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March 19, 2014
Update on Shrimp Farming in Latin America
Shrimp News Interviews Neil Gervais
On February 25, 2014, via phone, I interviewed Neil Gervais, technical advisor of aquatic feeds at Zeigler Bros., a specialty feed company that supplies feeds to shrimp farmers around the world and licenses feed formulas and feed production technology to feed mills in Latin America. Zeigler, in business for 78 years and located in Gardners, Pennsylvania, USA, has feed mills in Pennsylvania and licenses its technology to two feed mills in Mexico (one shrimp and one fish) and to one feed mill in Ecuador. In 2013, Zeigler won local, state and national exporter-of-the-year awards for its export business.
Zeigler’s licensed feed mills are not currently selling feeds outside of Mexico and Ecuador, but Zeigler does sell its larval and nursery and growout feeds from the USA worldwide. Gervais is in charge of selling hatchery feeds through distributors and direct sales in Central and South America.
During the interview, we talked about the current status of Shrimp Farming in the Western Hemisphere, which, here, I’ve divided into three sections: Mexico, Central America and South America.
Shrimp News: Let’s start with Mexico. What’s the status of shrimp farming in northwest Mexico, in the states of Sonora, Sinaloa and Nayarit? What do they expect from the first crop of the year? What precautions are they taking to protect themselves from whitespot and early mortality syndrome?
Neil Gervais In 2013, northwest Mexico only produced about twenty percent of the shrimp that it produced two years ago, but it learned a lot from its experience with early mortality syndrome (EMS) in 2013, and that learning is going to be applied and verified in 2014. One thing that Mexico learned in 2013 was that the first crop of the year, when temperatures were cool, was more successful than the second crop when temperatures were much warmer. There might, however, be more to it than just temperature. The first crop might have been better because the disease had not completely spread at that point.
Several years ago, to prevent whitespot, known to be more of a problem at lower temperatures, Mexico instituted regulations against early stocking. Now those regulations have been loosened so that farmers can test the hypothesis that EMS is less of a problem in cooler weather, indicating that EMS has become a greater concern than whitespot. Consequently, many farms are stocking earlier in 2014. Farms that previously stocked in April and May will now be stocking in March and April. In fact, some farms are stocking right now, in late-February.
In 2012, there was only one hatchery in Mexico that was producing disease-tolerant postlarvae. It had been selling postlarvae for six years, but its lines were never in high demand because they weren’t fast growers. Now, there are at least three hatcheries working with lines of animals that were selected for growth—and disease tolerance. Farmers are going to stock more of those animals in 2014. When I say “tolerance”, I’m talking about whitespot tolerance, which we hope will make the animals more EMS tolerant.
Shrimp News: What’s the status of specific pathogen free (SPF) animals in Mexico?
Neil Gervais: All broodstock in Mexico is required to be SPF. If any broodstock is found with any of the major viruses, they are eliminated.
Shrimp News: Approximately, how many hatcheries are there in northwest Mexico?
Neil Gervais: About twenty-four hatcheries will be open for business in northwest Mexico during the spring and summer of 2014.
Shrimp News: Are most of the shrimp farms in northwest Mexico going to stock in 2014?
Neil Gervais: In the state of Sonora, at least fifty percent of the farms are going to do trials early in the year. This percentage will be higher in Sinaloa.
Shrimp News: What percentage of the shrimp feed market does Zeigler have in northwest Mexico?
Neil Gervais: The market share of Zeigler feeds made by Nutrimar in Los Mochis, Sinaloa, would be about 20%. With the low production in 2013, that percentage might have jumped higher just because the farms we work with have had better success. If you include Baja California farms (owned by GBPO, Nutrimar’s parent company), which did not have EMS outbreaks and were responsible for 25% of shrimp production in 2013, our percentage of the market is higher than that.
Shrimp News: What else did the farmers learn from the 2013 season?
Neil Gervais: Farmers are looking at polyculture systems with tilapia, even at high salinities, based on what’s happening in Asia, particularly Vietnam and China.
