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Shrimp Farming in Texas, Hawaii and
South Carolina in 1990


At Fish Farming Expo-III\, Aquaculture Digest chaired a seminar titled “Shrimp Farming in the United States: Bonanza or Blackhole?”.  Although the bonanza/blackhole question gets answered, a better title would have been “The Status of Shrimp Farming in Texas, Hawaii and South Carolina”.  What follows is an edited transcript of the seminar, plus some additional information.





George Chamberlain: An aquaculture specialist with the Texas Agricultural Extension Service, George works with a wide variety of aquaculture species, but specializes in shrimp reproduction and growout.  His primary job is helping aquaculturists start farms and improve the efficiency of their operations.  He routinely assists commercial shrimp farmers with hatchery and growout problems and has consulted on shrimp farming projects around the world.


James Wyban: Working at the Oceanic Institute in Hawaii, Jim is the principal investigator of the United States Department of Agriculture-funded project entitled “U.S. Shrimp Farming Program”.  He investigates and develops technologies that will make shrimp farming profitable in the United States.  He thinks “intensive” high-density systems offer the most practical approach to shrimp farming in the United States.  Jim owned and operated a commercial fish farm in Hawaii from 1981 to 1985.  At OI, he designed and managed the construction of several prototype round shrimp ponds, a prototype shrimp maturation facility and a research shrimp hatchery.


Steve Hopkins: Manager of South Carolina’s James M. Waddell, Jr., Mariculture Research and Development Center, a demonstration facility that encourages private sector aquaculture, Steve dedicates a large portion of time to helping South Carolina’s new shrimp farming industry make a profit.  His career objective: “to make a significant impact on the development of profitable shrimp farming in the Americas through research and development or through a commercial venture.”



The Seminar


Shrimp Farming In Texas (George Chamberlain): I’m going to paint a picture of the Texas shrimp farming industry.  You’ll notice a number of milestones in the picture.  As the industry passed each of the milestones, it thought it had arrived in the Promised Land, only to discover another milestone over the next hill.


One of the first milestones for the research community was learning how to rear shrimp through the mysterious larval stages.  The Galveston Laboratory of the National Marine Fisheries Service gets credit for developing a successful larval rearing system in the early Sixties.  Pioneered by Harry Cook and later by Corny Mock, the “Galveston Method” involves the capture of wild, pregnant, female shrimp and spawning them at a hatchery.  They spawn almost automatically, and the eggs hatch into nauplii.  The challenge was to raise those little, non-feeding nauplii through the next two larval stages--where feeding is critical.  Various types of algae feeds and various types of culture system were tested.  Over time, the lab developed a dependable method for producing postlarval shrimp.  Postlarvae are large enough to be distributed for scientific work and stocked in ponds.  And, indeed, several small shrimp farms began at that point.  This was in the early Seventies.  Dow Chemical, for example, was very excited about it.


About the same time, shrimp farming was also getting started in Ecuador and other parts of the world.  We were able to get Penaeus vannamei,  a species from South America, and compare it with our local white shrimp P. setiferus.  Vannamei  won the contest!  Therefore, the next milestones had these messages attached to them.  “Spawn vannamei in captivity,” “Control its life-cycle”, “Make it available to farmers.” We spent almost ten years on laboratory work on shrimp maturation.  And the milestones rolled by.  “How do those shrimp spawn offshore?”  “What induces them to spawn?”  “How can we control spawning in captivity?”  Private labs developed the techniques, but the information remained proprietary for several years.  Eventually, it was published.  The method involves eyestalk ablation to induce maturation and the correct blend of feeds and environmental conditions.


In the early 1980s, the shrimp’s life cycle was brought under control, and, within a year, Laguna Madre Shrimp Farms built the first large shrimp hatchery in south Texas, near Brownsville.  It’s still the only hatchery in Texas, and currently supplies seedstock to farms in Texas and South Carolina.


With the availability of postlarvae, a number of shrimp farms started operations in the early 1980s.  At first glance, the bays along the Texas coast appear to be ideal for shrimp farming, but that’s not the case.  Each has its own characteristics in terms of river inflow and salinity.  Some tend to go abruptly fresh when it rains.  Matagorda Bay, however, is a good bay for shrimp farming.  There are already four shrimp farms on its shores.  Other farms locate as far south as they can to take advantage of the longer growing season.  Unfortunately, the southern most bay system, the Laguna Madre Bay System, tends to be high in salinity.


The first facility to go in was the Laguna Madre Shrimp Farm.  Ocean Ventures near Port Lavaca was also an early entrant.  It uses two-acre ponds with aeration.  They have plastic baffles in the ponds to improve the water circulation.  Another farm started operations in a natural impoundment on Galveston Bay.  It bought wild shrimp, stocked them in the impoundment and harvested them as adults.  It did very well in terms of production, but the pond was never equipped to drain, and they had a devil of a time getting the shrimp out.  It did not survive.


