ECONOMICS FACTORS CRITICAL to the PROFITABILITY of
SUPER-INTENSIVE BIOFLOC RECIRCULATING SHRIMP PRODUCTION
SYSTEMS for MARINE SHRIMP Litopenaeus vannamei
Terry HansonDepartment 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 toolInvestment costsEconomic analysis of systemsCritical factors affecting profitabilityConclusions Opportunities for the future
Acknowledgements
Benedict Posadas, MSUTzachi M. Samocha, Texas A&MAlvin D. Stokes, Waddel Mariculture CenterThomas Losordo, UNCCraig L. Browdy, Novus
Investment Costs
Land– Greenhouse area– Waste treatment pond area– Office area– Land preparation cost
Greenhouse structure and componentsRaceway and components
Greenhouse Components5,000 m2 raceway in GH
(2 nursery RW + 8 GO RW )
Greenhouse– Structure
– Covering
– Systems• Heat / cooling
• Electrical
• Shading
– Controls
– Freight and installation
Raceways with:– Heating system, drain
pipes, and catwalks
– Mechanical and lab building
– Air supply
Total Cost: Approx. $1 million per fully equipped GH
Equity to Bank Financing Ratio is crucial to project viability
Economic Analysis of Super-intensive 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. SamochaRecent Study
Litopenaeus vannamei performance in a 94 d grow-out trial in greenhouse-enclosed RW’s 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 Wtf(g)
Growth(g/wk)
Yield*
(kg/m3)Yield**
(kg/m2)Sur.(%) FCR
Water Use(L/kg
Shrimp)
Settling-Ave 18.45 1.28 8.96 4.76 84.4 1.29 148.5
FF-Ave 17.35 1.26 8.25 4.52 80.3 1.35 149.5
* Based on RW water volume at harvest (37 m3)** Based on RW bottom area of 68.5 m2
Enterprise Budget
Value/Cost, $/lb SettlingFoam
Fractionation
1. Gross Receipts $3.27 $3.27
2. Variable Costs $2.22 $2.49
3. Income Above Variable Cost $1.04 $0.77
4. Fixed Cost $0.35 $0.40 5. Total of All Specified Expenses $2.57 $2.90
6. Net Returns Above All Specified Expenses /1 $0.70 $0.37
Economic Analysis - II
The Oceanic InstituteDr. Shaun Moss and Clete Otoshi
Recent Study
Oceanic Institute - Litopenaeus vannamei performance in greenhouse-enclosed RW’s 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)
Growth(g/wk)
Yield*
(kg/m3)Yield**
(kg/m2)Sur.(%) FCR Water Use
(L/kg Shrimp)
Trial # 1 21.0a 1.44 7.5 5.7 89.5 1.50 187
Trial # 2 18.5a 1.48 8.4 6.4 80.4 2.01 285
Trial # 3 17.4b 1.49 10.0 7.6 90.6 1.67 172
* Based on RW water volume at harvest (57 m3)** Based on RW bottom area of 75.0 m2
Number of crops per year for Trial #1 - 3.6; Trial #2 - 4.0; and Trial #3 - 3.8
OI #3 - Enterprise Budget and Cash Flow SummaryValue/Cost
per lb1. Gross Receipts $3.27 2. Variable Costs $1.54 3. Income Above Variable Cost $1.73 4. Fixed Cost $0.66 5. Total of All Specified Expenses $2.20 6. Net Returns Above All Costs $1.07
Over a 10-year period and 10 GH: AveragePay back period yr 2.09Discount rate % 10.00Net present value $ million 16.11Internal Rate of Return % 39.43
Economic Analysis - III
Critical Factors
Change in NPV and IRR with 20% Improvement in Critical Production Factors
Grow-out Components Change
Change from BaseNPV $mil. IRR %
1. GO survival +20% 10.48 13.72. Shrimp price +20% 9.57 12.53. GO stocking density +20% 6.16 8.14. Initial investment -20% 2.24 6.85. GO growth rate +20% 2.23 6.46. Nursery & GO feed -20% 2.37 3.17. Source of financing 20/80-0/100 1.79 2.48. Nursery survival +20% 1.12 1.59. PL cost -20% 1.01 1.2
Compared to Base Scenario: $10.8 million and 25.3% IRR
ConclusionsMany factors affect the COP and financial viability
Could be feasible under certain biological and economic conditions
Combination of small changes in many grow-out components can lead to profitability
Opportunities for the FutureImproving 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!
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