Is Fish farming For Me? | Langston University

Is Fish farming For Me?

Is Fish farming For Me?

By Glen Gebhart and Kenneth Williams

Currently, there is much interest in fish farming as evidenced the thousands of phone calls and mail inquires directed to Langston University fisheries research and extension personnel. The most often asked question, "are there profits to be made in aquaculture?" requires a qualified answer. Yes, aquaculture can be profitable IF the fish farmer has the right natural resources, good management abilities and sufficient capital available for investment in the enterprise.

The future nationally for aquaculture, particularly catfish culture, appears bright. Fish farming and associated industries have expanded through the 1980's and 90's. Expansion has slowed somewhat, however, growth continues. Markets for fish are expanding rapidly because fish are highly nutritious, low in fat and calories, and may contribute to a reduced incidence of heart disease as suggested by recent research.

Natural Resource Requirements

Using proven fish culture technology, large amounts of readily available water are needed. Stocking rates are based on surface acreage, not on pond volume. Deep ponds are not an asset unless they are used as storage reservoirs to fill properly constructed fish culture ponds. These ponds need be only 4-6 feet in depth. Stocking rates are determined by experience, availability of aeration equipment and the amount of risk the fish farmer is willing to assume. These rates currently range from 2,000 lb/acre or less up to a maximum of about 6,000 lb/acre. High density tank or raceway fish culture using a relatively small amount of recirculating water, constant aeration, and filtration is a possibility as technologies improve; however, at the present time only highly experienced and well financed fish culturists have been consistently successful with these methods.

The amount of water necessary for a successful aquaculture enterprise depends upon the kind of operation, the marketing plan and the level of income required by the fish farmer. A fee fishing enterprise located near a large population center can be very successful with as little as 1 to 2 acres of water while raising food size (1 lb) catfish requires a minimum of 50 surface acres of water to generate enough income to support a family, if the fish are to be sold wholesale to a processor. A hatchery/fingerling production operation can do well with smaller acreages (10 acres and up), however, this kind of fish culture usually requires more technical knowledge and experience with fish than either fee fishing or food fish grow out enterprises. Fish brokerage businesses can also operate with smaller acreages. In these situations the ponds are primarily used for holding quantities of fish that will soon be marketed live or processed by the broker.

If the water is pumped from a well, a delivery rate of 15-25 gallons per minute are needed per surface acre of water. The water supply system will cost approximately $1500 plus $300 per surface acre of water. Watershed ponds need 5-25 acres of watershed runoff for each surface acre of pond. Watershed pond acreage should be calculated at the low summer level unless pumped water is available to make up for evaporation. Water for fish culture ponds can not be contaminated or polluted by chemicals or animal waste. It may also be necessary for the fish farmer to obtain legal rights for the use of the water. If there are questions about the legal use of the water, consult the Oklahoma Water Resources Board before investing money in pond construction.

Existing Ponds
Existing ponds can be used for fish culture but their use is often limited because they can not be drained or seined for an efficient harvest. If the pond is at least 1 surface acre in size, cage culture might be a possibility. Large Soil Conservation lakes are good candidates for commercial cage culture. Other options for small existing ponds include stocking large (6-8 in.) Catfish fingerlings and harvesting with hook and line for enjoyment or home consumption; or experimenting with lift nets or traps as a means to a more total fish harvest. Small existing ponds can be a good place to try out fish farming or raising small quantities of fish, but they are generally not suitable for commercial fish production.

Land Resources
Land resources should also be considered when planning an aquaculture enterprise. The topography of the land will determine the type of ponds that can be built. Flat or gently sloping cleared land with plenty of clay is the most economical for fish culture. Large dike ponds appropriate for fish culture can be built for the least expense. Construction of dike ponds costs about $1,500 to $2,000 per surface acre of water. Large ponds usually cost less per acre than smaller ones. Hill ponds built in draws can be used for fish culture if they are built wit ha smooth bottom suitable for seining and are drainable to facilitate harvest.

Managerial Requirements
Large scale fish culture is similar to other intensive animal enterprises in that it requires hard work, attention to details such as nutrition, health and care of the animals, as well as making sound economic decisions.

Intensive fish farming, raising more than 2000 lb/acre, will demand water quality monitoring at night, with emergency aeration sometimes need to prevent the total loss of fish in a pond. Aquaculture also requires occasional hard physical labor. At the expense of increased capitalization and decreased returns, some work can be mechanized and some labor can be hired; however, such labor savings to management are only economically justifiable on large fish farms. Fish farming is similar to other farming which requires hard work to be successful.

Fish farming, like other business enterprises, requires accurate record keeping to make informed economic decisions concerning purchase of feed, fingerlings and related items or strategies to optimize returns from the market place. Large scale commercial fish farming is not a good business to retire into as a hobby.

Capital Requirements
The cost of getting into fish culture can be high compared with other agricultural commodities. A successful operation must be well planned. An extensive enterprise budget is the first step in such a plan and will certainly be required if the capital for the venture is borrowed. "Alternative" agricultural enterprises may be eligible for some low cost government backed loans or other special lending instruments. These programs should not be overlooked as potential sources of funding.

Aquaculture is usually not an enterprise that will save a farmer who is already financially distressed. The start up costs are often too high and experience is needed to consistently produce a profitable harvest.

