- Economic effect of stocker catfish (Ictalurus punctatus)
production on farm profitability.
Steeve Pomerleau and Carole Engle
Traditionally, farmers understock 9-27 g fingerlings directly into
growout ponds in multiple-batch production. However, some use a
three-phase strategy, where fingerlings are raised to stocker-size
(27-340 g) in single-batch for one growing season, before transfer
to growout ponds. Does the use of stockers improve farm
productivity and profitability? A series of pond studies were
conducted at the University of Arkansas at Pine Bluff on
fingerling and stocker production and performance in growout
ponds. Enterprise budgets were developed based on three sizes of
farm (65, 130, and 260-ha) and eight production strategies. Five
strategies involved the production of stockers (114, 135, 176,
255, and 361-g) thereafter stocked in growout ponds at 11,250/ha,
in single-batch production. The three other strategies involved
understocking fingerlings (6, 12, and 37-g) directly into growout
ponds at 15,000/ha with 1,369 kg/ha of large 580-g catfish to
simulate multiple-batch production.
Results indicated two principal profit-maximizing strategies
(Table 1). One strategy was to understock 37-g fingerlings in
multiple-batch growout ponds. The other was to produce 255-g
stockers before transfer to growout ponds. Three main factors
affected the relative profitability of the 255-g stocker versus
the 37-g fingerling strategy. As farm size increased (Table 1) or
pond size decreased, the stocker strategy became more profitable
than the fingerling strategy because it used resources more
efficiently. The stocker strategy was not as profitable for small
farms or for larger ponds because it was more difficult to balance
the number of stockers produced with the number stocked in growout
ponds, resulting in wasted resources. The third factor was the
growth rate of the stockers in growout ponds. As the growth rate
of the stockers increased, the relative profitability of the
stocker strategy increased.
This static analysis indicated the profit-maximizing strategy for
a single year. However, the analysis did not consider the effect
of each strategy on farm profitability over multiple years, the
increased risk of mortalities and off-flavor, nor the logistics of
producing and stocking successive batches of stockers throughout
the season across the whole farm. Additional research is needed in
a dynamic framework to evaluate the effects of these additional
factors.
- The economic impact of the catfish industry on Chicot
County, Arkansas
Aloyce R. Kaliba and Carole Engle
This study analyzed the contribution of the catfish industry to
the economy Chicot County, Arkansas, using an input-output model.
The objective was to quantify the economic contribution of the
industry in terms of creating new dollars, jobs, and income to the
local community. Mail surveys and personal interviews were used to
collect data from catfish farmers, processors and other businesses
within the industry. For farmers, the information solicited
included production and marketing costs, sales and employment. Out
of approximately 85 catfish farms, 44 usable questionnaires were
obtained for a response rate of 52%. Businesses directly related
to the catfish industry provided information on employment and
sales and included: processors, seiners and haulers, pond
builders, tractor and equipment dealers, and feed bin
manufacturers. Other businesses with indirect ties to the catfish
industry included: input supply companies, banks, fertilizer and
chemical companies, auto shops, electricians, and bookkeeping
firms. The survey data were used to modify the IMPLAN database for
Chicot County to reflect the 2001 level of catfish production,
processing and services available to support the industry and to
estimate the economic impact of the industry to the county's
economy. In 2001, the 85 catfish farmers in the county operated
about 7,859 ha(19,500 acres). The farm-gate value of catfish
production exceeded $63 million. Employment on catfish farms was
approximately 510. In addition, 34 other businesses depended on
the catfish industry. The impact analysis results indicated that
total employment created in Chicot County by businesses involved
directly or indirectly with the catfish industry was 2,534 jobs.
This represented 46% of all employment in Chicot County. Total tax
revenue (federal, state, and local taxes) generated from both
direct and indirect catfish businesses was $20 million. Combined,
the total economic impact of the catfish industry in Chicot
County, including direct, indirect and induced effects, was over
$359 million. If current economic difficulties would result in
contractions of 10-30% of the catfish acreage in Chicot County,
unemployment rates would increase from 10.2% to 12.2-16.5%. This
study demonstrates the importance of the catfish industry to the
economy of Chicot County.
