Economic Overview of Biofloc-

Dominated, Super-Intensive Litopenaeus

vannamei Grow-out Raceway

Terry Hanson, Ph.D.

Auburn University
School of Fisheries, Aquaculture and Aquatic Sciences

Biofloc Workshop WAS Seattle, WA February 10, 2014

Overview of Todays Talk
Introduction
Bio-economic shrimp production model
Factors affecting profitability
Comparison of last five years of trials
Technology, production, enterprise budgets and
cash flow
Whats best?
Q&A
Introduction
Indoor super-intensive recirculating systems
continues to attract attention
High quality shrimp
Produced under controlled conditions
Drawbacks
High initial investment
Volatile shrimp prices
Economic analyses performed on:
Several years of trials conducted at the Texas AgriLife
Research Mariculture Lab at Flour Bluff, Corpus Christi,
Texas
 Earlier Study Findings
Many factors affect the COP and financial viability
Some are more controllable than others
More controllable
Location choice & its impact on investment, inputs &
costs
Increasing stocking density and juvenile size
Reducing crop duration => more crops per year
Nursery and growout survival
FCR
Water usage
Less controllable
Growout and juvenile feed cost
Year round supply of PLs
Shrimp selling price
Economics What is the measure?
Cost of production
Investment
Net return
Net present value
Internal rate of return (IRR)
Payback period
Economics What is the measure?
Changing price for shrimp, feed cost, etc.
Set infrastructure
Comparison of trials run over time
Measures of profitability
Enterprise Budget => sales, operating costs,
investment costs, net returns, cost per pound
produced
Cash flow => net present value, internal rate of
return, payback period
What the Bio-economic model does?
Extrapolates research results to commercial-
scale operations
Calculates cost of production
Through sensitivity analyses, determine:
Critical variables most affecting profitability
Variable range for profitability

Economically viable options for each system

Economic Model User Input Spreadsheets
Parameters to Enter
Biological parameters
Stock density, survival, growth rate, initial PL and harvest size,
FCR
With or without nursery component
Physical parameters
Growout/Nursery rearing tanks, greenhouses and service areas
Length, width, depth
Production cost information
Shrimp selling price & alternative ways to enter them
Variable input prices.
Capital investments, interest and tax rates
Land and tax costs
 Economic Model User Input Spreadsheets, Main Parameters to Enter
Commercial Bio-secure Indoor Recirculating Saltwater Shrimp Production System
Revised 2-8-14
This model represents a feasibility study of a bio-secure recirculating shrimp nursery and grow-out production system
without access to saltwater.
Instructions for PARAMETERS to be HI-35, 324pl/m3, 4.7 g to 27.22g, 1.59 FCR, 77
ENTERED: WAS 2014 Feb 2014 days
Cells with RED fonts are those that YOU can ENTER your own numbers to run a projection.
Cells with BLUE fonts are those that should NOT be adjusted by anyone.
Cells with BLACK fonts are those that are calculated and are NOT to be adjusted.
DESCRIPTION OF GROW-OUT COMPONENT

Cost Unit Quantity Remarks

Biological Parameters
Initial Stocking density PL/m3 324 As per Tzachi Samocha's team
Survival rate % 93.1% As per Tzachi Samocha's team
Growth rate g/wk 2.05 As per Tzachi Samocha's team
Stocking size g 4.70 As per Tzachi Samocha's team
g
Desired harvest size 27.22 As per Tzachi Samocha's team
g feed/g
shrimp,.yield,
Net feed conversion kg/m3 1.59 As per Tzachi Samocha's team
Length of growout crop days 77 As per Tzachi Samocha's team
No. of GO crops per year # 4.7 Calculated
Economic Model User Input Spreadsheets, Main Parameters to Enter