Guffey Seafood Farms is located on Copano Bay.  Guffey uses square, five-acre ponds with a center drain.  The Army Corps of Engineers Project is in South Texas, almost on the Mexican border.  It has two 100-acre impoundments.  The King Ranch facility was located near Corpus Christi.  It was built in a very sandy area with seepage problems.  The 20-acre ponds never produced well.  There were mysterious problems, probably related to the soils.  Port Lavaca Plantations is one of the farms on the Matagorda Bay.  It has seven-acre ponds and lots of drain pipes to pull off wastes.  It uses paddlewheel aerators and gets the best production in the state.  Harold Bowers just completed his farm on Matagorda Bay.  It’s about fifty acres at this point.  He stocks at rather low densities.  This was his first year.  He did about what he expected to do, around 1,000 to 1,500 pounds per acre.


Finally, there are some farms in West Texas, far removed from the coast, several hundred miles inland, out in arid, desolate West Texas.  They use saline ground water in the Pecos River area.  Genesis Aquaculture uses one-acre ponds.  Charles McKaskle also uses one-acre ponds.  Both are pilot-scale facilities, fairly small, testing whether the water will work.  They are getting moderate yields, nothing great at this point.  But if it works, the opportunity is tremendous because there are literally millions of acres of very cheap property in West Texas.  Water quality is the big question.


Although we have had several low-density, extensive farms and some semi-intensive farms, the trend is toward intensive farms.  These tend to use small ponds, tight management, aeration, high quality feeds and, in some cases, waste removal.  They probably have the best future in the state.  However, there are opportunities for all types of production.


Up until 1989, Texas shrimp farmers produced around 2,000 pounds per acre per year.  In 1989, they averaged 2,700 pounds per acre.  Most farms rely on paddlewheel aerators, or some type of aerator, to mix and stir the water, not just to oxygenate it.


Researchers want to determine what’s going on on the pond bottom.  Much of the waste on the pond bottom, if it’s not exposed to oxygen, can be converted to hydrogen sulfide, which is very toxic to shrimp.  Of course, if the waste is exposed to oxygen, then the decomposition just leads to carbon dioxide, which is innocuous to shrimp.  Allowing organic material to pile up on the bottom is a major problem in saltwater ponds where there’s plenty of sulfate.  One way of preventing it from accumulating is by creating water currents that scour the bottom and keep the waste tumbling around so that it can be exposed to oxygen.


We measure flow rates around the perimeter of the pond, at various distances from the paddlewheel aerators to see what kind of flow rate the paddlewheels create.  At Port Lavaca Plantations, they use a ten-horsepower paddlewheel aerator in opposite corners of their seven-acre ponds.  The flow rates diminish from about 0.8 feet per second down to 0.25 at the far end of the pond, but at least they’re getting flow all along the thousand-foot length of the bank.  The other paddlewheel in the pond, which is probably submerged a little deeper, produces an initial flow rate of 1.2 feet per second.  The center of the pond gets no circulation, so wastes accumulate there.  We’ve tried to work on more efficient ways of moving that water.  We’re convinced that one way is with a large slowly rotating, underwater fan, something like a ship’s propeller, but this technique is still experimental.


There are lots of little things that cause problems on shrimp farms.  Feed is one of them.  One very simple problem is feed storage.  It should be stored off the floor on pallets.  Some of our farms have made the mistake of putting it right on the floor, sometimes in bulk.  Mold and rancidity problems develop, especially in the summer.  It’s a very simple problem and very easy to correct.


Some farms feed once a day, around the edge of the pond.  Other farms go to great lengths to blow the feed across the entire pond, and they do it two or three times a day.  It results in better feed conversion ratios.  The use of feeding trays is also catching on in Texas.  Farmers place a little feed on a tray, submerge it right after feeding the shrimp and then check it an hour later to see how much has been eaten.  It’s one of the only ways to determine if you’re feeding too much or too little.  If it’s all gone, then you increase the amount of feed a little.  If there’s a lot left on the tray, then you back off on the feed.  You continually adjust it day-by-day.


Another major issue in the state is the quality of postlarvae.  Sometimes it’s good, sometimes it’s bad, sometimes it’s dead on arrival.  Shrimp viruses were brought into Texas this year, causing some major regulatory problems.  The State of Texas did not know how to deal with them, especially baculovirus in P. vannamei.  The State worried about the effects on the commercial shrimp fishery.  Another concern: the IHHN virus could be loose in the state.  Small, stunted shrimp may be infected with it.  So now there’s a new emphasis on trying to get viral free shrimp, to get maximum growth, to get consistently large shrimp at harvest.


