Economic Comparison of Commercial-Scale Multiple-batch and “Modular” Catfish Production Systems

1. Economic Comparison of Commercial-Scale Multiple-batch and “Modular” Catfish Production Systems Dr. Jim Steeby National Warmwater Aquaculture Center Mississippi State University and Dr. Terry Hanson Department of Agricultural Economics Mississippi State University

2. Current situation • Decreasing price received • Increasing fish size required by processor • Decreasing profitability • Inconsistent yields and fish too small • Needs A production system that will work over the long-term with changing conditions, prices, and fish size

3. Present Production System Multiple-batch 1,350-acre Catfish Farm MS Delta

4. Multiple-batch 1,350-acre Catfish Farm MS Delta Traditionally Small fingerlings (4-5 in) are stocked yearly because they are readily available, inexpensive and easily moved in large numbers.

5. Multiple-batch 1,350-acre Catfish Farm MS Delta Usually 4-5 in fingerlings take 18-24 months to reach average current market size (1.75 ± 0.5 lb). Survival rates range from 55-84% so that yields and size are both highly variable.

6. Multiple-batch 1,350-acre Catfish Farm MS Delta Larger fingerlings-stockers can reduce the production period to 8-14 months but are costly to purchase, not in large supply, and difficult to move large distances.

7. Modular System 1,350-acre Catfish Farm MS Delta Solution: Purchase small fingerlings to grow to stockers (7-9 in) Place the stockers in growout ponds the second year for more consistent yields and fish sizes

8. Modular System 1,350-acre Catfish Farm MS Delta Solution: 4-5 in Fingerlings are stocked at 40-50,000/acre in the stocker ponds Some acreage lost to stocker production Additional fish movement required

9. Modular System 1,350-acre Catfish Farm MS Delta Solution: Fingerlings are stocked at 40-50,000/acre in the stocker ponds These fish feed very actively and grow well when stocked at these rates but some additional aeration should be allocated.

10. Modular System 1,350-acre Catfish Farm MS Delta Solution: This modular system is currently in use on several farms and has produced good results.

11. Net Returns to Land • Gross receipts • Variable or Operating Costs • Including management charge • Fixed Costs • Depreciation • Interest on Loans • Repairs and Maintenance • Taxes • Insurance

12. 75 cent fish

13. 75 cent fish 55 cent fish

14. Catfish Price Paid to Producer, $/lb 5-year avg 10-year avg There is a strong seasonal aspect to pond-bank pricing as seen in the 5 and 10-year average price received curves above. However, the norm was not followed in 2001.

15. Catfish Price Paid to Producer, $/lb 5-year avg 10-year avg 2001 price There is a strong seasonal aspect to pond-bank pricing as seen in the 5 and 10-year average price received curves above. However, the norm was not followed in 2001.

16. Catfish Price Paid to Producer, $/lb 5-year avg 10-year avg 2001 price 2002 price There is a strong seasonal aspect to pond-bank pricing as seen in the 5 and 10-year average price received curves above. However, the norm was not followed in 2001 and 2002.

17. What is being taken into account for this comparative analysis? • Farm size • Production (fingerlings stocked, pounds harvested, feed fed) • Labor • Chemicals • Other Variable & Fixed Costs • Machinery and Equipment

18. Farm Size - Acreage Comparison

19. Thus, Comparing…All Costs for • 1,050 grow-out acres in the multiple batch production system to... • 900 grow-out acres in the modular production system PLUS all costs involved in 200-acres of ‘fingerling-to-stocker’ production

20. Production - Fingerlings Stocked

21. Production - Pounds

22. Production - Feed Consumed

23. Labor Comparisons The MODULAR system has an additional 4 seining crew employees over the MULTI-BATCH production system, or an additional $72,000 per year in labor and management costs.

24. Chemical Comparisons

25. Equipment Differences • Same Rule for each system: • 1 tractor & PTO emergency aerator for every 3 ponds • 2 10-hp electric aerators per 10-acre pond • Modular System had two boom loading trucks and multi-batch system had one

27. Breakeven Analysis

28. 75 cent modular 75 cent-batch 55 cent-modular 55 cent-batch

29. Conclusions • Modular system in use currently • Economic analysis shows increased net returns • Other ‘non-cash’ reasons to pursue this system are: • Producers have additional control • Size and stocking rates • Reduced risk of over- or under-stocked ponds • Single batch or “1-1/2 batch” system • Better inventory control • Dead fish evident sooner • More efficient use of foodfish pond space

30. Conclusions • Changing over to a Modular system will be more or less difficult depending on your present production system type and acreage • New genetic strains of channel catfish may also yield good results (larger fingerlings may be available with a reduction in growout time).