Physical Dimensions of Rearing Tanks, m2 500

Rearing tank length ft & m 180 54.86
Rearing tank width ft & m 30 9.11
Center aisle width ft & m 0.00 0.00
Rearing tank depth ft & m 3.70 1.13
Tank & Greenhouse Facility Information
Rearing tanks per house # 8.00 8.00
Nursery tanks per house # 2.00 2.00
Total rearing greenhouses # 1.00 1.00
Greenhouse length ft & m 408.00 124.36
Greenhouse width ft & m 138.00 42.06
Total rearing area:
Growout area ft2 & m2 43,056 4,000
Nursery area ft2 & m2 10,764 1,000
Sub-total ft2 & m2 53,820 5,000
Economic Model User Input Spreadsheets, Main Parameters to Enter
DESCRIPTION OF NURSERY COMPONENT
Item Unit Quantity
Biological Parameters PL 12 stocked, millions 3.44
PL12 stocking density PL12/m2 405
Survival rate % 80%
Growth rate g/wk 0.3500
Stocking size g 0.0010
Desired harvest size g 4.70
Net feed conversion 1.30
Length of shut-down period day/crop 2.80
Annual rate of nursery capacity usage
Year 1 % 100%
Year 2 % 100%
Year 3 % 100%
Year 4 % 100%
Year 5 % 100%
Length of nursery crop days 40
No. of NURSERY crops per year # 8.50
No. of weeks in facility in operation wk/yr 52
Physical Dimensions of Nursery Tanks
Nursery tank length ft 180
Nursery tank width ft 29.90
Center aisle width ft 0.00
Nursery tank depth ft 3.70
Tank & Greenhouse Facility Information
Nursery tanks per house # 2.00
Greenhouse length ft 408.00
Greenhouse width ft 138.00
Economic Model User Input Spreadsheets, Main Parameters to Enter
Annual production from system lb & kg 338,044 153,308
PRODUCTION COST INFORMATION
Shrimp, whole, heads-on, selling price, Ave. % change & $/lb $3.27
VARIABLE COST ITEMS
PL 12 cost from another commercial nursery $/1000 $8.00
Electricity cost $/kwh $0.08
Electricity usage kWh per day 1,359
Electricity cost kWh per day per 10 GH 1,359
Grow-out feed quantity
- GO Feed per raceway per crop lb 11,913
- GO Feed per GH per crop (8 GO raceways) lb 95,305
- GO Feed per GH per year (8 GO raceways) lb 444,756
- GO Feed per FARM per year (80 GO raceways) lb 444,756
Grow-out feed cost Feed Discount & $/lb $0.8740
Nursery feed quantity lb kg
- Mix of larval diets for 1 GH (2 nursery RW) lb & kg 46,405 21,045
- Mix of larval diets for ALL GH (20 nursery RW) lb & kg 46,405 21,045
Feed discount & $/lb &
Nursery feed cost, mix of larval diets $/kg $0.549 $1.21
Nursery feed cost, mix of larval diets $/ton $1,097.51
Nursery feed cost, mix of larval diets for 1 GH/year $/year for 2 RW (in 1 GH) $25,465 $25,465
Nursery feed cost, mix of larval diets for ALL
GH/year $25,465 $25,465
Economic Model User Input Spreadsheets, Main Parameters to Enter
Artemia cysts $/lb $27.50
PL 40-9 w/V-Pak 1/2 Crumble blend $/bag (25kg) $22.89
PL 40-9 w/V-Pak 2/3 Crumble blend $/bag (25kg) $22.25
PL 40-9 w/V-Pak 5/64" pellet (1.98 mm) $/bag (25kg) $25.00
Telephone expense $/wk $50.00
Gasoline cost $/gal $3.30
Diesel cost $/gal $3.95
Natural gas cost Discount % & $/therm $0.00
Annual heating costs PER GREENHOUSE $/year 0
- Percent decrease in therms required per GH %
Liquid oxygen tank rental $/month for 11,000 gal tank 1 $1,500
- Liquid oxygen supply 100 ft.3 volumes / day / GH : Price 147.84
- Liquid oxygen supply price discount Discount %
Water, fresh (initial fill, evaporation refill and sludge
mix) $/m3 & $/1,000 gallon $0.14
Volume of water required to fill ALL raceways 5,639 $208
Volume of water required to replace evaporation, 80 gal/day/10 GH &
RW $/d/10GH 23,047 $3.23
Trace minerals (water supplement) $/year/GH $10,000
Sludge removal $/gallon $15.00
Salt, Red Sea $/2,220/lb bag $650.00
Sodium bicarbonate $/lb $0.165
 Economic Model User Input Spreadsheets, Main Parameters to Enter
CAPITAL COSTS, INTEREST and TAX RATES
Capital outlay index % 100%
Capital Financing $ investment required $991,997
- Percentage of capital investment from BANK % 100% $991,997
- Percentage of capital from EQUITY % 0% $0
Investor Initial Operating Cost Contribution $ $0
Annual long-term capital cost % 8.00%
Length of long-term loan years 7
Annual intermediate-term capital cost % 8.00%
Length of intermediate-term loan years 7
Annual operating cost loan % 8.00%
Annual grow-out liability insurance 0.21% of total investment 991,997 $2,067
What percent of total investment? 0.21%
Land Cost
Land cost (Iowa, near Mason City) $/ac $10,000
Land acres per Greenhouse acres/GH 1.6 $16,000
Total land required for entire Farm:
Land for GH acres/farm 1.6
Land for Waste treatment acres/farm 4.0
Land for processing plant & office acres/farm 1.0
Total land required for GH acres 6.6
Land preparation cost $/acre 200.0
Tax for equipment purchase & building cost % 0.00% $991,997
Annual property tax (a*b*c) $/acre $9.48
a. Land use value $/acre 645
b. Assessment rate % 15
c. Millage rate mills 98
Financial and Economic Spreadsheets
1. Investment and replacement costs
2. Intermediate- and long-term loan repayment
schedules
3. 10-year financial cash flow
4. Economic costs and returns
 OUTPUT from the Economic Model

Cash Flow for 10 Years

10-yr Cash Flow for Super-intensive Shrimp Recirculating Sysem. Cash flow, Year 1, for a recirculating bio-secure shirmp production facility.
Year 1
Month Annual Jan-01 Feb-01 Mar-01 Apr-01 May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Total
Price, $/lb Unit Quantity
Shrimp sales price, heads-on 3.27 18g (21-25 count) 3.29 3.33 3.38 3.43 3.43 3.32 3.23 3.21 3.19 3.13 3.12 3.13
Shrimp produced, heads-on lb 338,044 71,924 71,924 71,924 71,924 287,697

BEGINNING CASH BALANCE 0 500 500 180,775 117,783 54,620 230,556 -230,364 500 500 500 161,637 0
Farm-gate shrimp value, heads-on $3.27 $/lb 338,044 0 0 243,438 0 0 238,928 0 231,001 0 0 224,129 0 937,496
TOTAL CASH INFLOW 0 500 243,938 180,775 117,783 293,548 230,556 637 500 500 224,629 161,637