Most farms use as much water exchange as possible.  Unfortunately, the necessary pumps cause major headaches.  It’s a rare day when all a farm’s pumps are operational.  Another thing--the state now requires filtration of the water before it enters a shrimp farm.  The state is stocking the bays with redfish and other sport fish.  Their concern is that the shrimp farms are sucking up the fingerlings.  We have to filter the water and return the fish to the bay.


Some of our farms do very well throughout the production cycle, but then have problems at harvest.  Harvesting has come a long way in the last ten years.  Laguna Madre Shrimp Farm developed a method a few years ago with a concrete harvest basin and a fish pump type harvester.  They pioneered the idea with the Sort-Rite International, Inc..  It’s a very efficient, low-labor type system, and they have improved it even more now by using a much smaller concrete basin.  It’s a cheaper, streamlined method, and a lot of our other farms have copied it.  Some farms do not have well-designed ponds.  They don’t drain completely.  They can’t get all the shrimp out, without excessive labor.  Some farmers have even made the mistake of not icing their shrimp enough.  Ice is a low-cost item.  Shrimp are a top-quality, high-value item--if they’re handled properly.  If not, the value drops off tremendously.


Marketing is another thing that we’re just getting into.  We know that we can’t compete with a lot of the cheaper imports coming in from China, Ecuador and Asia.  The key is to establish a high-value market in the United States.  Some farms are working with processors on a vacuum pack, which would be sold at grocery stores.  Instead of purchasing the typical five-pound cardboard box of shrimp, the shopper could buy enough for a single meal.


Finally, the biggest problem we have in Texas as compared with other parts of the world is our climate: cold temperatures.  If you leave the shrimp in the ponds to late in the fall, they will probably die during a cold front.  They get very lethargic.  If you’re quick to drain the pond, you can pick them off the bottom of the pond, but they will no longer drain harvest.  Some of the farms are attempting to deal with the cold winters by using greenhouse-covered ponds to head-start their shrimp in the early spring.  This way they can put the postlarvae in the small covered ponds in March, instead of April or May.  They gain a month or maybe six weeks on the growing season and produce larger shrimp that way.  Some farms are experimenting with oysters as a second crop  There’s also some consideration of winter species.  Those are all things for the future.


Shrimp Farming In Hawaii (James Wyban): Shrimp farming in Hawaii has a long, colorful history.  Before Captain Cook arrived in Hawaii in 1778, Hawaiians were gathering marine shrimp from coastal ponds that ringed the shores of all the islands.  The modern industry, however, began in the mid-1960s when Anuenue Fisheries Research Center, part of the state department of aquatic resources, started producing freshwater prawn (Macrobrachium rosenbergii) postlarvae.


The state program focused on a cooperative agreement between the state and private producers.  The state distributed M. rosenbergii postlarvae to farmers in exchange for production data and water quality information.  By the mid-1970s, there were six farms producing about 50,000 pounds of Macrobrachium  a year.  The technology, which has come to be known as the “Anuenue Method” and is used by most of these farms, was extensive in nature, with low stocking densities in one-acre earthen ponds.  Low quality feed was used, and once the prawns reached marketable size, the operators would cull harvest on a monthly basis.  With a seine net they would remove the large animals, allowing the smaller animals to grow to market size.


Bruce Smith’s Kahuku Prawn Company (13.5.14) is the largest Macrobrachium farm in Hawaii.  Bruce has about 20-acres of ponds and produces about 40,000 pounds of Macrobrachium  a year.  Although market prices for Macrobrachium  have been very good, consistently over five dollars a pound for whole animals, the production economics for this technology are marginal, and interest in Macrobrachium culture has diminished.


Now people are looking at marine shrimp culture as the opportunity in aquaculture.  The marine shrimp culture industry in Hawaii began with a Japanese firm named IKKO which moved to Hawaii and leased 13 acres of ponds from the Lowe Aquafarm Company and established a seed facility at the Oceanic Institute.  This was in 1979, and IKKO’s goal was to use Japanese shrimp production technology to produce P. japonicus, the Kuruma prawn, for live shipment to the Tokyo market.  From 1980 to 1983, a pilot-scale farm produced and exported shrimp.  During Golden Week (a Japanese holiday) in 1982, IKKO received up to $83 per kilo for its live shrimp.  I think this is an important point because it illustrates the high price that high-quality, farm-raised shrimp can command.  IKKO discontinued the farming operation in 1983.


Another major shrimp farm is Marine Culture Enterprises, which moved its project to Hawaii from Mexico in the early 1980s.  Originally, MCE was a cooperative venture between Coca Cola Company and the University of Arizona’s Environmental Research Lab.  They developed super-intensive shrimp farming technology in Mexico.  It utilizes air-supported greenhouses, shallow raceways, high-quality feeds and water exchange rates as high as 500% a day.  After moving to Hawaii, Marine Culture Enterprises was sold to W.R. Grace and Co., which in 1984 opened its first production unit with one hectare of raceways.  It had very lofty goals of producing 1,500 to 2,000 tons per year.  However, in 1987, it had an outbreak of IHHN virus.  The species they were culturing, P. stylirostris, is particularly sensitive to this virus, and it swept through the farm like wildfire, destroying a million dollar corp.  W.R. Grace and Co. looked at that situation as an unacceptable amount of risk and, subsequently, sold the farm to a Norwegian firm which has renamed the company Pacific Sea Farms.  They are producing P. vannamei  in the raceways, while experimenting with a new “super-hyper-intensive” system.


