Marine Aquaculture Economics

Since 1990, Dr. Benedict C. Posadas has consistently developed and maintained the Mississippi State University (MSU), Coastal Research and Extension Center’s (CREC) extension and research (R&E) program in economics with an emphasis on the following major areas. 

The choice of the R&E focus areas was motivated by the information needs of the coastal communities and residents, marine, horticultural and coastal-related industries, business establishments and organizations, and state and federal regulatory agencies. The specific mandates of the state and federal funding initiatives dictated some of the directions of R&E programming efforts.

The CREC’s horticulture and marine resource economics (HMRE) extension and research programs during the past one and one-half decades were made possible by additional extramural funding from state and federal funding agencies totaling more than five million dollars. Several requests of regional, national and international agencies and media organizations to participate in committees, workshops, conferences, collaborative efforts, and press releases demonstrate the extent of the usefulness and recognition of the HMRE programs conducted by Dr. Posadas.

AQUACULTURE

Catfish Surimi Processing – 2018-2021:
http://gomos.msstate.edu/Catfish-surimi.html

Working with seafood scientist (Dr. Sam Chang) and chemical engineer (Dr. Santanu Kundu), Dr. Posadas started creating a hypothetical surimi processing plant using results of previous studies performed at the MSU Experimental Seafood Processing Laboratory and analysis conducted by faculty and staff at the MSU Department of Agricultural Economics. This is a three-year project externally funded by the U.S. Department of Agriculture, National Institute of Food and Agriculture. Dr. Posadas devotes 13.33 percent (5.33 hr/wk on Fridays) of this time to perform the tasks outlined in the project proposal starting on July 1, 2018.

Catfish processing generates byproducts consisting of heads, guts, skins, and frames. These byproducts are generally sent to rendering plants, sold to pet food companies or could be used to produce fish meal. The entire catfish industry sold 320.174 million pounds of live catfish in 2016. In catfish fillet processing, approximately 60% of the whole catfish is the by-product, which would translate into more than 190 million pounds of byproducts. Since Mississippi growers produced 54% of all live sales, catfish processing byproducts in 2016 could be more than 100 million pounds.

The results of this research will provide an economic opportunity for the catfish industry to convert processing waste products into safe and domestically-produced surimi products. The expansion in the processing activity in the catfish industry will provide more employment and income opportunities in the rural communities in the catfish-growing areas. Furthermore, this processing system, after appropriate adjustments can be applied to other foodfish species grown in the United States. Overall, the production of surimi from byproducts of foodfish processing reduces wastes and expands economic opportunities in rural America.

The overall objective of this economic analysis is to evaluate the economic potential of producing surimi from the byproducts of catfish processing. Specifically, it aims to achieve the following objectives:

  1. To estimate the potential supply of catfish processing byproducts suitable for surimi production.
  2. To evaluate the economic and financial feasibility of producing surimi out of catfish processing byproducts.
  3. To develop optimal economic models of surimi production systems subject to supply and technological constraints. 

The aquaculture publications and presentations of Dr. Posadas are listed at http://coastal.msstate.edu/aquaculture-economics-publications and http://coastal.msstate.edu/aquaculture-presentations.  

Softshell Blue Crab Pond Production, 2018-2021:
http://gomos.msstate.edu/crab-softshell.html  

Working with crab scientists, specialists, and producers in Mississippi and North Carolina, Dr. Posadas started creating enterprise budgets for softshell blue crab pond grow-out systems in November 2018. This is a three-year project externally-funded by the National Oceanic and Atmospheric Administration (NOAA), National Sea Grant Program. Dr. Posadas devotes 15 percent (6 hr/wk on Thursdays) of this time to perform the tasks outlined in the project proposal starting on November 1, 2018.

The U.S commercial softshell blue crab landings had drastically declined since 2000. This decline in commercial softshell blue crab landings radically altered the domestic market situation for blue softshell crabs. The ex-vessel prices of blue softshell crab have been persistently increasing over the years, with a marked increase during the last five years after the recession and the Gulf of Mexico oil spill. The overall objective of this economic analysis is to evaluate the costs of producing blue softshell crabs in the pond grow out production system. Specifically, it aims to achieve the following objectives:

1.    To estimate the investment requirements and ownership costs of producing blue softshell crabs in pond grow out production system.
2.    To evaluate the operating costs of producing blue softshell crabs in the pond grow out production system. 
3.    To develop optimal economic models of softshell blue crab production systems subject to supply and technological constraints.  

The evaluation of the costs of pond grow out of blue softshell crab in the Southern United States will be based upon a hypothetical commercial pond production system (CPPS) using pilot test results and commercial production practices in Mississippi and North Carolina. Operating costs will be estimated based on recommended management practices, biological knowledge of the species, estimated input usage and prices. A detailed description of the type, number, and costs of land, pond construction, machinery, and equipment necessary for the base CPPS model will be developed. 

The aquaculture publications and presentations of Dr. Posadas are listed at http://coastal.msstate.edu/aquaculture-economics-publications and http://coastal.msstate.edu/aquaculture-presentations

Economic Impacts of Aquatic Animal Diseases, 2016-2021:
http://coastal.msstate.edu/aquatic-animal-diseases 

With funding from the International Institute, Dr. Posadas developed and presented a method to assess the socioeconomic impacts of aquatic animal diseases at an International Workshop organized by the United Nations, Food and Agriculture Organization in South Africa in October 2016. Aquatic fish diseases create economic hardships among fish farming households and owners and operators of backwardly- and forwardly-linked businesses. Economic recovery requires long-term remedial measures to restore healthy and productive fish populations and allow the resumption of harvesting, processing, distribution, and consumption of fish products. Estimates of the adverse socio-economic impact of aquatic animal diseases are necessary information to justify the implementation of appropriate government programs for the fish farming industry. 