Operating Expenses
Feed
Grow-out $1,748 ton 222 32,393 32,393 32,393 32,393 32,393 32,393 32,393 32,393 32,393 32,393 32,393 32,393 388,717
Nursery $1,098 ton 23 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 25,465
Labor, nursery and growout
Farm management $140,875 annual 1 11,740 11,740 11,740 11,740 11,740 11,740 11,740 11,740 11,740 11,740 11,740 11,740 140,875
Hired labor, hourly $62,818 hour 1 5,235 5,235 5,235 5,235 5,235 5,235 5,235 5,235 5,235 5,235 5,235 5,235 62,818
Hatchery supplies $962 crop 8.5 682 682 682 682 682 682 682 682 682 682 682 682 8,179
Post larvae, PL12 $8.00 $/1,000 3,444 3,242 2,296 2,296 2,296 2,296 2,296 2,296 2,296 2,296 2,296 2,296 2,296 28,501
Utilities
Fuel, gasoline $3.30 $/gallon 1,096 301 301 301 301 301 301 301 301 301 301 301 301 3,617
Fuel, diesel $3.95 $/gallon 1,460 481 481 481 481 481 481 481 481 481 481 481 481 5,767
Electricity $0.08 $/kwh 1,359 3,370 3,044 3,370 3,261 3,370 3,261 3,370 3,370 3,261 3,370 3,261 3,370 39,677
Water, fresh
- Initial 80 RW fill $0.14 $/1,000 gal 1,489 208 208
- Evaporation replacement $0.14 $/1,000 gal 8,412,155 100 90 100 97 100 97 100 100 97 100 97 100 1,178
Chemicals
Salt, Red Sea Salt $650 bag (2220 lb/bag) 90 58,500 58,500
Sodium bicarbonate $0.165 $/lb 54,000 743 743 743 743 743 743 743 743 743 743 743 743 8,910
Mineral additive to water $10,000 $/year/GH 1 10,000 10,000
Liquid oxygen
- Liquid oxygen tank rental $1,500 11K-gal tank/mo 1 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000
- Liquid oxygen supply $0.40 100 ft. 3 vol/RW/d 147.84 1,833 1,656 1,833 1,774 1,833 1,774 1,833 1,833 1,774 1,833 1,774 1,833 21,585
Sludge removal $15.00 $/gallon 45 168 168 168 168 168 168 168 168 168 168 168 168 2,017
Telephone expense $200.00 $/month 12.00 200 200 200 200 200 200 200 200 200 200 200 200 2,400
Insurance 0.21% %/investment $ 991,997 2,067 2,067
Property tax $9.48 $/acre 7 63 63
Scheduled debt payments:
Long-term
Principal 921,603 103,286 103,286
Interest 8.00% percent 317,498 73,728 73,728
Intermediate-term
Principal /1 70,395 7,889 7,889
Interest 8.00% percent 24,251 5,632 5,632
TOTAL CASH OUTFLOW 138,467 62,650 63,163 62,992 63,163 62,992 250,177 63,163 62,992 63,163 62,992 63,163 1,019,077
Financial and Economic Spreadsheets
1. Net Present Value
Calculation of payback period, rate of return, net present
value and internal rate of return
Graphical output of annual cash flows using average
monthly shrimp price plus and minus 1 standard deviation
2. Sensitivity Analyses
Net returns, total receipts and total cost with respect to:
Changes in survival and growth rate
Cost of production and IRR with respect to:
Changes in PL stocking density and growth rate

3. Enterprise Budget
OUTPUT from the Economic Model
Ten year calculation of payback period, net present value and internal rate of return
HI-35, 324pl/m3, 4.7 g to 27.22g, 1.59 FCR, 77 days
Item 0 1 2 3 4 5 6 7 8 9 10
Gross receipts 0 937,496 1,176,127 1,172,674 1,172,603 945,138 1,176,127 1,404,291 938,837 1,171,356 1,040,700
Total costs 0 1,249,941 1,242,665 959,423 959,423 959,423 959,423 959,423 768,888 768,888 768,888
Investor dividend 0 0 0 0 0 0 0 0 0 0 0
Taxable income 0 -312,445 -66,537 213,251 213,180 -14,285 216,704 444,868 169,949 402,469 271,812
Income taxes 0 0 0 0 0 0 0 0 0 0 0
Net income 0 -312,445 -66,537 213,251 213,180 -14,285 216,704 444,868 169,949 402,469 271,812
Depreciation 0 126,610 126,610 126,610 126,610 126,610 126,610 126,610 126,610 126,610 126,610
Net income + depreciation 0 -185,835 60,072 339,860 339,789 112,325 343,314 571,478 296,559 529,078 398,422
Initial Investment and Replacement
costs 0 0 0 0 0 0 510,717 0 61,479 0 50,297
-
Net cash flow 991,997 -185,835 60,072 339,860 339,789 112,325 -167,403 571,478 235,080 529,078 348,125

average price 3.27

Average
Pay back period yr 4.55
Discount rate % 10.00%
Net present value $ 102,641
Internal rate of return % 11.72%

10-year Annual Net Cash Flow.

