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New Mexico Shrimp Company

Shrimp News Interviews Dr. Tracey Carrillo

 

   

 

On November 8, 2015, I interviewed Dr. Tracey Carrillo, Assistant Director of Campus Farm Operations at New Mexico State University in Las Cruces, New Mexico; and co-owner of New Mexico Shrimp Company in Mesquite, New Mexico.  Dr. Carrillo was in Silicon Valley to give a presentation at Fish 2.0, a business competition that connects sustainable fishing and aquaculture businesses with potential investors.  The event was held on the campus of Stanford University.

 

Shrimp News: Where did you grow-up?

 

Tracey Carrillo: In the southwestern United States, mostly in Texas and New Mexico.  I did my undergraduate work at Sul Ross State University in Texas and got my master’s and doctorate degrees at New Mexico State University.  My PhD was in Agronomy.

 

Shrimp News: What did you do for most of your career before you got involved in shrimp farming?

 

Tracey Carrillo: I spent most of my career in the cotton industry, looking at things like diseases, fiber quality, plant physiology and soil fertility.

 

Shrimp News: Why are you here in Silicon Valley?

 

Tracey Carrillo: I’m here for a competition called Fish 2.0, a program that brings entrepreneurs together with investors.  I’m one of 37 finalists—out of 187 applicants—that was accepted after a four-phase, seven-month, elimination process.  We will be competing for various cash prizes, door prizes and the opportunity to meet with investors.  We will be pitching our plans to a group of 300 individuals, most of whom are investors interested in the aquaculture industries.

 

Shrimp News: Will there be one overall winner of the competition?

 

Tracey Carrillo: No, during the seven-month evaluation process, we were separated into three tracks, A, B and C, and two categories, finalists and runners-up.  “A” is for start up companies, “B” is for companies that already have income, and “C” is for more seasoned companies.  I was a runner-up in track “B”.  At the competition, the finalists will give five-minute pitches and the runners-up will give 90-second pitches.  Prizes will be given to the top two companies in each track.

 

Shrimp News: How much prize money will there be?

 

Tracey Carrillo: $150,000 will be distributed in professional development prizes.  The big prize, however, would be to get one of the investors to invest in your business, but there is also the possibility of partnering-up with one of the other contestants in a new project, and there’s the potential of building networks with the other contestants and forming new businesses in the future.

 

Shrimp New: I’d like to hear your 90-second pitch.  Can you give it to me now?

 

Tracey Carrillo: Sure, here goes:

 

Did you know that 94% of the shrimp in the United States are imported, frozen, contain preservatives, or even antibiotics?  And our oceans cannot continue the depletion of our natural resources to meet demand.  Well we’ve discovered a new, unique, sustainable way to grow fresh, local, all natural shrimp indoors, year round.  With our process, you can literally grow shrimp in the desert.  My name is Dr. Tracey Carrillo with the New Mexico Shrimp Company, located in the desert southwest, a thousand miles from the nearest ocean.  Can you imagine having fresh shrimp no matter where you live?  We’ve created new technologies and in sustainable, recirculating saltwater production systems that work.  Our customers line up around our building before we open and rave about them, and restaurants can’t get enough.  We usually sell out in a few hours.  We currently have three licensed facilities and are here today seeking an investment of $250,000 to establish facilities in metropolitan regions in the United States.  Our goal—to establish a facility near every metropolitan region in the United States, where local farmers can get fresh shrimp right out the door to consumers.  We are the future of shrimp production.  Please come by and see us.

 

Shrimp News: What happens after your presentation?

 

Tracey Carrillo: There will be seven to eight minutes for questions and answers right after the presentation.  At that point, one of my associates will be on stage with me.  He’s more familiar with the financial aspects of our project than I.  I’m more on the production side of the business.  We’re hoping that some investors will want to take a look at our plan, invest in our core facility, or set up licensed facilities.

 

Shrimp News: Let’s talk a little about your current facility.  First, how did you get involved in shrimp farming?

