionation $3.27 $2.49 $0.77 $0.40 $2.90 $0.37

Economic Analysis - II
The Oceanic Institute Dr. Shaun Moss and Clete Otoshi Recent Study

Oceanic Institute - Litopenaeus vannamei performance in greenhouse-enclosed RWs stocked at 301/m2 (Trial #1) and 401/m2 (Trials #2 and #3) and grown for 98, 88, and 94 days respectively with no water exchange
Treatment Wt (g) 21.0a 18.5a 17.4b Growth Yield* Yield** (g/wk) (kg/m3) (kg/m2) 1.44 1.48 1.49 7.5 8.4 10.0 5.7 6.4 7.6 Sur. (%) 89.5 80.4 90.6 FCR Water Use (L/kg Shrimp) 187 285 172

Trial # 1 Trial # 2 Trial # 3

1.50 2.01 1.67

Number of crops per year for Trial #1 - 3.6; Trial #2 - 4.0; and Trial #3 - 3.8
*
**

Based on RW water volume at harvest (57 m3) Based on RW bottom area of 75.0 m2

OI #3 - Enterprise Budget and Cash Flow Summary


Value/Cost per lb 1. Gross Receipts 2. Variable Costs 3. Income Above Variable Cost 4. Fixed Cost 5. Total of All Specified Expenses 6. Net Returns Above All Costs Over a 10-year period and 10 GH: Pay back period Discount rate Net present value Internal Rate of Return yr % $ million % $3.27 $1.54 $1.73 $0.66 $2.20 $1.07 Average 2.09 10.00 16.11 39.43

Economic Analysis - III


Critical Factors

Change in NPV and IRR with 20% Improvement in Critical Production Factors
Grow-out Components
1. GO survival 2. Shrimp price 3. GO stocking density 4. Initial investment 5. GO growth rate 6. Nursery & GO feed 7. Source of financing 8. Nursery survival 9. PL cost

Change
+20% +20% +20% -20% +20% -20% 20/80-0/100 +20% -20%

Change from Base NPV $mil. IRR %


10.48 9.57 6.16 2.24 2.23 2.37 1.79 1.12 1.01 13.7 12.5 8.1 6.8 6.4 3.1 2.4 1.5 1.2

Compared to Base Scenario: $10.8 million and 25.3% IRR

Conclusions
Many factors affect the COP and financial viability Could be feasible under certain biological and economic conditions Combination of small changes in many growout components can lead to profitability

Opportunities for the Future


Improving technologies are:
Increasing growth and production rates Reducing variable and fixed costs

Genetic selection
Higher yields over time

Financial analyses are focusing research


Improves competitiveness

Marketing opportunities

Thank You Very Much! Questions?