$1,000,000
$750,000
$500,000
$250,000
$0
-$250,000 0 1 2 3 4 5 6 7 8 9 10
-$500,000
-$750,000
-$1,000,000
Year
OUTPUT from the Economic Model
E Enterprise budget (receipts, variable costs, fixed costs, net returns to land) and breakeven prices for a super-intensive
shrimp production system consisting of one greenhouse (with 8 growout RWs and 2 nursery RWs)

n
based on average of 10-yr Cash Flow. HI-35, 324pl/m3, 4.7 g to 27.22g, 1.59 FCR, 77 days
Unit Quantity Price or Value or Percent Value/Cost
Cost / unit Cost of Costs per lb

t
1. Gross Receipts
Farm-gate Shrimp value, whole, heads-on lb 338,044 3.27 $1,104,215 $3.27
2. Variable Costs

e
Feed
Grow-out ton 222 $1,748 $388,717 46.6% $1.15
Nursery ton 23 $1,098 $25,465 3.1% $0.08

r
Labor, nursery and growout
Farm management annual 1 $140,875 $140,875 16.9% $0.42
Hired labor, hourly hour 1 $62,818 $62,818 7.5% $0.19

p
Hatchery supplies crop 9 $962 $8,179 1.0% $0.02
Post larvae, PL12 $/1,000 3,444 $8.00 $27,650 3.3% $0.08
Utilities
Fuel, gasoline $/gallon 1,096 $3.30 $3,617 0.4% $0.01

r Fuel, diesel
Electricity
Water, fresh
$/gallon
$/kwh
1,460
1,359
$3.95
$0.08
$5,767
$39,677
0.7%
4.8%
$0.02
$0.12

i
- Initial RW filling $/ m3 water 1,489 $0.14 $208 0.0% $0.00
- Evaporation replinishment gal / all GHs / day 23,047 $3.23 $1,178 0.1% $0.00
Chemicals

s
Salt, Red Sea Salt bag (2220 lb/bag) 90 $650 $5,850 0.7% $0.02
Sodium bicarbonate 2450lb (pallet) 54,000 $0 $8,910 1.1% $0.03
Mineral additive to water $/year $10,000 1.2% $0.03

e
Liquid oxygen
- Liquid oxygen tank rental 6K-gal tank/mo 1 $1,500 $18,000 2.2% $0.05
- Liquid oxygen supply 100 ft. 3 vol/RW/d 147.8 $0.40 $21,585 2.6% $0.06

B
Sludge removal $/gallon 45 $15.00 $2,017 0.2% $0.01
Telephone expense $/month 12 $200.00 $2,400 0.3% $0.01
Interest on Operating Capital dollar $772,911 8.00% $61,833 7.4% $0.18

u
TOTAL VARIABLE COSTS $834,744 100.0% $2.47

3. Income Above Variable Cost $269,471 $0.80

d 4. Fixed Cost
Land charge (not included) dollar 0 8.00% $0 0.0% $0.00

g
Facility depreciation dollar $114,531 58.5% $0.34
Machinery depreciation dollar $12,079 6.2% $0.04
Repair & maintenance annual $31,831 16.3% $0.09
Interest on RW & GH Construction dollar $32,452 16.6% $0.10

e Interest on Equip./Mach. Purchases

Insurance on Facilities & Equipment
Property tax $/acre
dollar
%/investment $ $991,997
6.60
0.21%
$9.48
$2,816
$2,067
$63
1.4%
1.1%
0.0%
$0.01
$0.01
$0.00

t
TOTAL FIXED COSTS $195,838 100.0% $0.58
$235,006
6. Total of All Specified Expenses $1,068,200 $1,030,583 $3.05

