Shrimp Farming Basics

 

WE DO NOT INVEST AND DO NOT FIND INVESTORS

ALTHOUGH WE CAN HELP INVESTORS BETTER UNDERSTAND THE RISKS OF INVESTING IN AQUACULTURE  

 

Farming shrimp for profit is similar to any other agribusiness except that the crop is underwater.  This introduces many variables that are unique to working in water.   Not being able to see your animals and having to rely on external indicators of overall productivity is an element of the overall risk.

 

There are several very important steps that you should take before you even think about digging that first hole in the ground or constructing a RAS system indoors or whatever production approach you have elected to take.


To start a farm you'll need, at the very least, the following: 

  • Starting capital that is consistent with establishing a viable operational framework for successful production. 

  • A location that minimizes the costs of environmental control and maximizes the chances of being successful.  

  • A preferred species to work with.  Access to seed, feed, processing capabilities, etc.

  • The nature of and access to the market you are selling into.  

 

 

Like any other business endeavor, it is important that you know about how much money you will need and that you have access to as much of it as you can prior to starting.    Many operations fail because they run out of money before they can generate cash flow or because the owners have not set aside additional capital as insurance.   How much money you need depends on where, what, when, the overall scope and time till harvest and selling the first crops and a number of other variables.  

You will need a location for your operation. You will need access to water.  Preferably clean (fresh, brackish and/or salt water) and in the temperature range that your crop thrives the best at.  The water must be chemically suitable and free of pesticides, herbicides, heavy metals and other possible contaminants that will affect the ability of your animals to grow.

 

You will need to get the appropriate government permits for the land use, discharge permits, etc. These vary from country to country, state to state, district to district, etc.  You also need to be sure that you can legally import the seed stock (nauplii or post larval shrimp) or broodstock if they are not present in country.  The closer you are to the ideal site in terms of what you need, the better off you will be. This requires a knowledge of the physical geography of the area, the types of ecosystems that are present, access to the water and a myriad of other resources among many other things. Rarely is it simply a matter of putting animals into the water and harvesting a crop, although many are familiar with the "honeymoon effect"; first crops are great.    

What species are you going to farm? Globally there are many farmed species of crustaceans.   The highest annual production is of the white shrimp, Litopenaeus vannamei (also still known as Penaeus vannamei), with almost 4 million MTs a year being produced in 2018. Next is the tiger shrimp, Penaeus monodon, with almost one million MTs a year and then in a strong third position is the freshwater prawn, Macrobrachium rosenbergii.  Where are you going to buy the seed stock that you need from and how are you going to bring it to the site?   Will you need to produce your own broodstock? 

Perhaps the most important aspect is that you understand and know your market. Presumably, you want to do this to make more money than you spend, i.e. run a profitable business. Where will you sell your crop? In what form (filet or whole for fish, heads on or off for shrimp are examples)?

Where will the feed come from? Feed costs can be a significant component of your costs of production. How much depends on what you are producing, where you are growing it, stocking densities, the presence of pathogens and stressors and many other things. All feed is not equal and far too many feed companies seem to be more about profits than making sure that the farmer is supplied with the most economical diets. This is not just about the price of the diet. High quality highly digestible diets may cost more per kg but under the right conditions less is needed to produce a kg of shrimp.   Novel ingredients can be used to reduce the overall cost of feeds. 

With these in mind, you have what you need to know to generate a business plan and seek investors to help your dream become reality.

You will need to pay for shrimp seed, fertilizers if needed and shrimp feed. Buying on credit adds to the cost of production and thus lowers your profit margins. The amount of capital that will be needed is related to the size and scope of the project.  Using borrowed money is risky as farming can be volatile and as with all high risk endeavors interest rates can be very high.    

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