 

Tracey Carrillo: Initially, as Assistant Director of Campus Farm Operations at New Mexico State University, I was looking into how to add value to cottonseed.  Conventional varieties of cottonseed have a toxin in them called “gossypol”, which makes the cottonseed less valuable as a feed ingredient.  Only dairy cattle can tolerate it to some degree.  It’s very high in protein, but because of the toxin, it doesn’t have much value.

 

Shrimp News: How high in protein?

 

Tracey Carrillo: 32% in the seed and 52% in a meal.  That’s why we began to look at how we might add value to it.

 

Shrimp News: Is it a well-balanced protein with all the amino acids?

 

Tracey Carrillo: Yes.  Its amino acid profile is very similar to soybean meal.  We were able to improve a gossypol-free variety of cottonseed, so now that protein is available for use in products for humans, pet feeds and aquaculture feeds.  We decided to look at how we could get the most bang for our buck from this new source of protein.  Of course, it would have the most value in human food, but we saw great promise in aquaculture feeds, so we decided to test it in aquaculture feeds, which our preliminary research showed were just below its use as a human food product by value.  We started looking at the consumption of fishmeal and the price of fishmeal and decided that the replacement of fishmeal with a plant-based protein in aquaculture feeds would be an excellent area to target.  Cottonseed right now goes for $200 a ton, and fishmeal goes for $2,000 a ton.

 

Shrimp News: Is there plenty of this new variety of cottonseed available to make aquaculture feeds?

 

Tracey Carrillo: There could be.  Right now, I think we’re the only ones, maybe with a couple of USA Department of Agriculture research folks, that are growing it.  We have about 100 acres planted in the new variety right now, and we’re trying to build-up our reserves of seed, but we’re also trying to improve the variety so it performs well in different regions of the United States and elsewhere.  Last year, we produced around fifty tons of gossypol-free cottonseed that we plan to evaluate in different feed formulations.  It could be a huge benefit to all of aquaculture, the licensees and to us.

 

Shrimp News: Have you made a shrimp feed with the gossypol-free cottonseed?

 

Tracey Carrillo: Yes, that’s kind of how we got involved with shrimp.  We were looking for test subjects.  We looked at fish, but chose shrimp because they develop quickly, making it easier to collect a lot of data, faster.  We set up a clear water culture system in a small wet lab and ran trials with fishmeal diets and gossypol-free cottonseed diets.  The growth of shrimp on the cottonseed diets was almost identical to the growth on fishmeal diets.  When we scaled up the trials to a couple of 16-foot round tanks, we got similar results.  At the end of each of these feeding trials, however, we had shrimp to sell, so we sent out an email to the college’s students and faculty, saying we had shrimp for sale, and the response was just overwhelming.  At the first sale, the customers—with coolers, waiting to buy shrimp—were there before we opened our doors.  That’s when we began thinking that shrimp raised on gossypol-free cottonseed meal could become a commercial venture, so we scaled up our research even more.  I wrote a proposal and got a grant to lease a warehouse and build a prototype shrimp farm.  We started out with twelve, ten-foot, round tanks and then scaled it up with four, sixteen-foot, round tanks.  Next, we started collecting data on our cost—like energy and feed—and started running economical models to see if it could be profitable.  And again, when we had shrimp to sell, we would sell everything within a couple of hours.  We always sold them at $15.00 a pound.  Walk-in customers never even batted an eye at that price because they knew the shrimp were as fresh as you could get them.

 

Shrimp News: Did that warehouse then become the New Mexico Shrimp Company?

 

Tracey Carrillo: No.  Next, we started working with the Arrowhead Business Center, a group associated with New Mexico State University that helps faculty and staff develop commercial businesses from research done at the University.  We took the idea for a shrimp farm to them, and they worked with us for about a year and a half.  At the warehouse where we did our research, we had to give our project a name so we chose “New Mexico Shrimp Company”, and it also became the name of the business that Arrowhead helped us develop.  Everything came together rather nicely because at one of the shrimp sales, an investor came in and said, “Tracey this is really a good idea, how can I get involved?”  And I said, “Funny you should ask because we’re looking to commercialize this through the Arrowhead Center.”  Well, he invested in the business and became my co-partner.  His name is Rod Rance, a businessman from Indiana who was wintering in New Mexico at the time.