7. Net Returns Above All Specified Expenses /1 $73,632 $0.22

Investment Requirements (entered by user)
Total Total Econ. Average Annual Annual Annual Annual
Item cost cost life investment depreciation interest Repairs & Repairs &
Per GH Per Farm Maintenance Maintenance
($) ($) (yr) ($) ($) ($) (%) ($)
A. Capital costs
Greenhouse components
- Structure $55,429 $55,429 15 $27,715 $3,695 $2,217 1.67% $924
- Covering $18,307 $18,307 5 $9,153 $3,661 $732 5.00% $915
- Interior autmated aluminized shade system $50,297 $50,297 9
- Heat system $3,743 $3,743 7 $1,871 $535 $150 3.57% $134
- Cooling systems $20,300 $20,300 7 $10,150 $2,900 $812 3.57% $725
- Controls $2,436 $2,436 7 $1,218 $348 $97 3.57% $87
- Concrete for installation $14,747 $14,747 20 $7,374 $737 $590 1.25% $184
- Pre-paid freight $9,153 $9,153 20 $4,577 $458 $366 1.25% $114
- Installation cost $93,548 $93,548 20 $46,774 $4,677 $3,742 1.25% $1,169
Greenhouse Electrical System
- Materials $5,476 $5,476 5 $2,738 $1,095 $219 5.00% $274
- Labor $14,309 $14,309 20 $7,154 $572 1.25% $179
Raceway Construction
- Materials $139,790 $139,790 5 $69,895 $27,958 $5,592 5.00% $6,989
- Labor $40,545 $40,545 20 $20,273 $2,027 $1,622 1.25% $507
- Equipment $4,165 $4,165 5 $2,083 $833 $167 5.00% $208
Catwalk system $0 $0 5 $0 5.00% $0
Mechanical & Lab Building
- Materials $72,715 $72,715 5 $36,357 $14,543 $2,909 5.00% $3,636
- Labor $32,045 $32,045 20 $16,023 $1,602 $1,282 1.25% $401
- Equipment $6,981 $6,981 5 $3,491 $1,396 $279 5.00% $349
Raceway Heating System
- Labor $12,205 $12,205 20 $6,102 $610 $488 1.25% $153
- Equipment $72,312 $72,312 5 $36,156 $14,462 $2,892 5.00% $3,616
Major Water Treatment and Control Equipment
- Labor $18,859 $18,859 20 $9,430 $943 $754 1.25% $236
- Equipment $92,592 $92,592 5 $46,296 $18,518 $3,704 5.00% $4,630
Raceway Drains and Harvest Pipes
- Materials $8,348 $8,348 5 $4,174 $1,670 $334 5.00% $417
- Labor $4,001 $4,001 20 $2,001 $200 $160 1.25% $50
Water Return Piping System
- Materials $19,037 $19,037 5 $9,519 $3,807 $761 5.00% $952
- Labor $7,638 $7,638 20 $3,819 $382 $306 1.25% $95
Air Supply Piping System and RW Aeration
- Materials $10,723 $10,723 5 $5,362 $2,145 $429 5.00% $536
- Labor $3,274 $3,274 20 $1,637 $164 $131 1.25% $41
Feed Delivery System
- Materials $50,000 $50,000
- Labor $10,000 $10,000
Hatchery evaluation lab & building $2,050 $2,050 5 $1,025 $410 $82 5.00% $103
Effluent storage and evaporation ponds $0 $0 5 $0 $0 $0 5.00% $0
Construction Estimate, fencing, paving, stone & a $22,826 $22,826 5 $11,413 $4,565 $913 5.00% $1,141
Concrete pads and installation for O2 tanks $3,750 $3,750 20 $1,875 $188 $150 1.25% $47
SUBTOTAL $921,603 $921,603 $405,653 $114,531 $32,452 1.25% $28,812

B. Equipment/machinery costs
Hatchery Equipment $3,395 $3,395 5 $1,697 $679 $136 5.00% $170
Stand-by generator $17,000 $17,000 5 $8,500 $3,400 $680 5.00% $850
Office equipment $10,000 $10,000 5 $5,000 $2,000 $400 5.00% $500
All terrain vehicle (golf cart w/ bed) $5,000 $5,000 5 $2,500 $1,000 $200 5.00% $250
Large tractor $35,000 $35,000 7 $17,500 $5,000 $1,400 3.57% $1,250
Small tractor $0 $0 7 $0 $0 $0 3.57% $0
SUBTOTAL $70,395 $70,395 $35,197 $12,079 $2,816 $3,020

TOTAL $991,997 $991,997 $440,850 $126,610 $35,268 $31,831

 Model Assumptions
Assume production cycles can be geared up to run
smoothly in back-to-back runs over the long term

PL10s are available year-round and are not an

obstacle

Shrimp selling price is known

No one has a crystal ball that works all the time!

Biological changes require Researcher and manager

knowledge and judgment to best comprehend associated changes
that will occur
Economic Analyses
Critical Factors that Affect
Profitability
 Change in NPV and IRR with 20%
Improvement in Critical Production Factors
Grow-out Change from Base
Components Change NPV $mil. IRR %
1. GO survival +20% 10.48 13.7
2. Shrimp price +20% 9.57 12.5
3. GO stocking density +20% 6.16 8.1
4. Initial investment -20% 2.24 6.8
5. GO growth rate +20% 2.23 6.4
6. Nursery & GO feed -20% 2.37 3.1
7. Source of financing 20/80-0/100 1.79 2.4
8. Nursery survival +20% 1.12 1.5
9. PL cost -20% 1.01 1.2
Compared to Base Scenario: $10.8 million and 25.3% IRR
Research for the Future
Improving technologies are:
Increasing growth and production rates
Improving feeds for these systems

Genetic selection - higher yields over time

Reducing variable and fixed costs

Financial analyses are focusing research

Improves competitiveness
Marketing opportunities
Economic Analysis of Super-
intensive Recirculating Shrimp
Production Systems
 Economic Analysis of Two Feeds in Biofloc-
Dominated Super-Intensive Shrimp Production
Systems for the Pacific White Shrimp, 2012
Terry Hanson, Andre Braga, Vita Magalhaes,
Timothy C. Morris, Bob Advent and
Tzachi M. Samocha

Auburn University
Department of Fisheries and Allied
Aquacultures

Aquaculture 2013 Nashville, TN February 25, 2013

 Earlier Study Findings
Many factors affect the COP and financial viability
Some are more controllable than others
More controllable
Location choice & its impact on investment, inputs & costs
Increasing stocking density and juvenile size
Reducing crop duration => more crops per year
Nursery and growout survival
FCR
Water usage
Less controllable
Growout and juvenile feed cost
Year round supply of PLs
Shrimp selling price
Economic Analysis
Performed a 10-year cash flow analysis to estimate:
Cost of production, Net returns to land, Net present value, Internal rate of
return, and Payback period

Prices/Costs used in analysis

Shrimp sales price: averaged $7.20/kg ($3.27/lb)

Grow-out feed: Zeigler Brothers

Semi-Intensive (SI-35): $0.99/kg = $ 990/MT or $0.452/lb = $

904/ton
Hyper-Intensive (HI-35): $1.75/kg = $1,750/MT or $0.795/lb =
$1,590/ton
Juveniles production cost: $20.00/1,000

