Business Trends: Opportunity awaits?
U.S. ripe for sustainable aquaculture, but businesses need to get on board
Domestic aquaculture production is valued at about $1.8 billion.
By Joanne Friedrick
November 01, 2010
While many discussions surrounding sustainable seafood have included the pros and cons of farmed fish, few have discussed the realities of farming fish in the United States. Aquaculture is big business for many countries, although not necessarily here in the United States. While some countries have experienced double-digit percentage growth from 2004 to 2006, according to the Food and Agriculture Organization, America was not among them. Most aquaculture growth is in developing nations such as Uganda, Guatemala an d Mozambique.
The United States isn't listed among the top 10 producing countries. Instead, the world's aquaculture business is dominated by China, in terms of volume, and Vietnam, based on percentage growth. China led production with 66.7 percent, followed by other parts of Asia and the Pacific with 22.8 percent and a host of regions making up the remaining percentage. North America accounts for 1.2 percent, just ahead of the Near East, but behind Europe, Latin America and the Caribbean and Africa. In China alone, 4.5 million people are involved in aquaculture.
North America accounts for 2.2 percent of the world aquaculture market from a value standpoint, while China and Asia dominate with 48.8 percent and 28.3 percent, respectively.
In 2008, the U.S. aquaculture industry was valued at about $1.2 billion. Catfish dominated in volume at 233,564 metric tons, followed by crawfish at 53,285 metric tons and salmon and trout, with about 16,000 metric tons each.
Dave Conley, senior consultant and founding partner of The Aquaculture Communications Group in Ottawa, says "for whatever reason, the United States is not an enabling environment" for aquaculture. "Most people would rather do [fish farming] elsewhere," establishing farms in other countries and exporting the product to North America.
Compared with Asia's 37 million fishers and fish farmers, North America and Central America has just more than 1 million people involved in commercial fishing and aquaculture.
For consumers, manufacturers and suppliers concerned about sustainability and traceability, Conley says "shipping it from Southeast Asia isn't as stable as growing it in your own backyard." The strict regulatory environment in the United States may have discouraged some companies from establishing aquaculture businesses here, he says, but that same structure should be looked upon favorably by those wanting a safe, sustainable fishery.
"If you can trace it from the egg to the plate, that should be a bonus to consumers," he says.
Conley notes that there are several developments taking place in aquaculture that could alter the business model for U.S.-based systems going forward. Offshore aquaculture, land-based recirculating systems and integrated multi-trophic aquaculture are all evolving and could provide sustainable solutions going forward, he says.
Some of the issues surrounding offshore farming such as energy usage and safety of the supply are being addressed through new developments such as submersible netting systems. Conley points to Ocean Farm Technologies' Aquapod net pens as potential new equipment. The nets are submersible to withstand rough weather at sea, and also keep fish safe from predators and escapements.
Energy intensiveness is a challenge for land-based recirculating systems, but they also provide business advantages, says Conley, such as growing fish close to the market, the ability to harvest and deliver in the same day, a lack of predators and a high level of quality control.
TimberFish Technologies, a start-up company in Westfield, N.Y., that uses decaying plants and trees to provide food for invertebrates that will serve as fish food in a recirculating system, is hoping to address some of the water, energy and feed issues with its technology. As the fish feed on the invertebrates and produce waste, the waste is recycled back into the original tank that contains the decaying plant matter.
Jere Northrup, chief technology officer and co-founder of TimberFish, says they are currently running trials of the system at the Freshwater Institute in Shepherdstown, W.Va., using rainbow trout.
"But I think it could be applicable to other carnivore and omnivore species," says Northrup, such as salmon and catfish.
The TimberFish model, says Northrup, "addresses all the negatives of current aquaculture" ranging from energy use and environmental pollution to contamination and overfishing issues.
By bypassing grain-based feeds, Northrup says, the United States will get away from monoculture grain crops and expand land usage into areas that can be more productive.
An advantage of this type of recirculating system is it has a "high hydrolic retention time. Any [water] that comes in is recirculated many, many times," he explains. The degraded wood chips, which now come mainly from hardwoods, can also be recycled as an energy source.
Although in its early stages, Northrup says with the current climate for sustainable, locally grown food, "we have gotten quite a few people interested in this technology."
TimberFish wants to franchise or license its technology. "I think it has global applications," says Northrup.
Another sustainable option is integrated multi-trophic aquaculture (IMTA) in which several different aqua crops are grown in the same setting. For example, salmon, seaweed and mussels can all be farmed in the same space. The waste from the salmon becomes a renewable resource used by the seaweed and mussels, a proven system already at work in nature, he says. "We're just looking at natural systems to create a more efficient one," says Conley.
The business upside, he says, is more diversity, so if something impacts one portion of the system, the rest are there to provide economic stability.
Rubino of NOAA points out that salmon farmers in Maine and New Brunswick are already involved in IMTA, and there are models being developed in the Puget Sound region.
The United States has been a technology and innovation leader in some areas of marine aquaculture in the sea and on land, says Rubino. Oyster production is on the rise, he says, driven by a need to serve the half-shell market. And in both the Northeast and Pacific Northwest, projects are showing there is greater potential for developing mussel farms in open ocean conditions.
"We have a small, yet vibrant and vital marine aquaculture industry," says Rubino, "that has plenty of potential for growth." However, expansion is partly constrained by a cumbersome and uncertain regulatory process of overlapping local, state and federal permit requirements, he adds. "The question for communities and decision-makers is whether we want to take responsibility for growing the food we eat here at home."
NOAA is working on a new draft policy for marine aquaculture, which will be issued for public comment later this year, says Rubino. That will likely get NOAA more engaged in marine aquaculture, he adds.
Conley says both U.S. and Canadian fishing businesses have lamented what has happened to the commercial fishing industry through regulation and competition, yet they haven't looked at aquaculture as a viable business alternative.
The challenge for domestic aquaculture, says Randy MacMillan, president of the National Aquaculture Association, is multi-faceted, including the costs of production and processing, the natural resource barrier and consumer perception.
Both grain-based and fishmeal feed prices have risen in recent years, and U.S. labor costs are higher than those in other countries. The U.S. market is also highly regulated, he says, which ensures quality, but also drives up the price.
Freshwater aquaculture competes with other industries for access to natural resources as well, he says.
The business can be viable, says MacMillan, as long as consumers understand the value of the product produced here. Part of his organization's mission is to get that message out to buyers. "We need to get them to understand it's worth investing their discretionary dollars on domestically farmed seafood."
Contributing Editor Joanne Friedrick lives in Portland, Maine