reLAKSation 78.
200,000 tonnes? With wild cod stocks under threat from over-fishing, predictions of up to 200,000 tonnes of farmed cod by 2010 should be good news for consumers looking for a continued supply of cod and chips. Fish Farming International reported that Dr Reid Hole of Nutreco had projected that such tonnages were possible if expected juvenile production came to fruition. By 2015, cod production could even reach 700,000 tonnes.
Yet whilst those involved in this fledgling cod industry are clearly in a buoyant mood, there are increasing concerns about the economics and financing of these new ventures. According to Intrafish, there is a lack of private risk capital for commercial cod farming in Norway. The R&D Director of Fjord Marine, Reinhold Fieler said that ‘the commitment does not reflect the vision’.
It is understandable that investors who have seen a returns on salmon farming decline could now be concerned that cod may not produce sufficient return on investment with more lucrative returns to be made elsewhere. Mr Fieler suggests that cod farmers may not be able to produce fish at current market prices and this implies that investors may therefore struggle to obtain any return.
Although the fledgling cod industry must have looked closely at the economics of cod production, there are concerns that cod farming will not follow that the model set by the salmon farming industry. Farmed salmon initially commanded a high market price, reflecting salmon’s luxury market image. However, as production soared, prices declined rapidly. Fortunately, salmon farmers were able to reduce the cost of production in line with falling prices and so maintain some form of margin. This may not happen with cod.
Firstly, cod does not have the market cache that salmon had when salmon farming first began. There are some commentators who have said that farmed cod should be able to command a premium over wild, but with salmon, wild fish have always been more expensive than farmed. The first batch of farmed Scottish cod did sell at £12.99/kg at a time when wild fish were selling at between £6.99/kg and £8.99/kg, but these fish were sold through Marks & Spencer whose prices are typically higher than those of the other major retailers. M&S customers are usually less sensitive to prices than the majority of other fish buyers.
Secondly, cod farmers may find it difficult to slash the cost of production in the same way that the salmon industry has been able to do. This is because of the high cost of juvenile production. When salmon fry hatch, they have a large yolk sack on which they can feed. Once this is absorbed, the fry are large enough to take manufactured feed. This means that salmon hatcheries are relatively simple to manage and cheap to operate. By comparison, marine fry are microscopic when they hatch. This is due to their different reproductive strategy to that of salmon. Marine fish produce millions of tiny eggs with the hope that one or two will survive to adulthood. Salmon invest more effort into their young so lay fewer much larger eggs, increasing the chances of survival. As a result, marine fish fry require much longer care in the hatchery including a supply of microscopic live food needed to bring them to a size at which they are capable of consuming manufactured food.
Marine fish hatcheries are much more complex and much more expensive to run and until this bottleneck can be overcome, the opportunities to reduce production costs are much lower.
The evidence of this can be seen from the sea bream and bass industries, which have found it much more difficult to cut production costs as prices have declined. The price of farmed cod may therefore never be cheap.
Unfortunately, high prices may deter many consumers. Although cod is perceived to be the national British fish, rising prices have induced many consumers to seek cheaper alternatives. Salmon has been one of the main beneficiaries with a significant growth in consumption as that of cod has declined. According to Seafish, cod consumption has declined by 23% up to the year 2000, whilst salmon has increased by 91%.
Alistair Barge, Chairman of the British Marine Finfish Association told Intrafish that farmed finfish could offer a valuable lifeline to the UK fish processing industry, who have seen a downturn due to the decline in wild fish stocks. Yet, whilst there may be extra capacity, processors also need low cost fish in order to maintain their margins. Farmed cod may well be too expensive for such hard-pressed processors, who might find relief from other cheaper farmed species.
The decline in wild stocks and a huge potential market make cod a very exciting prospect for farming, however if farmed cod is to satisfy market demand, then the fledgling industry needs to focus on overcoming the bottleneck of high cost juvenile production.
Feed to all! There has been a great deal of discussion about removing the fishing pressure on stocks of commercial marine fish. However, there is also a significant industry catching fish for industrial use, which may have an even greater impact on marine fish stocks. Whilst of little interest for human consumption, industrial fish are an important source of food for other fish and marine life.
The bulk of industrial fish is destined for the production of fishmeal and oil, which are important constituents in most aquaculture feed. As fish farming increases, there will be increased pressure on industrial fish stocks and hence there is a move to look for viable alternatives for use in fish feed manufacture. The general public has now been invited to have their say about such replacements through Nautilus Consultants and the Institute of Aquaculture at the University of Stirling. According to Intrafish, the hope is that these views will form a solid foundation for a more informed policy, strategy and decision making.
Whilst fish feeds certainly account for a large usage of fishmeal and fish oil, they are by no means the only user of these ingredients. Fishmeal is used extensively in both specialist poultry and pig feeds throughout the world. They provide high levels of limiting amino acids and promote rapid growth, especially at a time when there are increasing moves to remove growth promoters from these feeds. Whilst, it makes sense to question the levels of fishmeal used in fish feed manufacture, it would make even greater sense to reduce the usage of fishmeal in the wider agricultural sector, releasing more for feeding to fish with a more carnivorous food requirement. Of course not all fishmeals are of the same quality, but surely, a poorer quality fishmeal must still be better than feed made from a vegetable source.
This is an issue, which extends much further than the confines of the aquaculture industry and one to which this forum should address.