Another early entry into marine shrimp experimentation and development in Hawaii was Aquatic Farms, Ltd., a small farm on the windward side of Oahu.  Today, Aquatic Farms is principally an international consulting firm.  In the early 1980s, however, it developed techniques at the farm which could be transferred overseas.  Later, it sold the farm to the State of Hawaii, which renamed it the Mariculture Research and Training Center.  Research on shrimp farming continues at the facility.


Currently, there are five commercial shrimp farms in Hawaii, three of them are on the north shore of the main island of Oahu in the Kahuku area.  They are Amorient Aquafarm, the largest farm in the state; Aurea Marine, Inc., and Pacific Sea Farms.  We also have two commercial farms on the neighbor island of Molokai.  One is Molokai Sea Farms and the other is Ohia Shrimp Farm, a new company using round ponds and intensive methods.


We also have three shrimp research organizations in the state.  Again, on Oahu, we have the Mariculture Research and Training Center, part of the University of Hawaii, where they have the old Aquatic Farms facility and conduct work on automation and water quality.  On Coconut Island is the Hawaii Institute of Marine Biology, where some basic studies in shrimp reproduction are being done.  At Makapuu, we have the Oceanic Institute, which is the national coordinator for the United States Department of Agriculture shrimp farming program.  It also runs a major shrimp research program.  The Oceanic Institute has a satellite hatchery on the big island of Hawaii, at Kona, that’s in the early stages of development.  It will produce pathogen free, P. vannamei broodstock.  The facility has been stocked with animals that have passed a rigorous screening.


All of the farms in Hawaii work with P. vannamei, but the industry has had experience with several penaeid species.  We’ve had people work with P. japonicus  and P. stylirostris.  Amorient Aquafarm and Aquatic Farms have worked with P. monodon, and researchers at the Hawaii Institute of Marine Biology have worked with P. chinensis.  After a lot of trial and error, P. vannamei remains the species of choice.


Amorient Aquafarm is the largest shrimp farm in Hawaii.  At one facility it has 143, one-acre ponds, most of them producing P. vannamei and some of them producing freshwater prawns (M. rosenbergii) and some fish species.  Amorient practices semi-intensive methods, while working to intensify production with aeration and better feeds.  It pump harvest its ponds which is very efficient.


One of the innovations that Amorient has developed--and I think it’s a signal of what could happen in shrimp companies--has to do with their direct marketing approach.  It has a roadside stand right next to the farm where tourists come by, see the farm in the background and buy a variety of products: cooked shrimp, fresh tails, cocktails, a shrimp plate, shrimp on a stick and shrimp tempura.  For cooked, whole, freshwater prawns, it gets $9.75 a pound for a standard size.  For the super colossals, about five per pound, it gets $12.25 a pound.  For fresh whole shrimp on ice, it gets $6.50 a pound, and for tails it gets about $7.50 a pound--very nice prices!  The roadside stand moves 100,000 pounds of product and generates $500,000 annually.


The other side of the Amorient marketing effort is something they liken to the “Avon Ladies” of shrimp culture.  Amorient has an informal network of women who sell the shrimp door-to-door in ethnic neighborhoods.  The Avon Ladies pick up fifty to a hundred pounds at a time and sell it in their neighborhoods.  With the Avon Ladies and the roadside stand, Amorient realizes better than $5 a pound for its shrimp.  With annual production of around 500,000 pounds and annual revenues around $2.5 million, the farm is profitable.


In 1989, Amorient picked up an option on a neighboring site, the former Systemculture Seafood Plantation, a land-based oyster farm.  Amorient converted the site to intensive shrimp farming and is now producing shrimp in eight, square, quarter-acre ponds.  It lined the pond banks.  It’s using aeration equipment, high stocking densities and expensive high-quality feeds.  Amorient calls the new intensive farm AmCo.  The site has 36 of the dilapidated quarter-acre ponds, and, in 1990, Amorient plans to refurbish the remainder of them.


Amorient’s next door neighbor is Aurea Marine, Inc., owned by Terry Astro.  He grows shrimp in an intensive, one-acre, concrete tank.


