The Farm Gate Cost of Penaeus vannamei Production
December 23, 2012
This discussion began with a question about the farm gate cost of producing shrimp and then evolved into a general discussion about farming strategies, nursery ponds, pond size and stocking densities.
Brian Montrose (firstname.lastname@example.org): We operate a large semi-intensive shrimp farm in Honduras, Central America, and are interested in knowing how our costs to produce a pound of whole shrimp compare to other farms around the world. We stock 12 postlarvae (PLs) a square meter and harvest 16-gram shrimp with an average growth rate of 1.2 grams a week. Our farm gate cost to produce a pound of whole shrimp is $1.05.
Durwood Dugger (email@example.com): Brian, can you tell us what the $1.05 includes? Accounting, especially in recent years, has become quite creative, and it has become harder and harder to compare costs.
Brian Montrose (firstname.lastname@example.org): Durwood, you’re right. Our farm gate cost refers to all direct and indirect costs to produce a pound of whole, fresh shrimp before it goes out the farm gate to be processed or commercialized.
Jorge Cordova (email@example.com): If Brian had 50% survivals and a FCR (feed conversion ratio) of 1.7, his cost per hectare per day would be approximately $23.84, a number achieved by many semi-intensive shrimp farms in Latin America. His growth rate is a big plus.
Billy Setio (firstname.lastname@example.org): Brian, in Indonesia the average farm gate production cost is usually around $3.00 to $3.30 a kilogram ($1.26 to $1.50 a pound) to produce 50-count whole shrimp. Farmers stock 120-150 PLs a square meter and harvest after 120 days with a FCR of 1.5. Some farmers have farm gate costs of less than $3.00 because they exchange more water. The cost may seem high but the yield is around 17 to 25 metric tons per hectare.
Why don’t you try smaller, 2,500 to 3,000-square-meter ponds, higher stocking densities and minimum water exchange? Your capital costs would be higher and your energy costs would be much higher, but your pumping costs would be much lower. Break down your costs for labor, pumping and electricity, which, I suspect, are the main operational cost in your country.
In Indonesia, the rule of thumb is that your feed costs should equal all your other operating costs.
Brian Montrose (email@example.com): Thanks for the info Billy. Although production costs per pound are lower in Honduras than they are in Indonesia, the larger shrimp that you produce are worth a lot more than ours, and your yields per hectare are more than 25 times larger than ours. Our FCR is around 1.00. In the future, as you suggested, we would like to replace some pumping cost with more aeration, but only in our nurseries.
Ramon Castillo (firstname.lastname@example.org): Hello Brian, we still don’t have enough real data on production costs on our super-intensive experimental shrimp farm, but our initial estimate to produce a kilogram of shrimp is about $3.50 ($1.59 a pound).
Billy Setio (email@example.com): Brian, I suggest you skip the nursery phase and stock directly into growout ponds. I tried nursery ponds for a year and always had big problems when I transferred the juveniles to the growout ponds. Why face that hassle when you can stock directly?
I changed a 600-m2 nursery pond into a growout pond, stocked it with 110,000 PLs and harvested 1.8 to 2 metric tons of 20-gram shrimp. I can’t explain it scientifically, but the smaller the pond size, the easier it is to manage the water quality. As I said before, 2,500 to 3,000 m2 is a good size, the squarer the better.
You probably start with a nursery phase in the hope of getting an additional crop every year. Why not try to shorten the growout period and grow larger shrimp?
Daniel Gruenberg (firstname.lastname@example.org): I agree with Billy. The only reason I can think of for using nursery ponds is to get a head start on the season by nursing juveniles during the late winter and early spring months. Otherwise a well-managed pond will perform better with direct stocking.
Pamindangan Farm (email@example.com): Dear Brian, I think you should increase your stocking density above 12/PLs/m2, which would present a new set of problems, but your production would be higher.
