Cost and Returns for Baitfish Production in Arkansas

Carole R. Engle
Coordinator of Fisheries, 1890 Research and Extension

Larry W. Dorman
Extension Aquaculture Specialist

Gayle Pounds
Research Specialist

This Fact Sheet presents budgets for baitfish production for three farm sizes (160, 320 and 640 water acres) with 20-acre ponds.  Although farm size is expressed in water surface area, these budgets include cost of the total land area (180, 350, and 700 land acres).

Shed.  A partially-enclosed shed with a galvanized sheet metal roof and concrete floor for holding and grading fish, office space and feed storage.  The shed has dimensions of 50 feet x 50 feet for the 160-acre farm and 50 feet x 100 feet for the 320-acre farm; two 50-feet x 100-feet sheds are required for the 640-acre farm.  There were five concrete holding vats (30 feet x 6 feet) per 160 acres of ponds and one 4-inch pump per building.

Pond Construction.  Cubic yards of earth moved, cubic yards of gravel and acres of grass cover were estimated based on Soil Conservation Service recommendations.  Sixteen-feet levees with 4:1 outside slopes and 3:1 inside slopes (on perimeter of pond layout) required approximately 28 cubic yards of earth per linear foot; 12-feet levees with both slopes 3:1 (non-traffic levees) required approximately 22.75 cubic yards of earth per linear foot.  Twenty percent was added to the amount of earth moved to allow for settling and compaction.  Total pond construction cost ranged from $532,377 for the smallest farm to $2,092,939 for the largest farm.

Earth moving is the largest component of pond construction cost.   Depending on the farm scenario, it ranged from $484,919 to $1,904,195 or 91 percent of pond construction cost (Table 1).

Pond Water Supply.  The primary supply for all farms was groundwater wells.  The farms require two, four and eight wells for the 160, 320 and 640 acre farms, respectively.  The main water supply pipe from the wells was 15-in low pressure plastic pipe.  Drains consisted of standpipes of 12-in low pressure plastic pipe.  Drains consisted of standpipes of 12-in low pressure plastic pipe with screens and rotating elbows.

Equipment Costs.  Table 2 lists the required equipment with cost for each size farm.  The size of flatbed truck used depends on the size of hauling tank.  Three-compartment tanks are carried on a 1-ton truck, but 6-compartment tanks require a 2-ton truck.  The air blower system for the smaller grading shed on the 160-acre farm has a lower capacity than blowers for the sheds on 320 and 640 acre farms because it services fewer holding tanks.

Emergency generators were sized to meet minimum energy requirements for each farm size.  A 400 feet and a 50 feet seine are required for harvesting the baited corner of a pond.  Total equipment cost was $60,261 for the 160 acre farm, $82,962 for the 320 acre farm and $157,832 for the 640 acre farm.

Total investment per water acre ranged from $4,619 to $4,856 (Table 1).  Pond construction cost accounted for approximately 70 percent of total investment cost.

Annual Cost and Returns.  Budgets were based on the following assumed average values: baitfish price ($2.75/lb), feed price ($350/ton) and yield (400 lb/ac) (Table 3).  Grow out ponds were stocked with 50 egg-covered mats/acre in the spring for harvest in the fall (200-day growing season).  Although yields vary from farm to farm, 400 lb/acre is generally considered by farmers to be an average expected yield.

Variable Cost.  Variable or operating cost (VC) includes those expenses that are directly related to quantity or production.

A 32 percent protein floating feed was fed at a maximum of 5 lb/ac/day throughout the 200-day growing season.  Fertilizer (18-46-0) was applied at 100 lb/acre once a year to stimulate plakton production as both a food source for minnows and for oxygen production.  Copper sulfate was applied twice each year at 1 ppm (part per million).  Hydrated lime was applied at 100 lb/acre once a year to disinfect the pond bottom and to increase alkalinity.

Pumping cost was based on filling the pond completely once a year to an average depth of 4 feet and replacing 1 foot of water/year for a total of 5 feet/year.  An annual levee repair charge equal to 1/40th the original earthmoving cost was charged along with $1.00/mat cost for matted eggs.

On the 160 acre farm, two part-time seasonal workers (half-time for 4 months) are required in addition to operator's labor.  On a 320 acre farm, the owner/operator will need additional assistance of one other full-time worker while the 640 acre farm will require two full-time persons in addition to part-time labor.

Interest on operating capital was estimated for the 200-day growing season using an 11 percent annual interest rate.  Even if a producer does not borrow funds from a commercial bank, this charge represents an opportunity cost of income that could have earned by investing elsewhere.

Fixed Cost.  Expense occurs whether or not any baitfish are produced is called fixed cost (FC).  Generally, costs associated with land and permanent facilities are considered FC.

Depreciation represents the money that would have been earned each   year to replace equipment when it wears out.  Taxes and insurance are charged at $15/acre.  General overhead is the cost of the machinery and equipment used for general farm operation(moving, etc.).  Interest on buildings, ponds and water supply was charged at 9.9 percent of the values detailed in Table 1 while equipment was charged at 11 percent.

The 160, 320 and 640 acre farms with 20-acre ponds had FC of $62,979, $114,482 and $226,562, respectively.  The FC composed primarily of interest charges on pond construction and water supply(46-50 percent) (Table 3).

Total Annual Cost.  Total fixed cost was added to total variable cost to obtain total annual cost (TAC).  Total cost ranged from $157,507 (160 acre farm) to $596,022 (640 acre farm).  Interest charges on capital investment plus depreciation accounted for the greatest percentage of TAC and were followed by feed cost, depreciation, pumping cost and levee repair cost.

Revenue and Returns.  Total revenue (gross receipts) was estimated by multiplying  the price per pound of baitfish times the pounds of baitfish produced ($1,100/acre).  Net returns to operator's labor and management were positive.  The 160, 320 and 640 acre farms had profits of $153, 149 and 169/water acre, a price of $2.33 to $2.38/lb is required to break even.  At assumed baitfish prices, break-even yields averaged 343 lb/acre (Table 3).

Acknowledgement is given to D. Leroy Gray, retired Extension Aquaculture Specialist, University of Arkansas Cooperative Extension Service; H. Steven Killian, Extension Aquaculture Assistant Specialist, University of Arkansas Cooperative Extension Service; and Van Pennington, Extension Aquaculture Specialist, University of Arkansas Cooperative Extension Service, for help in preparing this publication.

Dr. Engle is coordinator of aquaculture/fisheries, 1890 Research and Extension, Dorman is Extension Aquaculture Specialist, and Pounds is research specialist, University of Arkansas at Pine Bluff.

FSA9062-6M-5-92-S364

Issued in furtherance of Extension work, Act of September 29, 1977, in cooperation with the U.S. Department of Agriculture, Dr. Mazo Price, Director, Cooperative Extension Program, University of Arkansas at Pine Bluff.  The Arkansas Cooperative Extension Service offers its programs to all eligible persons regardless of race, color, national origin, sex, or handicap, and is an Equal Opportunity Employer.