The overall goal of this project is to develop a methodology for assessing the economic impacts of aquatic animal diseases and estimate the adverse effects of aquatic fish diseases. The major tasks involved in evaluating the adverse economic impact of aquatic animal diseases are as follows:

  1. Identify the types and causes of mortalities of aquatic animals.
  2. Compile estimates of mortalities associated with aquatic animal diseases.
  3. Compile estimates of annual production and values of aquatic animals.
  4. Estimate direct economic losses due to aquatic animal diseases.
  5. Measure the economic impacts of aquatic animal diseases.  

The aquaculture publications and presentations of Dr. Posadas are listed at http://coastal.msstate.edu/aquaculture-economics-publications and http://coastal.msstate.edu/aquaculture-presentations

Offshore Aquaculture Production Systems, 2001-2009:

This project was funded by the Mississippi-Alabama Sea Grant Consortium in 2001-2009. Working with Gulf of Mexico Offshore Aquaculture Consortium (OAC) aquaculturists, engineer, and scientists, Dr. Posadas developed a hypothetical commercial offshore aquaculture production system (COAPS) in the Gulf of Mexico.  

An offshore aquaculture industry in the
Gulf of Mexico
will never exist if this innovative business venture does not make economic sense. To more fully understand the economic potential of offshore aquaculture, that can also be effectively managed as determined by the OAC researchers, Dr. Posadas created a model to analyze the OAC hypothetical offshore aquaculture production system. This model is based on present expectations of technology and logistics mitigation of offshore grow-out, the biology of suitable species, recommended usage and costs of inputs, and established ex-vessel fish prices. Simulation results of each candidate species (i.e., cobia, red snapper, and red drum), with enhanced market value and improved growth rates over wild fishery data, and twelve cages having fish stocked at 30 kg/m3 indicated a favorable investment project with positive net present value and internal rates of return. Given these favorable results, Dr. Posadas conducted further economic analyses to determine the potential economic impact of an offshore aquaculture industry on the local economy.

The aquaculture publications and presentations of Dr. Posadas are listed at http://coastal.msstate.edu/aquaculture-economics-publications and http://coastal.msstate.edu/aquaculture-presentations

Saltwater Shrimp Production Systems, 2001-2005:  
http://coastal.msstate.edu/shrimp-production-systems

This project was conducted in collaboration with the University of Southern Mississippi-Gulf Coast Research Laboratory. This assessemt was mandated by U.S. Congress to enable the domestic shrip farming industry to take off. The program received long-term funding to support its research activities. The overall goal of this project is to evaluate the feasibility of each biosecure marine shrimp production system developed by the member institutions of the U.S. Marine Shrimp Farming Program.

The development of modular indoor shrimp production systems is desirable for bio-security against shrimp diseases. In addition, such systems can be located inland, away from coastal sites that may be infected with shrimp viruses. Mobility of site location can also provide a quality shrimp supply to regions with high consumer demand. If enclosed bio-secure shrimp production systems are economical to operate they will have a future in the U.S.

Many years of research have resulted in viable indoor, bio-secure shrimp production facilities, but production cost estimates and financial measures of success are needed to analyze a diverse set of alternative rearing schemes and assist investors in their decision-making process.

The aquaculture publications and presentations of Dr. Posadas are listed at http://coastal.msstate.edu/aquaculture-economics-publications and http://coastal.msstate.edu/aquaculture-presentations

Freshwater Prawn Alternative Production Systems – 1999-2005: http://coastal.msstate.edu/freshwater-prawn-production

The MSU-Coastal Research and Extension Center in cooperation with the International Custom Pack, Inc.-Aquaculture Division, MSU-Department of Wildlife and Fisheries, MSU-Aquaculture Research Unit, Land O'Lakes Farmland Feed LLC, and a local freshwater prawn producer conducted five-year experiments using alternative production systems for freshwater prawn. Working with aquaculturists, feed manufacturer, and local producer and processing plant, Dr. Posadas designed the experiments, arranged free supplies of feed and post-larvae, monitored the ponds and prawns, analyzed the results and evaluated the economic viability of these production systems. He presented the economic results to grower meetings and international aquaculture conferences.  At its heights in 2002, the industry grew to about 250 growers with more than 1,200 acre under culture.

The aquaculture publications and presentations of Dr. Posadas are listed at http://coastal.msstate.edu/aquaculture-economics-publications and http://coastal.msstate.edu/aquaculture-presentations

Use of Constructed Wetlands in Catfish Production – 1992-2000: http://coastal.msstate.edu/constructed-wetlands-finfish

Working with an estuarine ecologist and aquaculturists, Dr. Posadas evaluated the use of constructed wetlands in improving pond water quality and assessed the associated benefits and costs in intensive finfish pond production. The U.S Department of Agriculture, National Research Initiative and the U.S. Department of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service funded this multi-year project.

Results of experiments using constructed wetlands at the Mississippi State University-Coastal Aquaculture Unit (MSU-CAU) were used to evaluate the investment and operation costs of integrating different sizes of constructed wetlands in recirculating catfish pond production. To create the commercial pond-wetland systems used in this analysis, each wetland was placed adjacent to each of the ponds used in catfish production. Hypothetical recirculating catfish production systems consisting of six 3.24-ha ponds and six 0.489-, 0.809- or 1.134-ha constructed wetlands were evaluated. Higher investment and operating costs were required for catfish production systems with larger constructed wetlands.

The aquaculture publications and presentations of Dr. Posadas are listed at http://coastal.msstate.edu/aquaculture-economics-publications and http://coastal.msstate.edu/aquaculture-presentations