Eric De Muylder (firstname.lastname@example.org): I don’t think stocking density is the point, and it doesn’t influence growth until a certain level is reached, probably 5 kg/m³, or so. The only important parameter is keeping oxygen levels high enough till the end of the cycle. This means feeding all night and still having a minimum of four parts per million (PPM) of dissolved oxygen (DO) in the morning. In any other case, whether you stop feeding at night or your DO is lower in the morning, your growth will start slowing down.
Every shrimp farmer can easily calculate and knows very well at which biomass DO becomes problematic. It is easy to calculate how much you can stock to reach a target average weight at that biomass. Unfortunately, shrimp farmers always stock a little high and then finish the production cycle with DO problems, reduced growth, lower survival and higher FCRs. This all seems logical and basic, but in 20 years, I have never seen a farm that did not get into low DO problems towards the end of the cycle.
Pamindangan Farm (email@example.com): Hey Eric, the goal of increasing stocking density that I mentioned earlier is to produce higher yields, nothing to do with enhancing growth, which is a completely different topic.
I agree that most shrimp farmers try to stock a little more than what is expected as the overall goal is to make more money. At the end of the day, the main key is a balance between production and profit. I don’t agree, however, that every farm has DO problems at harvest time. Of course it is understandable that DO drops as the shrimp get bigger and the pond becomes more “dense”. You probably only have about 50% control of the oxygen levels in your ponds; nature controls the other 50%. If you feed (or overfeed) throughout the night and DO gets low in the morning, you can’t really blame nature, can you?
I am rather amazed that you have not seen a farm with sustainable DO towards the end of the production cycle. Perhaps you should visit some of the more successful intensive to super-intensive farms in Indonesia or Thailand. My harvest at the end of November ranged from 16.5 to 20.4 gram animals with stocking densities ranging from 90 to 120 PLs/m2. The last DO reading before the harvest on December 20, 2012, was 3.7 to 4.5, not excellent, but not problematic either. The survival rate, FCR and daily growth were normal.
Prakesh Srinivasen (firstname.lastname@example.org): Dear Mr. Pamindangan Farm, I think if you have no problems with DO you must know some tricks that you’re not telling us about.
Pamindangan Farm (email@example.com): I’m not sure what you meant by tricks. I don’t use hydrogen peroxide (H2O2) or sodium percarbonate (2Na2CO3 · 3H2O2) that many here perceives as oxygen enhancers. At night, my last feeding is usually around 10:00 to 11:00 p.m. Sometimes I use CaCO3 for liming. Aeration is rather high as my density is rather high; a rule of thumb is about 400-500 kg of shrimp per horsepower of aeration. The rest is just me praying that everything turns out OK and then working very hard to make sure that it does. No tricks.
Prakesh Srinivasen (firstname.lastname@example.org): English is not my first language. I was not suggesting that you were using bad tricks. I think aeration is very important and praying is always good. I meant to say that if you can work with high densities and have no problems, you are a good shrimp farmer. Like Eric, I have not seen high-density shrimp farms without DO problems at the end of the season. I have not seen any very good farms yet, and hope I can see one like yours soon. Wishing you the best of luck.
Larry Drazba (email@example.com): A second important reason for using nursery ponds is biosecurity, which is easier in intensive units, where the risk of exposure can be isolated to a number of small ponds. Farmers who rely on a semi-intensive growout really benefit from this approach.
Brian Montrose (firstname.lastname@example.org): I think nursery ponds have many advantages:
• They allow more efficient use of the farm’s total growing space.
• They shorten the growout period.
• They increases the weighted average growth rate in the total area of the farm.
• They increase the efficiency of using expensive high protein feeds.
• They can be enclosed to protect against cold fronts and to eliminate bird predation.
• They allow more flexibility in seedstock management.
The success of nurseries depends on the success of transferring the juveniles to growout ponds. Typically they have been built in batteries at one location on the farm, and then the juveniles are transferred around the farm in trucks, which places a limitation on the transfer size of the shrimp. When the nurseries are adjacent to growout ponds, transfers are easier.