Shrimp News: What’s happening on the East Coast of Mexico, along the Gulf of Mexico?
Farms on the Gulf of Mexico that bought postlarvae from hatcheries in northwest Mexico in 2013 did not have any EMS outbreaks. The East Coast will continue buying postlarvae from the West Coast in 2014. Right now, the farms on the East Coast are drying out. We’ll just have to wait and see if they get infected or not, but for the moment, they are clean. South of Nayarit, on the Pacific coast, in the states of Colima and Chiapas, farms reported mortality issues at the end of 2013, but the cause of the mortalities has not been confirmed. No one has said that those mortalities were caused by EMS.
Shrimp News: Do you want to speculate on how EMS got into Mexico?
Neil Gervais: I don’t think anyone can tell you how EMS got into Mexico. There’s a lot of speculation, but nobody knows for sure. I feel that all the energy and efforts that have been placed on specific pathogen free (SPF) fast-growth lines, not paying any attention to disease tolerance, has made animals more susceptible to EMS—period! It is not an anomaly that Mexico and Southeast Asia have this disease because they were dedicated to one hundred percent SPF high growth animals that were dependent on high biosecurity or warmer temperatures. Every other country south of Mexico works with animals at some level that were not bred for pure growth. They were selected for growth and survival. Survival was always part of the selection process.
How EMS got into Mexico is not known and probably will never be known. Why they’re susceptible is because of the way they were selected. Now hatcheries in Mexico are looking for animals that are disease tolerant in non-biosecure environments. I don’t think EMS will be as devastating when—and I do mean “when”, not “if”— it crosses the borders into Central and South America. I believe this because no country south of Mexico is using animals that were exclusively SPF and selected for growth only.
One more thing about Mexico: it has some of the most sophisticated hyper-intensive nursery systems in the world. A large majority of the farms are stocking their ponds from one and two-phase hyper-intensive nursery systems. Animals spend three to five weeks in these bio-secure, greenhouses systems before being stocked in the ponds. There was no reported incidence of EMS in those tanks in 2013. It was when animals were transferred to colder growout ponds with limited biosecurity that EMS hit, usually three to fourteen days after stocking. In 2014, some farms may try to maintain the animals in those systems for longer periods so they can stock a larger, potentially more disease-resistant animal. Even if the growout period after that is very short, there’s a very good market for eight-gram shrimp in Mexico.
In 2013, farms that stocked SPR-WSSV disease-tolerant lines had much better results than those that stocked SPF growth lines. That’s why I’m so optimistic about the domestic lines that have focused on tolerance and survivals. The disease-tolerance lines are the future of shrimp farming in Mexico—and no doubt Asia will use these lines or develop its own disease-tolerant lines.
As of March 15th; I’m in Mexico and like last year, Nayarit is currently experiencing confirmed EMS related mortality.
Shrimp New: How did Guatemala do in 2013?
Neil Gervais: Guatemala produced more farmed shrimp in 2013 than in any previous year. It had no hurricanes, no social unrest, no major disease problems—and got the highest price for its shrimp in over a decade. Most farms stocked 60 to 100—or above—postlarvae per square meter. Only a few thousand hectares were in production in Guatemala, but because of its intensive production methods, it probably produces as much shrimp as Honduras, which has 20,000 hectares of ponds.
In Guatemala, there are about fifty small rural farms that are using inexpensive, plastic, hardware-store liners and diesel-powered aerators and stocking over 100 animals per square meter two to three times a year and getting 10,000 kilos a crop! That model is being analyzed by the Mexican Government for possible use by its farmer cooperatives (ejidos) in the social sector.
Shrimp News: How did Belize do in 2013?
Neil Gervais: Because of the low production of shrimp in Mexico, Belize and other countries in Central America have discovered a huge market in Mexico. Belize is selling most of its farmed shrimp into Mexico. Because of the high price of shrimp, Belize has had a fantastic year. All its farms and hatcheries are gearing up for an even bigger year in 2014. Belize Aquaculture, the most famous shrimp farm in Belize, has invested in a hyper-intensive nursery system, and it plans to increase the size of its farm.