Interest rate for loans: 8%

Initial investment = $991,997

Economic Analysis
Study results extrapolated to:
One greenhouse system (GH)
Each GH consists of eight 500 m3/m2 grow-out
tanks and two 500 m3/m2 nursery tanks

Budget results are based on production figures

 Trial A 2011 Study Results
Fast Growth Line with HI-35

Water
RW Stocking Stock Harvest Days Growth SGR Sur Yield FCR Use Sal
(Juv/m3) (g) (g) (g/wk) (g/d) (%) (Kg/m3) L/1 kg (ppt)
1 500 1.9 22.16 81 1.75 0.25 87.6 9.66 1.39 169.0 18
2 500 1.9 23.63 82 1.86 0.27 81.5 9.59 1.44 160.8 18
3 500 1.9 23.36 82 1.83 0.26 80.7 9.40 1.45 149.0 18
4 500 1.9 23.79 83 1.85 0.26 79.3 9.39 1.45 161.0 18
5 500 1.4 25.12 85 1.95 0.28 78.9 9.87 1.44 148.2 30
Av. 23.61 83 1.85 0.26 81.6 9.58 1.43 157.6
SD 0.94 0.06 0.01 0.3 0.18 0.02 7.9
Economic Analysis
Study 1
Two diets (Zeigler Brothers); three replicates
Semi-Intensive (SI-35) 35% protein: $ 0.99/kg or $
0.452/lb
Hyper-Intensive (HI-35) 35% protein: $ 1.75/kg or $
0.795/lb

Each treatment conducted in three 40 m3 (68.5

m2) RWs
Juveniles from a cross between Taura resistant
and fast-growth genetic lines developed by
Shrimp Improvement Systems (Islamorada FL)
No water exchange
Two Diet Study: HI-35 v SI-35
Cross between Taura resistant and fast-growth genetic line
Water
Stocking Harvest Growth Sur Yield
RW Days FCR Use
(Juv/m3) (g) Size (g) (g/wk) (%) (Kg/m3)
(L/kg)
HI-35, 40 m3 RW
1 500 2.66 22.26 67 2.02 87.20 9.70 1.24 23.2
3 500 2.66 22.29 67 2.02 87.85 9.79 1.25 17.9
5 500 2.66 22.45 67 2.04 86.76 9.74 1.26 28.3
Average 500 2.66 22.33 67 2.03 87.27 9.74 1.25 23.1

SI-35, 40 m3 RW
2 500 2.66 19.06 67 1.69 93.04 8.87 1.4 21.1
4 500 2.66 20.81 67 1.87 84.78 8.82 1.41 25.5
6 500 2.66 19.49 67 1.73 86.71 8.45 1.48 22.7
Average 500 2.66 19.79 67 1.76 88.18 8.71 1.43 23.1
Economic Analysis

Study 2
Only HI-35 diet

Conducted in two 100 m3 (100 m2) RWs using

same strain; no water exchange
Study 2 - HI-35 Diet Conducted in Two
100 m3 (100 m2) RWs
Using Same Strain; No Water Exchange