- Implications of import and price setting policies for the
catfish industry
Kwamena K. Quagrainie and Carole R. Engle
Total imported fish fillets from Vietnam has increased by about
7000% since 1995 causing themarket share of U.S. catfish fillets
to decline from about 99% in 1995 to about 85% by December of
2001. Consequently, the price of catfish that processors pay to
farmers has declined to a ten-year low, threatening the
sustainability of the industry. Price setting is a policy being
considered by major producer groups such as the Mississippi
Catfish Producers Marketing Association (MCPMA) and the Catfish
Bargaining Association (CBA) to help enhance revenue and sustain
the industry. Fixity of assets in the catfish industry suggest a
relatively inelastic supply response from farmers therefore,
revenue enhancement can be better achieved through price increases
than quantity increases.
This study investigates Vietnamese export of fish fillets to the
United States and its impact on domestic catfish prices as well as
the welfare implications for opting price-setting policies by
producer groups. Structural equations and simulation models are
used to accomplish these objectives.
The results indicate that the desired price by both processors and
farmers and the actual transacted price matched fairly closely
until the last quarter of 2001. The desired price is what the
price should have been given market conditions. This equilibrium
desired price is found to have been affected negatively by excess
supply, including the quantity of catfish processed, the quantity
of catfish fillets sold, and the quantity of fish fillets imported
from Vietnam. Estimates of lost farm revenue due to the
non-realization of this desired price are $18, $11, and $88
million respectively in 1999, 2000, and 2001.
Using a base scenario of P1 = $0.55/lb and Q1 = 43.59 million
pounds, simulation results indicate that at a producer price of
0.60, 0.65, 0.70, and 0.75 cents/lb, processors will demand 42.28,
40.97, 39.66, and 38.35 million pounds respectively. The
government can purchase any excess supply above these quantities
to maintain the set price. These quantity levels suggest a welfare
loss to processors that increase with a price increase and a
welfare gain by farmers. However, the net societal gain, though
positive, declines with high prices.
- An economic Analysis of Effluent Treatments in Hybrid
Striped Bass Aquaculture
Yong-Suhk Wui and Carole Engle
The growth of aquaculture farming has resulted in increased
scrutiny by regulatory agencies. The Environmental Protection
Agency added aquaculture into the Effluent Limitation Guidelines (ELG)
program in December 1999. The final rule is scheduled to be
implemented in 2004. The ELG program bases its rulemaking effect
on technology-based standards that are economically achievable.
While there have been a number of studies on effluent treatment in
aquaculture, few studies have focused on the economic feasibility
of the effluent treatments that have been evaluated and that might
be adopted by farmers (Kouka and Engle).
The primary objective of this paper is to evaluate several
effluent treatments that have been considered for Hybrid Striped
Bass (HSB) farming. Farm-level impacts of proposed regulations
were analyzed in terms of farm sizes and regions.
The scope of the paper is limited to pond production systems for
grow-out of HSB foodfish. A Mixed Integer Programming (MIP)
analytical model for HSB farming was developed focusing on
maximizing profit derived from HSB production subject to the
imposition of several different effluent treatment options. Survey
data were collected from HSB farmers across the United States.
Experimental data for effluent treatment were obtained from the
literature and from on-going projects. The primary treatment
options considered in this paper include no treatment,
newly-constructed settling basins with Hydraulic Residence Time (HRT)
of 1 and 20 days, existing ponds converted to settling basins with
HRT of 1 and 20 days, constructed wetlands, fixed film filtering
by honeycomb and brush filter media, not flushing pond water, not
draining pond water, and circulating pond water. Settling basins
and constructed wetlands entail high costs for farmers with high
reduction in effluents. Filtering treatments incur high cost
without much reduction in nutrient concentration in effluents. Not
flushing water from the pond or not draining the pond annually
reduces effluent volume. Reduction in the amount of water flushed
or drained from the pond also decreases operating costs without
any additional investment cost associated with adoption of the
treatments. Effluent treatment options would increase production
costs in average by $0.00-6.79/kg.
The main result of the MIP model is that no annual draining and
not flushing the pond water are the best operational treatment.
When a cost (tax) or effluent level standard regulations are
imposed on effluent discharge, the model selected the no draining
treatment. By not draining ponds, farms would minimize treatment
cost by reducing effluent volume. However, additional work is
needed on the long-term risks associated with not flushing or not
draining HSB product ponds.
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