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United States

Minnesota—Each trū Shrimp Farm Will Generate
$48 Million in Economic Activity


Comments on trū Shrimp from The Shrimp List

trū Shrimp Systems, a division of Minnesota-based Ralco Nutrition, which has been in the livestock feed business for more than 40 years, is making preparations to begin construction of its first shrimp farm in the spring of 2018.  It also plans to construct two shrimp hatcheries that will provide enough seedstock to continuously stock as many as three of its farms.  The production of one farm is forecast to exceed 50% of the current USA shrimp aquaculture production.  trū Shrimp plans to build its processing facility and hatchery in Marshall and Lyon County in southwestern Minnesota.

 

trū Shrimp President and CEO Michael Ziebell said shrimp farming is an opportunity for people from the Midwest to invest in the Midwest.  “We are building the trū® Shrimp company on the idea that the people of the upper Midwest are the first to invest...[in one of our shrimp farms]....  We are not going to the coasts or Wall Street for investment money, but invite the agriculture community of the upper Midwest to invest here and allow that money to grow and provide a return to everybody,” Ziebell said.

 

Ralco has released an economic impact study conducted by the University of Minnesota that projects the construction of just one trū® shrimp farm would generate over $48 million in economic activity in southwestern Minnesota.

 

“The University of Minnesota confirmed that the integrated model and scale would have a dramatic impact on the communities in which a ...[shrimp farm] is built,” said Ziebell.  “The construction of a...[shrimp farm] will be a boom to local communities, and it will also mean good quality and well-paid jobs for the long term.  The people who work in...[our shrimp farms] are going to be technically qualified and trained.  Also, the economic impact doesn’t consider feed commodities required for a...[shrimp farm] including corn, soybeans and hard red wheat.  trū® Shrimp is creating more than economic ripples; it’s an economic tsunami.”

 

Construction of one trū Shrimp’s nine-acre farms would result in $14.5 million of labor income and support an estimated 330 jobs.  Once a farm is constructed, it will continue to generate an estimated $23 million annually in economic activity and provide employment directly and indirectly for 124 people.

 

The University of Minnesota has also been commissioned to create additional economic impact studies for all the infrastructure the trū® Shrimp company requires for operation including a genetics center, two hatcheries and processing facilities.

 

trū® Shrimp is a brand of Ralco, a third-generation family owned multinational company with distribution in more than 20 countries.  Ralco is a leading global supplier of livestock nutrition, animal health products and crop enhancement technologies that support large segments of the livestock, poultry, aquaculture and crop production industries.

 

Information: Michael Ziebell, Ralco Aquaculture, 1600 Hahn Road, Marshall, Minnesota 56258, USA (Phone 1-800-533-5306, Email michael.ziebell@trushrimpsystems.com, Webpage http://ralcoagriculture.com).

 

Comments on trū Shrimp from The Shrimp List

 

Durwood Dugger (ddugger@biocepts.com, http://www.biocepts.com/BCI/Home.html): Question: Can trū Shrimp tell us how their operating economics are different (much lower) from the last hundred or so small-scale, recirculating shrimp farming systems in the USA that didn’t go anywhere?

 

Out of necessity, Midwest grain farmers are some of the most frugal people on the planet.  If they’re going to be the people financing trū Shrimp’s projects, they’re going to want to see the prices at which trū Shrimp expects to sell its shrimp—and how those prices compare with imported shrimp prices.  Or, is this just another shrimp recirculation project dependent on premium market prices?  Don’t get me wrong; I wish these folks well, but they’re going to have show a lot more financial/production details to generate interest and support from Midwest grain farmers.

 

Roger Kelso (rkelso@saltcreekshrimp.com): Sounds like another bubble may be developing.  Good Luck to trū Shrimp!!!!

 

Enrique Mi Nino (enriquemlnino@gmail.com): I have 27 years experience in shrimp farming.  I’m from Costa Rica and used to own a large farm in Honduras.  For eight months of the year, we had zero salinity, so, basically, it was a freshwater, Penaeus vannamei farm.  The secret to our success was good acclimation.  Mr. Dugger, it’s not easy to develop shrimp farms in the USA because of temperatures and salinities.  Good old American ingenuity and good shrimp prices in the United States will make shrimp farming work—some day.  [Shrimp News: temperature and salinity are not the primary factors that make recirculating shrimp farming uneconomical in the United States].

 

Jeff Thompson (jthompson@ec.rr.com): I’m always excited to see advancements and progress in USA shrimp farming.  There was no mention of economic feasibility in the item on trū Shrimp.  It was all about the economic impact of a potential farm.  trū Shrimp will have to compete with imported commodity shrimp.

 

Durwood Dugger (ddugger@biocepts.com, http://www.biocepts.com/BCI/Home.html): Enrique,  always glad to read your comments.  For a big project like trū Shrimp, it will have to compete with global production costs.

 

That trū Shrimp item was all about economic impact.  I think it was a pitch to state and local economic development agencies for their support.  Everything helps economically, but this kind of government support isn’t an economic game changer in that it really doesn’t impact operating costs, but it may open a few doors on site availability, resources and permitting.  I suspect they are hoping for state backed debt access, which is an economic killer until you have an economically profitable/viable production model.  So state support might be helpful, but it’s not going to make enough difference in competing with foreign, open-pond shrimp production.  Lowering USA shrimp production costs sufficiently to compete is a tough nut to crack, but not technically or economically impossible.  Just don’t expect it to be cheap, quick or without substantial analysis, innovation and cost reduction.

 

We have a number of small-scale, recirculating shrimp farms in the USA (about 32 the last time I checked, but I think many closed in 2016 due to a lack of seedstock).  Those farms can work for their owners as long as they can get high prices for their shrimp, usually $18 to $22 a pound for heads-on, non-graded shrimp.  But if you try to increase your production by a factor of a thousand or ten thousand, you’ll soon discover that small-scale economics don’t work.  Your cost of sales increase.  You quickly saturate your market.  And your prices drop back to the regional wholesale price.  This is where we are the United States—trying to economically scale RAS to an attractive investment scale.

Sources: 1. Wisconsin State Farmer.  Shrimp Industry to Have $48 Million Impact on Southwest Minnesota.  February 15, 2017. 2. The Shrimp List (a mailing list for shrimp farmers).  Subject: Update on trū Shrimp.  February 16, 2017.  3. Bob Rosenberry, Shrimp News International, February 18, 2017.

 

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