 

Shrimp News: Is your current farm in the research warehouse or at another location?

 

Tracey Carrillo: It’s at another location.  The grant that we used to lease the warehouse ran out after two years, so we ended up building a brand new facility—an insulated 9,000-square-foot metal building—just south of Las Cruces.  We have eleven 8,000-gallon tanks and four nursery tanks.  It’s pretty simplistic.  In the nursery tanks, we feed Artemia and commercial hatchery feeds from Zeigler Bros., Rangen and Cargill.  We aerate the tanks with blown air through bubble-up diffusers.  At about PL-10, we move them to the growout tanks.  Stocking densities depend on what we think the market will want at the time of harvest.  If we plan to market animals smaller than 30-count per pound, we stock more PLs.  If we plan to market animals larger than 20-count per pound, we stock fewer PLs.  That’s part of the beauty of the system; you can stock according to what the market demands.

 

Shrimp News: How do you establish the bioflocs in your tanks?

 

Tracey Carrillo: The bioflocs just appear naturally.  We don’t add anything but the shrimp and the feed.

 

Shrimp News: Do you ever have too much biofloc?

 

Tracey Carrillo: Sometimes we remove some waste from the tanks and run it through an aquaponics system, but there are not a lot of waste products from our systems.  We’ve developed proprietary equipment to circulate and aerate the water.  What’s nice about being close to the University is that we have access to engineering and marketing students at various colleges and at the Arrowhead Business Center that work on problems and issues for us.  For example, a group of students is now working on an automatic feeder that will increase the feeding rate as the shrimp grow larger.

 

Shrimp News: What’s the maximum production out of one of the eight-thousand-gallon tanks?

 

Tracey Carrillo: Again, it depends on stocking density.  We plan to set up some of our tanks for partial harvests, harvesting small shrimp first and then letting the remaining shrimp grow larger.  On average, we hope to get four to five hundred pounds of shrimp from each tank every four to five months.  With partial harvests, we think we can consistently get three crops a year, and if we harvest smaller shrimp, we can get up to four crops a year.

 

Shrimp News: Ok, lets say you get 1,200 pounds of shrimp from each tank every year.  Multiply that by 11 tanks and $15 dollars a pound, and it comes out to about $200,000.  Is that about right?

 

Tracey Carrillo: Yes, that’s a pretty good rough estimation.  Our cost of production has been ranging about $8.00 a pound, and we think we can whittle that down, especially with the feeds that we are developing.  Also, as we refine our protocols and increase our production, we think we can lower our production costs significantly.  We also plan to add aquaponics to the system, which would increase our revenues and profits.  There are several ways we can go with additional revenue streams.  Frequently, the people who come out to our farm don’t have ice or coolers.  We think we could make a nice profit from selling ice and coolers.  We have looked at wax-lined, portable, cardboard coolers that people could take to a tailgate party.  Seasonings, or even dried shrimp, are other possible products.  We’re also looking at using the wastes that come out of the system to grow vegetable crops.  Sea asparagus, for example, it looks like grocery-store asparagus, but it grows in salt water, has a nice salty taste and sells for $7 a pound.

 

Shrimp News: In addition to your cottonseed feeds, what other feeds are you using and where do you get them?

 

Tracey Carrillo: We use Zeigler, Rangen and Cargill growout feeds.  Right now we’re running tests on all our feeds to see if they have any compounds in them that would affect production or lower our water quality.

 

Shrimp News: Which water quality parameters do you check on a daily basis?

 

Tracey Carrillo: We look at temperature, oxygen, alkalinity, pH, nitrates, nitrites, ammonia—and the biofloc.

 

Shrimp News: Tell me about the software you developed to manage your tank farms.