Shrimp News: Honduras?
Neil Gervais: Record production. The large farms that several years ago were having major disease issues have overcome those problems and are getting the highest survivals and best growth rates ever. Several of the large farms are building multi-phase systems. Some large farms in Honduras and Nicaragua have increased their harvests from two a year to five a year. They’re using a three-phase growout system. The hatcheries use a two-phase system, a pelagic phase from nauplii to PL-five and a benthic phase from PL-five to harvest. Then the PLs are shipped to the farm. At the farm, the first phase is typically in a greenhouse nursery containing hyper-intensive tanks, stocked at ten to twenty animals per liter, where the animals are held between 14 to 30 days. In the second phase, they’re transferred to an uncovered, intensive pond, but with higher densities than a normal growout pond, around 50 to 100 animals per square meter. Then, when they reach six to eight grams, the animals are transferred to traditional growout ponds for the third and final phase. Gravity flow or pumps are commonly used to move the animals through the three-phase system.
Shrimp News: Are the systems profitable?
Neil Gervais: Central and South American shrimp farmers who are using these new models are making money! They get an incredible price for their shrimp, a price that no one could have imagined two to three years ago. Most of the shrimp farmers in Central and South America are using some of their profits to increase the efficiency and sustainability of their operations for the long term.
Shrimp News: El Salvador?
Neil Gervais: El Salvador is back on the shrimp farming map. There’s an expanding shrimp farming sector that grew in 2012/2013, both in the social and private sectors, mostly intensive culture, mostly small scale, similar to the Guatemala model. I would not be surprised if El Salvador produced as much shrimp as Guatemala in the next several years.
Shrimp News: Nicaragua?
Neil Gervais: Like all of Central America, Nicaragua saw an increase in production and profits in 2013. The previous year, however, 2012, was not a great year for Nicaragua. The increase in prices during 2013 aided all the farms in Nicaragua. Several groups are developing three-phase growout systems, inland broodstock programs and impressive domestication programs.
Shrimp News: Costa Rica?
Neil Gervais: There’s a rebirth of shrimp farming in Costa Rica, a trend that you’re going to hear over and over again in Central and South America. Costa Rica is now back into full production. The main producer is a company that produces 100% organic shrimp, selling them into the German market and getting a wonderful price. It, and the other shrimp farms in Costa Rica, are growing and becoming more stable. Shrimp farming sites are limited, but Costa Rica is becoming a major producer again and not experiencing any serious disease issues.
Shrimp News: Panama?
Neil Gervais: Several groups in Panama have developed whitespot tolerant animals, which have led to increased survival and productivity. There have been some seedstock shortages there, and hatcheries have had to modernize and expand to meet the increased demand. To meet the demand from the expanding farms, Panama had to import some seedstock in 2013.
Shrimp News: Earlier in the interview, you said that you thought EMS would spread from Mexico to Central and South America. How are all the farms that are doing so well now in Central America going to cope with EMS when it hits?
Neil Gervais: I believe that the strain of Vibrio parahaemolyticus that causes EMS is loose in the environment. It’s not containable. It doesn’t need a vector; whitespot needs a vector. Most viruses need a vector, so you can control the viral diseases by keeping the vectors off your farm. That’s not the case with Vibrio. It’s a bacteria and can travel in the water. Not all selection programs and disease tolerant animals are created equal but I don’t think it’s going to have the same effect in the rest of Latin America that it had in Mexico and Asia. I’m not saying there will be no impact from EMS. There will be an impact, but it shouldn’t be as devastating as it was in Mexico and Asia.
Shrimp News: Venezuela?
Neil Gervais: Venezuela has been described to me as the land of eternal opportunity. It has vast areas for the development of shrimp farming, a perfect climate with temperatures over 28ºC year round and no hurricanes. Unfortunately, because of political instability, some farms have been confiscated by the government. Consequently, almost no one wants to invest in new projects there because they fear that they might be confiscated by the government. That really deters the growth in the industry. The farms that have managed to stay in business are able to make a very good profit, but they must constantly deal with political unrest and import/export issues. There is some new investment into new farms in Venezuela now because investors think conditions will change in the future. Venezuela has the best potential for growth of any country in Central or South America.