On the island of Molokai, on the east end, there’s a new farm called Ohia Shrimp Farm.  It’s using half-acre, intensive, round ponds.  It plans to market the crop locally, and eventually expand into 18, half-acre round ponds.  Another farm on Molokai is Molokai Seafarms.  It has six half-acre ponds and about a dozen one-and-a-half-acre ponds.  Molokai Seafarms has been constrained by a shortage of seed, a problem throughout Hawaii.  The Oceanic Institute has started a cooperative program with Molokai Seafarms.  OI will work to improve seed production at the farm’s hatchery.


In 1980, Hawaii produced about 10,000 pounds of shrimp, primarily from the IKKO farm.  By 1987, Marine Culture Enterprises was producing over a million pounds a year, but, when the disease problem struck in 1988, the farm was taken out of production.  In 1989, I estimate about 450,000 pounds of marine shrimp and 100,000 pounds of freshwater prawns were produced by the industry.


My favorite part of the story, of course, is the Oceanic Institute (OI), where I work.  OI is located at Makapuu, which is on the windward, southeastern point of the main island, Oahu.  OI is the coordinator for the national marine shrimp program, called the GCRL Consortium, funded by the U.S. Department of Agriculture.  Through that program, OI has a major research activity directed at developing the commercial shrimp farming industry.


One of them is the economics of shrimp farming.  When we went through the economics of shrimp production, we came to the conclusion that existing technology would not be profitable, at least in Hawaii.  We also came to the conclusion that what was needed was a more intensive system that would maximize production.  In 1987, we developed an intensive, round pond system.  Our first experimental round pond was about 20 meters in diameter.  It has a center drain where we can remove the accumulated sediments.  We use paddlewheels to aerate and circulate the water.  The circulating water sweeps the sediments to the center of the pond where they can be drained off.


Some of our work with the round ponds has focused on optimizing stocking densities.  At a lower stocking density of 75 animals per square meter, we realized a much better growth rate than when we increased the stocking density up to 150 animals per square meter.  We produced 26-gram whole shrimp in 14 weeks at a stocking density of 75 postlarvae per meter.  That’s a relative high stocking density, and it produced a large, fast-growing P. vannamei.  That trial has become known as “RP8 The Great”.


In 1987, we entered into a cooperative agreement with Amorient Aquafarm to construct a commercial-scale version of the round pond at its site in Kahuku.  In 1988, the half-acre, commercial-scale pond produced 20,000 pounds of whole shrimp in three crops, or 40,000 pounds per acre per year.  Total operating costs: $59,000.  At a break-even price of $3.00 per pound, Amorient realized $99,000 for the shrimp produced in that pond, to give them a net profit of $40,000.  We believe these numbers are extremely important because they were produced in a commercial setting and because they are real numbers.  These are not extrapolations of anything--they are what we got.


The other major issue in technology that we’re concerned with is the availability of seed; currently, it’s limiting the expansion of shrimp farming in Hawaii.  We built a prototype shrimp maturation facility at OI, and we’re getting better at producing nauplii every year.  In 1989, in addition to achieving very satisfying research results, we managed to distribute more than 30 million nauplii to shrimp farms in the state.


In conclusion: Hawaii has five commercial farms producing on the order of 420,000 pounds of shrimp and 100,000 pounds of Macrobrachium.  Those shrimp are worth about 2.1 million dollars.  Penaeus vannamei  is definitely the species of choice.  All the farms in the state use different techniques; no two seem to be the same.  The major constraints to the industry are seed availability, diseases and limited site availability.  It’s difficult to get land for shrimp farming in Hawaii.  I predict that new farms in the state will use intensive systems and pathogen-free seed.  Farmers will sell to non-commodity markets, markets which are more likely to pay a premium price for a premium product.


Shrimp Farming In South Carolina (Steve Hopkins): The first documented attempts at shrimp farming, at least in the continental United States, took place in South Carolina in the mid-1950s.  Currently, interest in shrimp farming is at an all time high.  Early on, farmers used extensive techniques along the coast.  They would capture wild juveniles in coastal impoundments and raise them to adults.  This still occurs to some extent today, although the methods are fairly unpredictable because of fluctuating supplies of wild seed, predators and difficulties with harvesting.


In the 1970s, there was a lot of activity in freshwater prawn farming, about a half dozen small farms.  Most were able to cover their operating expenses, but the profits were not there for a viable industry.


The progress of marine shrimp farming has followed improvements in the technology.  Once commercial supplies of hatchery reared seed became available, the farms shifted from extensive production to semi-intensive and intensive production.  The first company to stock hatchery reared seed was Palmetto Aquaculture, in 1981.  When it switched to hatchery-reared postlarvae, instead of recruiting wild postlarvae out of the estuaries, it had much better predator control, and through some mechanical adjustments, it improved the harvesting efficiency.  Over the years, Palmetto Aquaculture has used a number of different tidal impoundments and has generally reduced the number of acres it has put into production--but increased their efficiency.  It can make money if 50% of the hatchery-produced postlarvae grow to market size.  This year, survivals were reported at 65%.