I have heard about the use of pumps to transfer juveniles and have talked to many who have used them, however I am still not convinced that they are the best way to move large numbers (10,000 kg of 8g juveniles, for example) within a two hour period. I would like to hear from anyone who has experience with this magnitude of a transfer.
Brian Montrose (email@example.com): Pamindangan, yes I do agree that smaller ponds are in general more productive. It could be that in large ponds (greater than 12 hectares), the bottom is not the same quality throughout the pond and some shrimp spent too much time in bad patches. In smaller ponds, the bottom is easier to manage, so the shrimp can’t wander into bad patches.
Pamindangan Farm (firstname.lastname@example.org): Prakesh, in a way I sacrifice phenomenal growth (0.25 gram per day and above) to maintain decent water quality. I don’t consider my feeding aggressive, and so far I have not been able to produce the same size in less than 100 days of growout. So I don’t consider myself a good farmer at all, a conservative one maybe. Wishing you the best of luck.
Brian, I find it’s more difficult to maintain the same water quality parameters in larger ponds and those with awkward shapes (for example, very long rectangles). Have you had any experience with nursery ponds? I failed rather miserably with mine because of high mortalities during the transfer from the nursery to the growout ponds. The growth of the shrimp that survived the transfer was pretty abysmal, due perhaps to lack of acclimatization? Since then I have stopped using nursery ponds.
Anyway, back to your original question, my cost of production is approximately $3.10 to $3.50 a kilogram ($1.41 to $1.59 a pound). That’s rather high. I rotate my ponds so that some are freshly stocked, some are in mid-cycle and others are ready to harvest. It’s quite difficult for me to divide the cost of things such as electricity and fuel for each block because they are paid in total for the whole farm.
Freek Huskens (email@example.com): Hi Billy, can you provide a breakdown of your various production costs (PLs, labor, energy, feed) as a percent of your total costs? What is tonnage per hectare per crop? How many actual—not theoretical—crops do you get a year?
Billy Setio (firstname.lastname@example.org): Hi Huskens, this year I tried to get three crops. The first crop was a loser. With the second crop, I averaged 20 metric tons per hectare. With the third crop (just completed), I averaged 27 metric tons per hectare. My objective is to get 20-gram shrimp in 90 to 95 days with a FCR of 1.3. In 2012, I achieved that goal with the second and third crops. The first crop was during the rainy season. In February and March 2012, the rain was crazy as hell and my salinity dropped from 36 parts per thousand to less than 20 ppt overnight and my biofloc collapsed.
My feed costs have equaled my other operation costs for the last three years when the output was 20-25 tons per hectare. Operating costs include PL-10s, electricity, gasoline for pumping, maintenance, probiotics, liming, carbon supply and salaries and bonus for employees.
As a rule of thumb, if you stock 120 PLs per square meter, you should be targeting 20 to 22 tons per hectare. If you stock 150 PLs/m2, you should be able to get 25-30 tons per hectare. Remember, the game is all about survival rate and size. If you get good numbers on both, you win the game, all your costs will be covered and you will make a profit.
email@example.com: Dear Pamindangan, if you're doing good pond management, you won't have DO problems until harvest. I've stocked between 100 and 120 PLs/m2 and harvested them at an average body weight of 16.6 grams with 83% survival. During the last month of culture, our DO readings were 4.8 to 5.6. DO level is not a problem at all. Hope you get to see some well managed farms.
Shrimp News: I had to do some guessing while summarizing this report. If I made a mistake on any of your comments, please let me know and I’ll correct them.
Sources: 1. The Shrimp List (a mailing list for shrimp farmers). Subject: Farm Gate Cost Per Pound of Whole Shrimp. December 13-20, 2012. 2. Summarized by Bob Rosenberry, Shrimp News International, December 23, 2012.