Shrimp News: Does Zeigler sell hatchery feeds in Brazil?
Neil Gervais: Yes, we have a very productive distributor in Brazil. Zeigler is one of the biggest suppliers of shrimp hatchery feeds in Brazil.
Farmed shrimp production has been inconsistent in Brazil. There has been a dramatic change in where and how they produce shrimp. Historically, shrimp were farmed in states as far south as Santa Catarina (27ºS), which is south of the Tropic of Cancer (23ºS) and in most of the coastal states up to Ceará (5ºS), but many states—Pernambuco, Sergipe and Bahia—are not producing shrimp right now. The farms in those states are either shut down or their production is very low. There are exceptions, but those states are not important as far as production is concerned.
The majority of the production is in the states of Rio Grande do Norte and Ceará. Some new farms have received permits to begin construction in the state of Maranhão (2ºS), which is farther north than Ceará and just south of the Equator. It’s an area that had been restricted because of environmental regulations until permits were issued in 2013.
The states south of Rio Grande do Norte are more susceptible to WSSV because they are cooler. And in the warm rainy season, they are struck by IMNV, which is triggered by dramatic salinity changes. In 2013, it was much cooler than normal during the winter and much rainier than normal during the summer, which really affected the production of farmed shrimp. Rio Grande do Norte did well because it’s much drier and warmer than the southern states.
In Ceará, it almost never rains and the temperature rarely goes below 28ºC, so for the last several years, most of Brazil’s production has come from there. The sector with the largest increase in production has come from inland farms within this state. They use fresh ground and well water that has very high alkalinity, so most of the growth in farmed shrimp production occurs far from the coast right now. The new farms are typically intensive, and they are getting much better results than the farms along the coast.
Shrimp News: Don’t the farms need some salinity to get good growth and production?
Neil Gervais: No. Even though the new farmers in Ceará use fresh water with little to no sodium chloride, their water has very high alkalinity levels, and it appears that it is the high alkalinity that makes a big difference. There’s lots of space for expansion and the farms are very successful. The hatcheries produce PLs that are acclimated down to zero salinity at the farms.
Shrimp News: Brazil has always been called the “sleeping giant of shrimp farming” but it has never really come out of its slumber and moved into the top echelon of shrimp farming countries. It has the land, the water, the climate and it even has a great internal market. Why hasn’t it ever become a major producer?
Neil Gervais: You mentioned the internal market. Brazil has the best internal market relative to the size of its production of any country in the world. Its shrimp farmers get a high price for six-to-eight gram, head-on shrimp—pond side. Ten years ago, very little shrimp was produced for the internal market. Farmers exported most of their shrimp. Then a severe problem developed that hampered the growth of shrimp farming. The currency exchange rate began to work against shrimp exports. Over the last ten years the value of the “real” has increased, making Brazilian shrimp exports increasingly expensive on international markets. The real:dollar ratio was 4:1 in 2001, and it has dropped to less than 2:1 over the last several years, which basically means the cost of producing its shrimp has doubled in terms of the dollar. The real became so strong it terms of the dollar that the farmers could not compete in international markets. The export market disappeared, and the shrimp farming industry began concentrating on the domestic market, but by that time, the shrimp farming industry had shrunk down to a smaller size.
Fortunately, the Brazilian Shrimp Farmers Association (ABCC), with the help of the government, was able to close the country’s borders to all imported shrimp, an action that stimulated the rebirth of shrimp farming. Now if consumers want to buy shrimp, they must buy domestically produced shrimp, which drove prices up and encouraged investors to invest in shrimp farming again. Even though the price of shrimp is high in Brazil, chicken and beef prices have risen even faster than the price of shrimp, which further encourages shrimp consumption and the expansion of the industry. Shrimp has become a favored product at white-table-cloth restaurants, and in the favelas where lower income people can afford to put half a pound of shrimp in a rice dish and feed a large family.