In 1984, Plantation Seafarms) used tidal impoundments, which were sub-divided to make them more manageable.  After two years of production in tidal impoundments, it expanded onto a highland site in 1986.  The original Plantation Seafarm site was sold and became the Sand Creek Shrimp Farm, which increased the intensity of the site by further sub-dividing the impoundments and using aeration and feeding.


Plantation Seafarms went through a financial restructuring, and it is now called Edisto Shrimp Company.  It’s the largest shrimp farm in the state, about 140 acres.  Edisto Shrimp Company found that by using a highland site, it had much greater control over production.  For example, the ponds could be completely dried between crops to oxidize and remove the organic sludge.  They added supplemental aeration to increase production.  Now, they have a system that is generations ahead of the one they started with.


On the heels of Edisto Shrimp Company were a number of small, semi-intensive farms that developed between 1985 and the present.  As the years go by, new farms tend to be more and more intensive.


In 1984-85, South Carolina’s Waddell Mariculture Center was constructed to provide research and development support for, not only the shrimp farming industry, but also the aquaculture industry in general.  The Center works with marine and brackish water species.  At present, about half the effort is in shrimp research and development and the other half is in finfish (striped bass hybrids, redfish) and mollusks (clams, oysters).


Following the trend toward intensification, the newest farm on the block is Atlantec Seafarm, just constructed this year.  It occupies a ten-acre site with five, two-acre ponds and employs very intensive management, a lot of paddlewheel aeration, high water exchange rates and very high stocking rates.  It had a lot of trouble getting started this year.  It didn’t start construction until spring when it should have been stocking.  Because of a seedstock shortage, it didn’t get animals into the ponds until June.  Permitting delays would not allow it to pump any water until almost July.  It had a lot of delays, but still managed to produce close to 10,000 pounds of whole shrimp per acre in its three, two-acre ponds.  It would like to expand to fifty acres in 1990.


Richardson Plantation started out in 1986 with more or less semi-intensive techniques.  Through annual increases in management inputs--in terms of aeration, water exchange and stocking density--it quickly became a super-intensive farm.  Last year, in some ponds, it produced up to 15,000 pounds per acre.  It’s a pilot farm, part of a large family trust with diversified agricultural interests on a very large land tract.  Shrimp farming is one of a number of things it does for a living.  It may expand the shrimp farm.


Sea Fare, Inc., is the most northerly of the shrimp farms in South Carolina, the only one that is north of Charleston, which is on the central coast.  Sea Fare, instead of using paddlewheel aeration like all the other farms, uses a diffused air system.  It’s had very little success with a 37-acre, intensively managed pond.  It’s a sea level pond which is difficult or impossible to drain, and it’s very difficult to control the bottom sludge.  It’s the only shrimp farm in the state that received major damage from Hurricane Hugo.  The combination of the storm damage and a very poor production record makes it questionable as to whether this farm will continue.


There are a variety of other small, mainly owner-operated farms in the state.  The three corporate farms are Edisto Shrimp Company, Atlantec and Sea Fare.  All the others are are family trusts or owner-operated farms, such as Taylor Creek Shrimp Farm, Stansel Seafarms CLP Trading Company, Tullifinny River Company, Martin Shrimp Farm, Rabbit Point Plantation, Sea Island Mariculture, Spring Island Plantation and Palmetto Aquaculture.


In 1989, the state had 12 operating shrimp farms and 258 acres of ponds, but, because of the unavailability of postlarvae in the spring of 1989, only about 172 acres actually got stocked.  Edisto Shrimp Company, for example, only stocked 60 of its 140 acres.


Since the early 1980s, we’ve seen annual increases in total yield and slight increases in production in terms of pounds per acre.  In 1989, however, with the shortage of seedstock, annual production fell from the 1988 high of 539,000 pounds to about 300,000 pounds.  Because ponds were stocked much more lightly, due to the postlarvae shortages, the average production for the state fell from about 2,000 pounds per acre in 1988 to 1,700 pounds per acre in 1989.  Within that, there’s an enormous range from about 500 pounds per acre to near 10,000 pounds per acre, depending on the way the farm is structured and managed.  The farms are hitting their production goals, but many can’t afford to expand and intensify.


If postlarvae and operating capital were available, the state’s 258 acres of shrimp ponds could, without any new capital construction or equipment, produce 900,000 pounds of shrimp a year.


The storm damage from Hurricane Hugo, except for Sea Fare, was minimal at most farms.  Some of the farms were without power for a couple of weeks, and it got a little scary on the intensive farms when they couldn’t run their aerators, but all seemed to come through fairly well.  The big impact from the hurricane was the low temperatures.  Hugo came through on September 22, 1989, and by the end of the month, pond temperatures were too low for good shrimp growth, thereby shortening the growout season by a couple of weeks and reducing the size of the shrimp.  Nonetheless, financially, 1989 was a good year for some of the farms.  Some of the farms that have been operating for two or three years finally had their management skills honed, and they made some money.  More importantly, a lot of the small farms found niche markets.  It’s becoming increasingly clear that the key to success in South Carolina shrimp farming is not just good technology and management, but also good marketing.