Stocking Water
Harvest Growth Yield
RW Days FCR Use
Size (g) (g/wk) (Kg/m3)
(Juv/m3 ) (g) (L/kg)
HI-35, 100 m2 RW
B1 500 3.6 22.76 63 2.13 9.2 1.43 38.59
B2 500 3.6 22.67 63 2.12 8.86 1.53 44.00
Average 500 3.6 22.72 63 2.13 9.03 1.48 41.30
 Comparison of Production Results
From 2011 to 2012
HI-35 SI-35 HI-35
Treatment 2011 A
40m3 40m3 100m3
Stocking density (Juvenile/m3) 500 500 500 500
Survival rate (%) 81.6 87.3 88.2 79.5
Growth rate (g/wk) 1.85 2.03 1.76 2.13
Stocking size (g) 1.8 2.7 2.7 3.6
Harvest size (g) 23.6 22.3 19.8 22.7
FCR 1.43 1.25 1.43 1.48
Crop length (days) 83 67 67 63
Production (kg/m3) 9.58 9.74 8.71 9.03
 Comparison of Production Results
From 2011 to 2012
HI-35 SI-35 HI-35
Treatment 2011 A
40m3 40m3 100m3
Stocking density (Juvenile/m3) 500 500 500 500
Survival rate (%) +7.0%, +8.1%, -2.6% 81.6 87.3 88.2 79.5
Growth rate (g/wk) 1.85 2.03 1.76 2.13
Stocking size (g) 1.8 2.7 2.7 3.6
Harvest size (g) 23.6 22.3 19.8 22.7
FCR 1.43 1.25 1.43 1.48
Crop length (days) 83 67 67 63
Production (kg/m3) 9.58 9.74 8.71 9.03
 Comparison of Production Results
From 2011 to 2012
2011 HI-35 SI-35 HI-35
Treatment A 40m3 40m3 100m3
Stocking density (Juvenile/m3) 500 500 500 500
Survival rate (%) +7.0%, +8.1%, -2.6% 81.6 87.3 88.2 79.5
Growth rate (g/wk) +9.7%, -4.9%, +15.1% 1.85 2.03 1.76 2.13
Stocking size (g) 1.8 2.7 2.7 3.6
Harvest size (g) 23.6 22.3 19.8 22.7
FCR 1.43 1.25 1.43 1.48
Crop length (days) 83 67 67 63
Production (kg/m3) 9.58 9.74 8.71 9.03
 Comparison of Production Results
From 2011 to 2012
2011 HI-35 SI-35 HI-35
Treatment A 40m3 40m3 100m3
Stocking density (Juvenile/m3) 500 500 500 500
Survival rate (%) +7.0%, +8.1%, -2.6% 81.6 87.3 88.2 79.5
Growth rate (g/wk) +9.7%, -4.9%, +15.1% 1.85 2.03 1.76 2.13
Stocking size (g) +50%, +50%, +100% 1.8 2.7 2.7 3.6
Harvest size (g) 23.6 22.3 19.8 22.7
FCR 1.43 1.25 1.43 1.48
Crop length (days) 83 67 67 63
Production (kg/m3) 9.58 9.74 8.71 9.03
 Comparison of Production Results
From 2011 to 2012
2011 HI-35 SI-35 HI-35
Treatment A 40m3 40m3 100m3
Stocking density (Juvenile/m3) 500 500 500 500
Survival rate (%) +7.0%, +8.1%, -2.6% 81.6 87.3 88.2 79.5
Growth rate (g/wk) +9.7%, -4.9%, +15.1% 1.85 2.03 1.76 2.13
Stocking size (g) +50%, +50%, +100% 1.8 2.7 2.7 3.6
Harvest size (g) -5.5%, -16.1%, -3.8% 23.6 22.3 19.8 22.7
FCR 1.43 1.25 1.43 1.48
Crop length (days) 83 67 67 63
Production (kg/m3) 9.58 9.74 8.71 9.03
 Comparison of Production Results
From 2011 to 2012
2011 HI-35 SI-35 HI-35
Treatment A 40m3 40m3 100m3
Stocking density (Juvenile/m3) 500 500 500 500
Survival rate (%) +7.0%, +8.1%, -2.6% 81.6 87.3 88.2 79.5
Growth rate (g/wk) +9.7%, -4.9%, +15.1% 1.85 2.03 1.76 2.13
Stocking size (g) +50%, +50%, +100% 1.8 2.7 2.7 3.6
Harvest size (g) -5.5%, -16.1%, -3.8% 23.6 22.3 19.8 22.7
FCR -12.6%, 0%, +3.5% 1.43 1.25 1.43 1.48
Crop length (days) 83 67 67 63
Production (kg/m3) 9.58 9.74 8.71 9.03
 Comparison of Production Results
From 2011 to 2012
2011 HI-35 SI-35 HI-35
Treatment A 40m3 40m3 100m3
Stocking density (Juvenile/m3) 500 500 500 500
Survival rate (%) +7.0%, +8.1%, -2.6% 81.6 87.3 88.2 79.5
Growth rate (g/wk) +9.7%, -4.9%, +15.1% 1.85 2.03 1.76 2.13
Stocking size (g) +50%, +50%, +100% 1.8 2.7 2.7 3.6
Harvest size (g) -5.5%, -16.1%, -3.8% 23.6 22.3 19.8 22.7
FCR -12.6%, 0%, +3.5% 1.43 1.25 1.43 1.48
Crop length (days)-19.3%, -19.3%, -24.1% 83 67 67 63
Production (kg/m3) 9.58 9.74 8.71 9.03
 Comparison of Production Results
From 2011 to 2012
2011 HI-35 SI-35 HI-35
Treatment A 40m3 40m3 100m3
Stocking density (Juvenile/m3) 500 500 500 500
Survival rate (%) +7.0%, +8.1%, -2.6% 81.6 87.3 88.2 79.5
Growth rate (g/wk) +9.7%, -4.9%, +15.1% 1.85 2.03 1.76 2.13
Stocking size (g) +50%, +50%, +100% 1.8 2.7 2.7 3.6
Harvest size (g) -5.5%, -16.1%, -3.8% 23.6 22.3 19.8 22.7
FCR -12.6%, 0%, +3.5% 1.43 1.25 1.43 1.48
4.4
crops
Crop length (days) 83
/yr 67 67 63
Production (kg/m3) 9.58 9.74 8.71 9.03
 Comparison of Production Results
From 2011 to 2012
2011 HI-35 SI-35 HI-35
Treatment A 40m3 40m3 100m3
Stocking density (Juvenile/m3) 500 500 500 500
Survival rate (%) +7.0%, +8.1%, -2.6% 81.6 87.3 88.2 79.5
Growth rate (g/wk) +9.7%, -4.9%, +15.1% 1.85 2.03 1.76 2.13
Stocking size (g) +50%, +50%, +100% 1.8 2.7 2.7 3.6
Harvest size (g) -5.5%, -16.1%, -3.8% 23.6 22.3 19.8 22.7
FCR -12.6%, 0%, +3.5% 1.43 1.25 1.43 1.48
4.4 5.5
crops
Crop length (days)-19.3% 83
crops /yr67 67 63
/yr +25%
Production (kg/m3) 9.58 9.74 8.71 9.03
 Comparison of Production Results
From 2011 to 2012
2011 HI-35 SI-35 HI-35
Treatment A 40m3 40m3 100m3
Stocking density (Juvenile/m3) 500 500 500 500
Survival rate (%) +7.0%, +8.1%, -2.6% 81.6 87.3 88.2 79.5
Growth rate (g/wk) +9.7%, -4.9%, +15.1% 1.85 2.03 1.76 2.13
Stocking size (g) +50%, +50%, +100% 1.8 2.7 2.7 3.6
Harvest size (g) -5.5%, -16.1%, -3.8% 23.6 22.3 19.8 22.7
FCR -12.6%, 0%, +3.5% 1.43 1.25 1.43 1.48
4.4 5.5
crops
Crop length (days)-19.3%, -19.3% 83
crops 67 67
/yr 63
/yr +25%
Production (kg/m3) 9.58 9.74 8.71 9.03
 Comparison of Production Results
From 2011 to 2012
2011 HI-35 SI-35 HI-35
Treatment A 40m3 40m3 100m3
Stocking density (Juvenile/m3) 500 500 500 500
Survival rate (%) +7.0%, +8.1%, -2.6% 81.6 87.3 88.2 79.5
Growth rate (g/wk) +9.7%, -4.9%, +15.1% 1.85 2.03 1.76 2.13
Stocking size (g) +50%, +50%, +100% 1.8 2.7 2.7 3.6
Harvest size (g) -5.5%, -16.1%, -3.8% 23.6 22.3 19.8 22.7
FCR -12.6%, 0%, +3.5% 1.43 1.25 1.43 1.48
4.4 5.8
crops
Crop length (days)-19.3%, -19.3%, -24.1% 83
crops 67 67 63
/yr
/yr +32%
Production (kg/m3) 9.58 9.74 8.71 9.03
 Comparison of Production Results
From 2011 to 2012
2011 HI-35 SI-35 HI-35
Treatment A 40m3 40m3 100m3
Stocking density (Juvenile/m3) 500 500 500 500
Survival rate (%) +7.0%, +8.1%, -2.6% 81.6 87.3 88.2 79.5
Growth rate (g/wk) +9.7%, -4.9%, +15.1% 1.85 2.03 1.76 2.13
Stocking size (g) +50%, +50%, +100% 1.8 2.7 2.7 3.6
Harvest size (g) -5.5%, -16.1%, -3.8% 23.6 22.3 19.8 22.7
FCR -12.6%, 0%, +3.5% 1.43 1.25 1.43 1.48
Crop length (days)-19.3%, -19.3%, -24.1% 83 67 67 63
Production (kg/m3) +1.7%, -9.1%, -5.7% 9.58 9.74 8.71 9.03
Economic Analysis
Performed a 10-year cash flow analysis to estimate:
Cost of production, Net returns to land, Net present value, Internal rate of
return, and Payback period
Prices/Costs used in analysis
Shrimp sales price: averaged $7.20/kg ($3.27/lb)
Grow-out feed: Zeigler Brothers
Semi-Intensive (SI-35): $0.99/kg = $ 990/MT or $0.452/lb = $
904/ton
Hyper-Intensive (HI-35): $1.75/kg = $1,750/MT or $0.795/lb =
$1,590/ton
Juveniles production cost: $20.00/1,000
Interest rate for loans: 8%
Initial investment = $991,997
Economic Analysis
Study results extrapolated to:
One greenhouse system (GH)
Each GH consists of eight 500 m3/m2 grow-out
tanks and two 500 m3/m2 nursery tanks

