Annual Costs and Returns of
Bighead Carp Stocked in Fertilized Earthen Ponds
Carole R. Engle, Ph.D.
Professor and Chairperson, Department of Aquaculture and Fisheries
Bighead carp (BHC) have been raised in the United States for two decades and sold through the livehaul market as a live product. A filter-feeding fish, BHC grow rapidly on zooplankton and other live organisms that grow in earthen ponds. The ponds require only fertilizer to produce plankton for food for BHC. The estimates of annual costs and returns to produce BHC in fertilized earthen ponds presented here are based on research studies conducted at the UAPB Aquaculture Research Station. It will be easier to find livehaulers willing to purchase a load of BHC if there also are grass carp to sell. Livehaulers view grass carp as more profitable. Grass carp are generally stocked at 10-30/acre and can be raised in ponds with BHC.
A 15-acre commercial-scale fish pond is assumed. BHC are stocked at a rate of 128/ac in earthen ponds and fertilized monthly with 12-49-6 inorganic powdered water-soluble fertilizer at 7.9 lb/ac and with cottonseed meal at 100 lb/ac. BHC were found to reach an average weight of 5.6 lb with a survival of 96%, to produce a total yield of 688 lb/ac. Minimum market size of bighead varies and can be as low as 4 lb or as high as 6 lb depending on the overall supply situation. At an average price of $0.40/lb, total annual gross revenue is $4,128, Table 1. Variable cost included stockers, inorganic fertilizer and cottonseed meal, the cost to pump the pond full of water, harvesting costs and interest on operating capital for total variable costs of $3,227 for a typical 15-ac pond. Returns above variable cost (gross revenue minus total variable cost) were $901, or $60/acre. Fixed costs included depreciation of the pond, interest on the pond investment, taxes, and insurance, for a total of $2,813 for the 15-ac pond. Net returns (gross revenue minus total cost) were -$1,912, or $-127/acre.
The negative net returns indicate that it is not profitable to construct ponds solely for the purpose of raising bighead carp. Fixed costs of ponds are high and more intensive production practices are required in order to produce the high yields necessary to spread fixed costs over a large amount of output. However, since returns above variable costs were positive, it is worthwhile to raise bighead in monoculture in ponds in the short run if there is no alternative use for the pond or if there is no ownership cost associated with the pond. For example, if a farmer owned ponds but had difficulty acquiring sufficient operating capital to manage them in intensive catfish production, several ponds could be stocked in monoculture of bighead for several years. This would maintain water in ponds, prevent damage to levees and positive revenue could be generated from the ponds until the farmer was financially able to operate them in intensive production. Similarly, irrigation reservoirs or other farm ponds, as long as they can be seined, could be used to generate supplemental income from bighead carp monoculture production.
Breakeven price above variable cost was $0.31/lb, or less than half the average price of BHC. This indicates that, in the short run, revenue will more than cover variable costs even during periods when prices reach their lowest levels. Breakeven price above total cost was $0.58/lb. Prices of BHC in the livehaul market in recent years have reached these levels and monoculture production is profitable if the farmer can sell BHC during times of higher prices. However, since BHC prices average $0.40/lb, there is price risk associated with the long-term profitability of BHC monoculture.
Breakeven yield to cover variable cost was 538 lb/ac. In terms of covering variable costs, there is little apparent risk associated with BHC monoculture production. However, at average BHC prices, yields would have to exceed 1,007 lb/ac to cover total costs. Research indicates that it is unlikely that BHC can be produced at these levels at the accepted minimum market size. However BHC production in polyculture in catfish, managed under intensive commercial practices, was profitable at several stocking densities. See Fact Sheet FSA 9078 for estimates of costs and returns of raising BHC and catfish together in earthen ponds.
Table 1. Annual cost and returns of bighead carp stocked at 128/ac in a fertilized 15-acre ponda.
Item |
Description |
Unit |
Quantity |
Price/unit ($) |
Total cost ($) |
| Gross Returns-BHC, 5.6 lb (688 lb/ac) | lb |
10,320 |
0.40 |
$4,128 |
|
| Variable costs | |||||
| Stockers | 0.80 lb each |
lb |
1536 |
0.40 |
614 |
| Inorganic fertilizer | 12-49-6, powder |
32-lb bag |
20 |
32.00 |
640 |
| Cottonseed meal | 50-lb bag |
80 |
4.35 |
348 |
|
| Well operation | pumping cost |
ac-ft |
45 |
20 |
900 |
| Harvesting | 1 seining event |
seine pull |
1 |
500 |
500 |
| Interest on op. capital | 10%, 9 months |
dollars |
2,252 |
0.10 |
225 |
| Total variable costs | total |
dollars |
3,227 |
||
| Returns above variable costs | 901 |
||||
| Fixed costsb | |||||
| Depreciation | 1,695 |
||||
| Interest on investment | 930 |
||||
| Taxes and insurance | dollars |
188 |
|||
| Total fixed costs | dollars |
2,813 |
|||
| Total cost | dollars |
6,040 |
|||
| Net returns | $/15-ac pond |
-1,912 |
|||
$/ac |
-127 |
||||
| Breakeven price above variable cost | $/lb |
0.31 |
|||
| Breakeven price above total cost | $/lb |
0.58 |
|||
| Breakeven yield above variable cost | lb/ac |
538 |
|||
| Breakeven yield above total cost | lb/ac |
1,007 |
|||
a
Adapted from Engle, C.R. and D. Brown. Under review. Growth, yield, dressout, and net returns of bighead carp (Hypophthalmichthys nobilis) stocked at three densities in fertilized earthen ponds.b
Engle and Killian. 1997.Costs of producing catfish on commercial farms in levee ponds in Arkansas. ETB 252. Cooperative Extension Program, University of Arkansas at Pine Bluff.
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Dr. Carole R. Engle is Professor and Chairperson, Department of Aquaculture and Fisheries, University of Arkansas at Pine Bluff. FSA9079-3M-9-98N Issued in furtherance of Extension work, Act of September 29, 1977, in cooperation with the U.S. Department of Agriculture, Dr. Jacquelyn W. McCray, Dean/Director of 1890 Research and Extension, Cooperative Extension Program, University of Arkansas at Pine Bluff. The Arkansas Cooperative Extension Program offers its programs to all eligible persons regardless of race, color, national origin, sex, or disability, and is an Equal Opportunity Employer.