Editor’s note
The following abstract describes a publication that is only available as a downloadable PDF.
To develop a custom enterprise budget for an aquaculture RAS operation, download a free, interactive spreadsheet with information for tilapia, bass, catfish or shrimp.
Summary
Designed for aquaculture entrepreneurs, this report provides business model examples to consider before building an aquaculture operation in Missouri. Today, Missouri has a diverse aquaculture industry composed of businesses serving many different customers and market channels. Varied topography and groundwater availability have guided existing operation locations. Mild winters in the southeast region of the state provided certain aquaculture pioneers with a more favorable production season than the season found in other Missouri areas. University of Missouri Extension publication MX461, Growing Missouri’s Aquaculture Industry: Needs Assessment details current industry information and needs identified by Missouri aquaculture businesses.
Nationwide, the aquaculture industry has grown to feature clusters of highly developed and specialized businesses. Examples of successful regional clusters include trout farms along rivers in Idaho and operations raising catfish in the southeastern Mississippi River Delta states. Other areas of the country are home to operations satisfying local demand or those selling fresh fish into niche markets. For instance, California has several examples of niche fresh fish operations. Niche aquaculture markets include raising fish for pond stocking; rearing fish for conservation departments and municipalities to fill lakes and rivers; and producing tropical, premium or specialty fish for local food and ornamental markets.
Business models detailed in this report intend to take advantage of emerging aquaculture opportunities, build on Missouri aquaculture’s strengths, avoid Missouri’s apparent weaknesses and steer around threats posed by competitive aquaculture businesses. Exhibit S1 summarizes Missouri aquaculture’s strengths, weaknesses, opportunities and threats.
Exhibit S1. Missouri’s Competitive Position: Strengths, Weaknesses, Opportunities and Threats
| Strengths | Weaknesses |
|---|---|
| Available water with good quality in many areas | Relatively high costs in Missouri to produce warm-water species |
| Experience and specialized production knowledge among existing operations | Lack of scale advantage to enable low-cost warm-water species production |
| Successful existing multigenerational operations with well-developed marketing channels | Lack of scale advantage for producing cold-water species in raceway systems |
| Centralized location and proximity to large U.S. consumer markets | Missouri aquaculture is heavily regulated to protect waters from invasive species and pests |
| Trout production possible in areas with high volume of natural spring water | Labor shortages in many areas |
| Nearby soybean, corn and insect feed production | RAS systems consume oxygen in the tank if water circulation stops, which makes rural power outages a risk |
| Opportunities | Threats |
| Grow existing ornamental or fish stocking markets via events, brokers, direct-to-consumer transactions and online sales | Developing aquaculture system expertise often requires trial and error (killed fish) over many years |
| Supply live and fresh food fish for ethnic consumer markets in nearby Midwest cities | Price competition for commodity fish imported from Asia or produced by existing U.S. businesses |
| Custom produce and process ultra fresh food fish for restaurants and institutions | Fish feed is expensive in Missouri because existing feed suppliers are not located near the state |
| Sell fresh or frozen food fish directly to consumers seeking quality through online sales and fulfillment | Capital availability is limited to those with strong track records or balance sheets due to lack of industry familiarity among traditional agricultural lenders |
| Develop large-scale integrated indoor recirculating systems to produce fish intended for selling as branded products and replacing wild catch and imports | Southern U.S. outdoor aquaculture has lower cost of production for warm-water species |
| Develop agritourism fishing venues to grow the market for stocking fish | Southeast Asia has climate, labor and scale advantage in producing low-cost warm-water species |
Exhibit S2 summarizes eight business models for aquaculture entrepreneurs to consider. Developed for new entrants, these models reflect a scale large enough to return $45,000 in salary to an owner and yet small enough to focus on niche markets rather than compete with large firms. These models were designed assuming an entrepreneur is building a business from scratch and not using any pre-existing ponds, building or equipment. A 6.5% cost of capital is charged on average capital invested. Models assume the producer bears the cost of delivering fish or crustaceans. These and other assumptions are reflective of the current conditions at the time this report was written. Potential new entrants are encouraged to reexamine and update these assumptions over time and for their respective situation.
Exhibit S2. Missouri Aquaculture Business Models: Pond Culture and Recirculating Aquaculture Systems (RAS)
| Model | Culture System | Annual Production (Pounds) | Primary Market Channel | Capital Investment (Dollars) | Hired Labor (Dollars) | Cost of Production (Percent of Total Sales) | Feed Cost (Percent of Total Sales) | Labor Cost (Percent of Total Sales) |
|---|---|---|---|---|---|---|---|---|
| Catfish | Pond | 76,500 | Recreational stocking | 438,050 | 12,544 | 77% | 12% | 3% |
| Bluegill | Pond | 54,600 | Recreational stocking | 438,050 | 10,752 | 85% | 7% | 1% |
| Bass | Pond | 50,400 | Recreational stocking | 438,050 | 13,440 | 95% | 16% | 4% |
| Grass carp | Pond | 25,650 | Recreational stocking | 438,050 | 13,440 | 135% | NA | 9% |
| Catfish | RAS | 68,384 | Food fish (live) | 360,353 | 40,320 | 77% | 12% | 15% |
| Bass | RAS | 40,102 | Food fish (live) | 360,353 | 35,840 | 84% | 10% | 15% |
| Shrimp | RAS | 15,513 | Food fish (live) | 360,353 | 31,360 | 76% | 9% | 10% |
| Tilapia | RAS | 142,467 | Food fish (live) | 360,353 | 53,760 | 83% | 23% | 15% |
Considering the state’s climate and market variability, no one-size-fits-all operation will suit Missouri aquaculture. Missouri’s climate and water resources do not compare to conditions in areas, such as Idaho and the southeastern Mississippi River Delta states, where developed, large-scale aquaculture has become more established. However, some large-scale commercial operations exist within Missouri. These existing operations leverage previously built infrastructure or unique aquaculture resources. Many operations were built when the competitive economic landscape and environmental regulation were different from today’s. They have established markets channels that new businesses would have to create over time. For these reasons, opportunities for startup aquaculture operations detailed here are focused more on niche markets and selling live, fresh or small-scale specialty products.
Contents
- Summary
- Freshwater Pond Culture Models
- Background
- Capital Investments
- Catfish Model
- Bluegill Model
- Largemouth Bass Model
- Grass Carp Model
- Recirculating Aquaculture System (RAS) Models
- Background
- Capital Investments
- Catfish Model
- Largemouth Bass Model
- Shrimp Model
- Tilapia Model
- Summary of Business Models
Pages
- 35