Tilapia International Supply and Demand: How do we grow it cheaper and sell more?

1. Tilapia International Supply and Demand: How do we grow it cheaper and sell more? Kevin FitzsimmonsUniversity of Arizona American Tilapia Association Louisville, KY Feb 20, 2003

2. Introduction • Review worldwide tilapia trade • US suppliers and consumers • Technological advances • US production • Opportunities to expand consumption

4. Major Tilapia Producers (for year 2000) • China - 629,182 metric tons / year • Mexico - 102,000 mt / year • Thailand - 100,000 mt / year • Philippines - 92,284 mt / year • Taiwan Province - 85,000 mt / year • Brazil - 65,000 mt / year • Indonesia - 50,000 mt / year

5. Established market demand • Accepted in many national dishes • Popular in many forms (live, whole, fillets, fresh and frozen, smoked, sashimi, fried skins)

6. US Tilapia consumption - 2002 (Jan-Nov)(117,842 mt of live weight)(259,723,000 lbs of live weight)

8. US. Tilapia imports 1993-2002

9. $155,371,374 (Jan-Nov 2002)

10. Problem areas in US tilapia aquaculture • High feed & other production costs • Slow growing females • Off-flavors • Effluents and other regulations • Marketing to new customers • Marketing to old customers • Marketing, marketing, marketing

11. Advances and Solutions: Lowering feed costs • Alternative ingredients • Green systems for fry and fingerlings • Increase volume purchases (co-operative buying)

12. Advances and Solutions: Slow growing females • Methyltestosterone for sex-reversal • Genetically male tilapia • All male hybrids • High density culture • O. niloticus with larger females

13. Advances and Solutions: Off-flavors • Depuration systems • Control of blue-green algae • Production in systems with limited access to benthic algae

14. Advances and Solutions: Effluents & other Regulations • Integrated farming systems • Field crop irrigation, hydroponics, golf courses

15. Advances and Solutions: Marketing • Advertising • Product placement • Endorsements • Co-market with big buyers

16. Advertising

17. Product placement • “Saving Faith” • Murder mystery • Detective fixes elegant tilapia dinner to seduce the beautiful blonde.

18. Dear Kevin, • I recently began using Tilapia fillets farm raised by Sea Best and distributed by Beaver Street Fisheries, Inc. I buy these in individual vacuum sealed packages in one pound bags at Wal-Mart in San Marcos, Texas. My husband has diabetes and we both are very weight conscious. This fish is the perfect food item for us, I love the way it is packaged, just use what I need for one meal, it is reasonably priced, always available in the market and consistently high quality. I trust you will forward these comments to the producer. • I LOVE THE PRODUCT!!!! • Marian Birnie Aug. 12, 2001

19. www.tilapia.org

20. Co-market with big buyers • Provide live tanks in restaurants and grocery stores (Trader Joe’s) • Live tanks at farmers markets • Sell to processors along with other fish (catfish)

21. Direct retail sales

22. USA  9,000 mt • Production in many states • Mostly intensive systems, many recirculating • Sales to ethnic markets as live fish, high value

23. USA - Intensive tanks Tanks in Arizona Tanks in California

24. USA - Ponds and cages

25. Raceway Systems Intensive raceways Extensive raceways

26. Intensive farms in New York and Iowa

27. Intensive farms in Illinois & Louisiana

28. Typical prices for Tilapia products sold in the U.S. (Feb. 2003.)

29. International/US Supply and Demand TRENDS • Supply of fillets primarily from China, Southeast Asia, Ecuador and Central America. • Demand for live fish needs to expand beyond Asian markets • With rapid increases in supply, demand must increase at least as fast to support price.

30. Major Tilapia Producers in International Trade • China - whole frozen, IQF fillets • Ecuador - fresh fillets • Taiwan Prov. - whole, IQF, sashimi • Central America - fresh fillets • Indonesia - IQF fillets • Thailand - IQF fillets

31. Current International Market Trends • Increase in demand for all forms of tilapia • Demand increase will be greatest for fresh fillets • Prices have been constant for several years and will remain stable, will not increase with inflation.

32. New recipes

33. New recipes

34. Changes and Predictions • Further intensification in virtually every country • Production will be 75% Oreochromis niloticus, 20% Red strains, O. aureus and O. mossambicus mostly for hybridization • Production will be 50% intensive ponds, 25% cages, 10% intensive recirculating systems

35. Changes and Predictions • Further intensification in virtually every country • Production will be 75% Oreochromis niloticus, 20% Red strains, O. aureus and O. mossambicus mostly for hybridization • Production will be 50% intensive ponds, 25% cages, 10% intensive recirculating systems

36. Changes and Predictions • Further intensification in virtually every country • Production will be 75% Oreochromis niloticus, 20% Red strains, O. aureus and O. mossambicus mostly for hybridization • Production will be 50% intensive ponds, 25% cages, 10% intensive recirculating systems

37. Changes and Predictions • Leather goods from skin will become a significant contributor to profitability • Processing and "value-adding" will intensify in producing countries • Polyculture with shrimp will become common in most shrimp farming areas

38. Changes and Predictions • Leather goods from skin will become a significant contributor to profitability • Processing and "value-adding" will intensify in producing countries • Polyculture with shrimp will become common in most shrimp farming areas

39. Changes and Predictions • Leather goods from skin will become a significant contributor to profitability • Processing and "value-adding" will intensify in producing countries • Polyculture with shrimp will become common in most shrimp farming areas (already practiced in Thailand, Philippines, Mexico, US, Ecuador, Peru, Eritrea)

40. Changes and Predictions • US production will increase slowly, intensifying current production methods

41. Changes and Predictions • US production will increase slowly, intensifying current production methods • World tilapia production will reach 1,500,000 mt in 2003 and 2,000,000 mt by 2010

42. Thank you • Reminder: tilapia dinner at Lilly’s at 8:00 tonight • Questions ???

43. Typical Chinese Farms • 0.2 to 1.0 hectare ponds • Often polyculture with other fish • Sometimes have single aerator • Family operated • Sell to harvester

44. Boxed with retailer labels • US and European markets • Boxed with frozen fillets or whole fish

45. Marketing in China • Most fish sold locally to restaurants • Just beginning advertising • Suggest product placement, inclusion in government food programs, value added for domestic markets

46. Markets in Mexico Raceway system • Strong domestic markets; on ice, fillets in grocery stores • All domestic consumption - Will eventually develop export markets.

47. Carbon monoxide • Most plants appear to use carbon monoxide • Some gas in chambers others infuse in bags before freezing

48. Egypt and other Middle East • Egypt - Production in cages, polyculture ponds and rice paddies. • Israel - Intensive, center of research and technology transfer • Saudi Arabia - Intensive with crop irrigation • Jordan - Intensive

49. Estimated cost of production • China - $0.70/kg • Philippines, Indonesia - $0.80/kg • Brazil, Ecuador, Thailand - $0.85/kg • Honduras, Costa Rica - $0.90/kg • Mexico - $1.00/kg • Taiwan Province - $1.05/kg • US - $2.00/kg • Canada - $2.10/kg

50. Sashimi