Shrimp News: Colombia?
Neil Gervais: Unfortunately, unlike Brazil, Colombia does not have a large local market, but it does have a relatively disease-free production area on its Caribbean Coast, around Cartagena. Its temperatures are warm like Venezuela’s and it has never had a whitespot outbreak. Like Brazil, its biggest problem is the strength of its currency, the peso. Colombian shrimp is no longer competitive in the export market. There might be only one shrimp farm left in Colombia, and it’s a semi-intensive farm with low production.
Shrimp News: Ecuador?
Neil Gervais: Ecuador is more optimistic about its shrimp farming industry than ever before. Even though it’s right on the Equator, it has—because of the cooling effect of the Humboldt Current—cooler pond temperatures than other shrimp farming countries in South America (exception Peru), yet it is still able to produce year round. It does not use biosecurity, but still has high survivals. Most of the severe shrimp diseases in the Americas are endemic in Ecuador (except EMS and IMNV), and its broodstock can carry those diseases. There is no effort to work with SPF animals, yet every year, survivals, growth rates and total production increase. Stocking densities are quietly going up, and the international demand for Ecuadorian shrimp has increased dramatically.
In the early 2000s, Ecuador was hit as hard by WSSV as any country in Asia has been hit by EMS. I was working in Ecuador at the time whitespot hit, and the industry immediately began looking for tolerant animals instead of adopting the SPF model. It never dried out its ponds; it never took a month off; it just kept working and working on developing tolerant animals. To survive, it had to drop its production costs, so the industry became very efficient, more efficient than in the pre-whitespot years. Farmers cut back on employees, the use of chemicals, the use of feed additives and the use of magic potions. Little, by little, by little, the industry recovered from the whitespot disaster. In its efforts to develop a tolerant animal, a lot of inbreeding took place, and that’s when geneticists were brought in to increase the diversity of the country’s broodstock. Once the stock was diversified, not only was it disease tolerant, it also had faster growth rates. Every year, there’s been an increase in survival and growth. Farmers are now seeing profitability on a per hectare basis that was unheard of and unforeseen even two years ago.
Tolerant, fast-growing animals had a lot to do with Ecuador’s recovery, but so did better nutrition. In the pre-whitespot days, Ecuador did not produce high-quality feeds in comparison to the international market. When it began importing high-quality feeds from Peru, shrimp production took a big jump, and Peruvian feeds dominated the market. They cost more, but the increase in production more than justifies the cost of the feeds. Peruvian feeds drove up the quality of feeds in the internal market in Ecuador and now Zeigler is going to compete in this market. Zeigler licensed its technology to a company that is building a beautiful new feed mill in Ecuador. This mill is state-of-the-art and will be in production in late 2014. Over the next several years, most of the shrimp feed in Ecuador will be imported or produced by multi-national companies.
Shrimp News: Something we never got into was the effect of Pescanova’s bankruptcy in Central and South America. How are Pescanova’s shrimp farms fairing in the new high-shrimp-price environment?
Neil Gervais: I would say that all the shrimp farms in Central and South America that were having financial problems before the rise in shrimp prices are very successful now—and that includes Pescanova’s farms.
Shrimp News: Are the farms still owned by Pescanova, or have they been spun off or sold?
Neil Gervais: One of Pescanova’s farms in Ecuador was sold to a local farmer, but Pescanova still owns other farms and hatcheries in Ecuador, Nicaragua, Honduras and Guatemala. Those farms are technological leaders, successful and have a bright future. This year—2014—should be a very good year for all of them.
Information: Neil Gervais, Zeigler Bros., 1134 Shillington Drive, Katy, Texas, 77450 USA (phone 1-281-829-3566, mobile 1-717-969-6917, email email@example.com, firstname.lastname@example.org, webpage http://www.zeiglerfeed.com/html).
Source: Neil Gervais. Telephone Interview by Bob Rosenberry, Shrimp News International. February 25, 2014.
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