When South Carolina started in marine shrimp farming, the product was moved through the same outlets that processed the wild shrimp harvest.  The pond side price for whole shrimp in the sizes that are typically produced in South Carolina, which is the equivalent of about a 36-40 or a 41-45 tail count, was around $2.10, a far cry from what Amorient and the farms in Hawaii get for their product.  By doing some marketing footwork, finding those niche markets where someone is willing to pay for better quality, the farmer is able to get up to $2.75, or in some cases, even $3.00 a pound for the product.


If you look at what it takes to produce a pound of whole shrimp, the farmer is spending about 60 or 70 cents for feed.  While this is high and the major operating cost, it is really favorable when compared to feed costs in other parts of the world, like the Orient.  To produce that pound of whole shrimp, the farmer is spending about 50 to 60 cents on labor, either hired labor or the labor of the owner-operator.  Seed costs for postlarvae--if you get what you’re supposed to get; we find that the counts can be low after long shipments--you’re paying about 40 to 50 cents for every pound of shrimp that’s produced.


Electricity and fuel accounts for about 20 to 30 cents for every pound of shrimp produced.  Saltwater is really hard on pumps and aerators so equipment replacement represents something in the neighborhood of 10 to 20 cents per pound of shrimp.  These direct operating costs add up to $1.80 to $2.30 per pound.  In commodity markets, shrimp is worth $2.10 a pound, in niche markets maybe upwards of $3.00 a pound.  In South Carolina in 1989, the average price received by the farmer was around $2.50, pond side, whole shrimp, that’s before any processing.


Producing shrimp at $1.80 and selling at $2.50 allows some room for nice profits, but most of these guys have an operating loan to cover seed and feed costs until they get some cash flow.  The interest on these loans represents 10 to 20 cents a pound.  Then, of course, there’s got be be some sort of construction loan.  It represents anywhere from 20 to 30 cents per pound.


So now we’re up to something like $2.10 to $2.80, depending on your skill as a manager, to produce a shrimp with an average value of $2.50.  That good manager producing at $2.10 and selling at $2.50 makes a decent profit.  Of course, the guy producing at $2.80 and selling at $2.50 is not going to be in business very long.


There are many immediate and long-term problems for shrimp farming in South Carolina.  One that’s just cropped up lately is the permitting system, mainly in terms of the effluent.  The state requires that you get an intake permit from the coastal zone management authority.  As long as you’re not obstructing navigable waters, have low intake velocities and return to the estuary the zooplankton and other animal matter that’s collected during pumping, there’s no problem with the intake.  The effluent permit is administered by the state health department, and it uses some very complex computer models to determine (based on the farm’s annual operations) the load of suspended solids, BOD and ammonia going back into the estuary.  It will allow you to impact the estuary by 0.1 parts per million of dissolved oxygen.  In other words, it will allow you to decrease the average dissolved oxygen load in the estuary by 0.1 parts per million.


Another major problem, particularly for next year, is seed availability.  Seed availability was never a real problem until this year.  South Carolina has dealt with about six different suppliers of seed.  There are no hatcheries in the state.  Out-of-state suppliers are in Texas, Hawaii, Florida, Panama and Costa Rica.  Each year, it seems a different hatchery dominates selling into the South Carolina market.  You really don’t know from one year to the next if you’re going to have a dependable supply of seed.  For this reason, there’s a lot of interest in developing a local hatchery--even though it wouldn’t be profitable.  The stocking window in South Carolina is just a couple of months.  Everybody wants to stock at the same time.  A hatchery that only operates for two months of the year is not going to make money.  However, it’s basically a cheap insurance policy to protect your investment in growout.



Questions and Answers


At the end of the seminar, Bob Rosenberry, editor/publisher of the Aquaculture Digest, asked each of the speakers a question:


Aquaculture Digest: Jim Wyban, I’m an investor.  I’ve got five million dollars in my pocket, and I want to make some big money in shrimp farming.  What advice to you have for me?


Jim Wyban: At the Oceanic Institute, we have put a lot of thought into answering questions like that.  Since our focus is on shrimp farming in Hawaii, we would recommend that you invest your money in Hawaii.  Hawaii’s warm temperatures supports year-round shrimp growth which is a definite advantage.  We would also advocate an intensive culture system using round ponds.


Next, we would go through a feasibility analysis with you to illustrate several scenarios for your investment.  We would ask a lot of “what if” questions.  What if we increase production 10%, or increase farm-gate prices 10%?  What if costs are cut 10%?  Although expensive to build and operate, this system achieves levels of reliability and production that generate very high cash flows.  You said you wanted to make some money.  This system will give you an opportunity to make a profit in a very difficult business.