 

Tracey Carrillo: It’s a nifty package called Aqua Doctor.  Basically you input your water quality data into it, and with some algorithms that we developed, it will spit out a management decision.  For example if your ammonia levels are too high, it will suggest adding a certain amount of carbon to the water.  What’s nice about Aqua Doctor is that it tracks all your inputs, so it will even tell you what your profit margin is going to be.  It has a library associated with it that contains how-to documents, videos, operating procedures, everything you need to run a farm.  It keeps track of multiple tanks.  It has several modules that allow you to track the development of the shrimp.  It’s web-based, up there in the cloud, so licensees can access it at any time.  We include it in our licensing package.  We’re attempting to create a model that an investor could use to build a facility according to our design and get started immediately.  The software developer who created Aqua Doctor is one of our licensees, so he has hands-on experience with our system and can make quick changes and updates to it.  He has three years of our data programmed into the software.

 

Shrimp News: Tell me how you license your technology.

 

Tracey Carrillo: It’s almost like a franchise, except our licensees own their shrimp farms.  There’s a licensing fee and we get two percent of their gross sales.  We provide on-site training for all of their employees.  They can come to our facility and spend as much time as they want with us, all included in the licensing fee.  We give them a list of all the equipment they need to start a farm, along with a list of vendors that supply the equipment.  We’ve even negotiated with some of the venders to give our licensees discount prices.  We have already licensed three facilities, two in New Mexico and one in Massachusetts, and about six others are preparing financial documents to apply for licenses.  We have arranged financial assistance so an individual can get started with little upfront capital.

 

Shrimp News: Do all the licensees plan to build farms with 11 tanks?

 

Tracey Carrillo: No, there’s no limit to the number of tanks.  Some licensees are going to start with five tanks, and some are going to start with twenty tanks.  One guy has an empty warehouse, and he wants to put forty tanks in it.  It will be a complete, turnkey package.

 

Shrimp News: Are farmers lined up to produce the gossypol-free cottonseed feed?

 

Tracey Carrillo: No, that’s a bit of a quandary right now.  Farmers are not going to grow it until there’s some demand, and the feed companies are not going to use it unless there is a supply.  Right now we’re looking at cottonseed increasing from a waste product at $200 a ton to a useable product at $800 a ton, which should encourage cotton farms to plant more of it.  Compared to fishmeal at over $2,000 a ton, it would still be a real bargain.  Ultimately, it could help all of aquaculture because fishmeal is such a limited resource.  Another neat thing about the cottonseed we’re growing is that it’s all natural.  None of it is genetically modified and it can be grown organically.

 

Shrimp News: On November 13, 2015, after Carrillo returned to New Mexico, I called him to see how he did in the Fish 2.0 competition.

 

Tracey Carrillo: We [one of his associates was also involved in the presentation] didn’t win first place, but we may win other professional development prizes when the official standings are released in December 2015.  After our presentation, however, we were approached by five or six investors, and we’re pretty sure a couple of them will license our technology.  That alone made the whole adventure worthwhile.  In addition, the networking with other participants in the competition may prove more beneficial than the potential licensees.  We might sign a contract with one of them to distribute its equipment, and another one is interested in using our technology to grow shrimp at its inland fish facility.  Overall, it was a great experience for us, and we picked up a ton of good information on how a small company like ours might finance its operations.

 

Information: Dr. Tracey Carrillo, Assistant Director of Campus Farm Operations, College of Agricultural, Consumer and Environmental Sciences, Agricultural Experiment Station, MSC 3BF, P.O. Box 30003, New Mexico State University, Las Cruces, New Mexico 88003, USA (phone 1-575-646-3125 and 4126, cell phone 1-575-639-5110, fax 1-575-646-4125, fax 1-575-646-8137, email tcarrill@ad.nmsu.edu, webpage http://www.nmsu.edu).

 

Information: Dr. Tracey Carrillo, New Mexico Shrimp Company, 705 Sequoia Drive, Mesquite, New Mexico 88048, United States (phone 1-575-639-5110, email tracey@freshmarketshrimp.com, webpage http://freshmarketshrimp.com).

 

Source: Bob Rosenberry, Shrimp News International, Palo Alto, California, November 19, 2015.

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