A detailed economic analysis of various fish culture enterprises can be obtained through the Langston University computer program dealing with this topic. As a rough guide, assuming production of 3000 pounds of catfish per acre sold wholesale to a fish processing plant, at least $3,000 per acre will be required for start up and operating costs. This includes minimal or shared equipment, low cost pond construction, feed and fingerlings. Net profits per acre per year will be about $300 or $0.10/lb (all data based on surface acreage of water) which is a good return per acre compared with traditional grain crops. However, these returns effectively demonstrate that a family income can not be generated from a few acres if fish are to be sold wholesale to a processor. These estimates of return vary depending on the skill of the fish farmer, actual cost of production, current market prices, and perhaps most importantly, marketing strategy., Almost any type of retail sales strategy, whether for all or part of the production, will increase returns to the farmer over wholesale marketing of live food fish. Net returns with a retail marketing strategy can be as high as $1.00/lb more than wholesaling fish to the processing plant. In small scale aquaculture enterprises, retail sales offer the only opportunity for reasonable profits on investment.

A small scale retail marketing strategy may include direct sales to the public or to intermediate sources such as small grocers and restaurants. A farmer can usually market 3000 t o5000 lb of fish in this manner. For many fish farmers with limited water resources, the most profitable market is sales to friends and neighbors or home consumption by the family. Fish can be produced for home consumption for about $0.90/lb dressed fish, which is a considerable savings over current supermarket prices of $2.00/lb and up.

Getting Started
Assuming that land and water resources are available in quantities suitable for aquaculture, the next step toward profitable fish farming is to start small, with perhaps only one or two production ponds or a few cages in an existing pond. This often overlooked step will give the potential fish farmer valuable experience with aquaculture techniques and problems at minimal cost. There are several reasons for starting small and growing larger as experience and market increase.

Growing fish is probably a new experience for many people and there is much to be learned regarding the needs of the fish species chosen for production, water quality, feeds, harvest, and marketing requirements. Some of these techniques can be learned from books and seminars, however, practical experience is still the best teacher. It can be very frustrating and disheartening, if not economically disastrous, to find a pond full of dead fish after investing thousands of dollars and many hours of labor. The experience gained in even one year’s trial production can greatly reduce the likelihood of a production disaster.

If financing is necessary for a fish farming enterprise, it may be difficult to secure the loan without a proven track record of production success. With a couple year’s experience, an enterprise budget can be developed based on documented past history. Most lenders want evidence of the soundness of expansion plans and the ability of the fish farmer to manage the operation profitably.

Starting small allows the fish farmer to locate quality suppliers of fingerlings, fish feed, and accessory equipment. Poor quality feeds and fingerlings, although apparently a bargain when initially purchased, often prove to be a very costly learning experience. If inexperience leads to incorrect purchasing decisions on a large scale, proportionally large financial losses or even bankruptcy may result. There is a wide range in quality and prices of necessary supplies for fish farming and personal experience is the best judge of what will work for a particular fish farming enterprise.

Starting small also gives the fish farmer time to develop markets. It has often been stated that the fish should all be marketed before production begins. In reality it is difficult to find markets unless fish are available for sale; consequently, it is much easier to expand production and markets once fish have been sold and a reputation for a consistent quality product is established.

It takes a while to establish lucrative retail or direct markets, but the profit margins are so much better than wholesale markets that the fish farmer should make a determined effort to sell as many fish as possible in this manner before resorting to a wholesale marketing strategy.

New fish farmers often discover that water supplies are not as abundant as originally assumed or that a different pond design or drainage system would better suit their needs. These kinds of problems are much easier and less costly to remedy when the fish farmer begins small and then grow.

And finally, if the potential fish farmer determines that aquaculture is not a suitable enterprise, for whatever reason, little money or labor will be lost. The ponds can be used for recreation, family fish production or other farming enterprises.

Remember the steps to profitable aquaculture: read and study available information, attend fish farming meetings and seminars, talk with other fish farmers and extension agents, evaluate your natural resources, prepare an enterprise budget, and test aquaculture plans on a small scale before investing large amounts of capital and labor in the enterprise. If, in the final analysis, you decide that fish farming is a possibility for you, then do give fish culture a try. It is an expanding industry. There is money being made growing fish, and you will never make any of that money if you never get started.

Land capable of holding water, usually high in clay. Flat to gently sloping land is best.

15-25 gallons per minute flow per acre of pond. Clear legal rights to the water, consult Water Resources Board. No pollution hazards.

4-6 ft water depth, smooth bottom, drainable, seinable or suitable for cages. At least 1 surface acre. Accessible by large trucks. Existing ponds are generally OK for small scale production but commercial applications are limited.

Managerial and Labor Requirements
Accurate record keeping.

Attention to detail.

Willingness to check fish and water quality conditions in the predawn hours.

Capital Requirements
Variable with each situation, in general:

Pond construction costs, about $1500-$2000/surface acre.

Large ponds are generally less expensive per acre than small ones.

Initial start up costs about $3000/acre of water (does not include cost of land).

Production Costs
Feed $0.14/lb to $0.18/lb, need about 1.5-2.0 lb of feed /lb of fish produced.

Fingerlings $0.08-$0.24 each.

Cost/lb of fish produced about $0.60-$0.70.

Potential Net Returns
Wholesale to processor, $0.10/lb or about $300/acre.

Retail, variable depending on outlet.

Getting Started
Learn all you can before investing in aquaculture, talk with extension specialists and other fish farmers, go to meetings, field days and workshops.

Develop an enterprise budget and marketing strategy.

Locate quality suppliers.

Start small and expand with experience and markets.