Aquaculture Digest: George Chamberlain, we hear a lot of talk about “extensive”, “semi-intensive” and “intensive” shrimp farming.  Which works best in Texas?


George Chamberlain: We don’t have the same land costs as Hawaii, so small, “intensive”, round ponds don’t make as much sense in Texas.  There’s a place for the round pond at the nursery stage.  To get a jump on the growing season, farmers could “head start” juvenile shrimp in round ponds.  We already have one producer who is looking at building some covered, round, nursery ponds with center drains--just like the Oceanic Institute system.


Land costs in Texas are reasonable, between $1,000 and $1,500 an acre, and there’s plenty of coastal land.  We’re looking at a hybrid strategy, something with big yields, but in bigger ponds.  Yields from aerated, five to seven-acre ponds are very acceptable.  Our best shrimp farm averaged close to 4,000 pounds per acre per year in seven-acre ponds.  It was able to keep construction costs low and still get a good yield of big shrimp.  I think big, aerated ponds are the correct approach for Texas.


Aquaculture Digest: Steve Hopkins, South Carolina is doing a great job with shrimp farming.  In five years, what will the typical shrimp farm look like?  What progress will the industry make?


Steve Hopkins: If we use current events as a trend, it appears that, unlike Texas, which is developing some large corporate farms, South Carolina will have small, intensive farms.  The “shrimp farm of the future” is likely to be owner-operated, built on a shoestring, but making money.  It will be a mariculture farm, capable of switching from species to species, from market to market.  If fish look profitable, the farm will grow fish.  Perhaps there will be some polyculture with shellfish, like oysters or clams.


Most importantly, the farms will be small enough to move all its product in niche markets that are willing to pay a premium price for a premium product.  South Carolina can’t compete in the commodity market with farm-raised shrimp from China and Ecuador.  The margins are just to small.  Large farms may find it difficult to move all of their product into niche markets.  If someone is going to make money, it’s going to be that little entrepreneur with good management, good finances and good markets.



USA Shrimp Farming--Bonanza or Blackhole?


George Chamberlain: I would like to address the “Bonanza or Blackhole” question.  Right now, it’s touch and go every year in Texas.  It looks like a break-even proposition.  Until we get some scale, until we have enough hatcheries, until we have a dedicated aquaculture feedmill, until we have the right infrastructure--the costs of doing business are going to be high.  But, the industry is buying valuable time.  Efficiency improves every year.  Each year, we get closer to it.  If these guys can stick with it, they’ll have a pretty good business, and it will expand.


After the seminar, Jim Wyban forwarded these comments on the bonanza/blackhole question.  I don’t think we’ll see any more blackhole shrimp farming events in Hawaii because we’re all a lot smarter today.  Investors are not going to support the “pie-in-the-sky” operations that failed so dramatically before.


A bonanza could be realized on pond side prices of five dollars a pound.  The niche market Amorient exploits could be expanded to the West Coast--and we know the Japanese market is capable of paying very high prices for gourmet shrimp, like Kuruma.  To produce gourmet shrimp on a reliable, scheduled basis, successful shrimp farms in Hawaii will use fully integrated operations including disease-free shrimp, round ponds and modern processing and packaging methods and structure their businesses to service gourmet markets.


As documented in our commercial-scale round pond, a profit of $40,000 per pond per year can be realized.  A farm with 36 round ponds (18 raceways) could enjoy a handsome $1.4 million a year profit which would certainly be a bonanza by aquaculture standards.


Steve Hopkins: Some of the farmers in South Carolina think it is a bonanza.  They are making a decent living doing something they enjoy, and there are other farmers who wish they had never heard the word shrimp.  It really is a blackhole for them.  In my opinion, it’s probably neither one.  It’s just farming.  If you’re a good manager, if you have your financial act together, if you do the marketing legwork--you can make some money.  If you make too many mistakes, you will fail.


Bob Rosenberry: Thus far, shrimp farming in the United States has been a gigantic blackhole!  Hundreds of millions of dollars have been invested--with profits ranging from rare to non-existent.  Marine Culture Enterprises, for example, consumed $50 million, and chances are it never made a profit.  Many projects consume their original investment and then disappear.  But!  For the first time, we hear rumors of profitable shrimp farms in Hawaii and South Carolina, and at a time when shrimp prices are at record lows.  Maybe shrimp farming is possible in the United States!


Sources: 1. Bob Rosenberry. Aquaculture Digest/World Shrimp Farming.  February 1, 1990.  2. On-Site Taping Service (see first paragraph).  Shrimp production in the United States.  Fish Farming Expo-III, New Orleans, Louisiana, USA, December 9, 1990.  3. Bob Rosenberry, Shrimp News International, Updated, May 28, 2017.



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