Budget results are based on production figures

Summary of Production and Sales for Super-intensive
Recirculating Shrimp Production Systems
2011 Compared to 2012 Trials
Metric Units

HI-35 SI-35 HI-35

2011
40m3 40m3 100m3
Production, kg/crop 38,320 38,960 34,840 36,120
Crops per year 4.4 5.5 5.5 5.8
Production, kg/year 168,608 214,280 191,620 209,496
Production MT/year 169 214 192 209
Selling price, $/kg 7.20 7.20 7.20 7.20
Total Sales per year, $ 1,213,978 1,542,816 1,379,664 1,508,371
Summary of Enterprise Budgets for Super-intensive
Recirculating Shrimp Production Systems
2011 Compared to 2012 Trials
$/kg
HI-35 SI-35 HI-35
2011
40m3 40m3 100m3
Gross Receipts 7.20 7.20 7.20 7.20
Variable Costs 5.38 4.06 4.54 4.31
Income Above Variable Cost 1.82 3.14 2.66 2.89
Fixed Cost 0.59 0.47 0.53 0.48
Total of All Specified Expenses 5.97 4.53 5.07 4.79
Net Returns Above All Costs 1.23 2.67 2.13 2.41
Payback period, years 2.9 1.4 1.9 1.6
Net present value ($ mil.) 1.0 2.9 2.0 2.6
Internal Rate of Return (%) 15 27 20 30
 Conclusions
Many factors affect the COP and financial
viability

Can be feasible under certain biological and

economic conditions

Combination of small changes in many grow-

out components can lead to profitability
Opportunities for the Future
Tough times due to increasing input costs
GO feed price: $800 to $1,744; +118%

Improved technology continues to:

Increase growth rate
Improve FCR
Increase survival
Increase yield

Can technological improvements decrease COP to

overcome increases in input (feed) costs?
Without tech advances net return would be negative
Opportunities for the Future

Items needing attention

1. Year-round PL supply
2. Research must show back-to-back-to-back production
is possible

Financial analyses are focusing research to sharpen

competitiveness
Thank you! Questions?