The Economic Feasibility of Adoption of a New In-Pond Mechanical Grader for Food-Sized Channel Catfish, Ictalurus punctatus

Jeremy Trimpey and Carole Engle
Aquaculture/Fisheries Center, University of Arkansas at Pine Bluff
Mail Stop 4912, 1200 North University Drive, Pine Bluff AR, 71601

A new in-pond horizontal floating bar grader has been developed for food-sized channel catfish.  An economic analysis was developed from previously reported field trials to determine whether farmer adoption of this new grader is economically feasible.  Analyses conducted included a partial budget to assess short-term profitability, payback period, net present value, and internal rate of return to evaluate long-term profitability and Taguchi quality loss function analysis to quantify and compare economic losses due to deviation from the target fish size.  Partial budget results indicated positive net benefits for all farm sizes (65 ha, 130 ha, 259 ha, and 478 ha).  Net benefits increase with farm size, market price, and increased dockage penalties.  Payback periods ranged from 0.1 to 2.0 years depending on the scenario.  The net present values were all positive and increased with increasing farm size.  All internal rates of return were higher than the current opportunity cost of capital and increased with increasing farm size.  The UAPB/Heikes grader saved from $770 to $5,575, depending on farm size, by reducing the variation in individual fish size of loads of fish sent to processing plants, as determined by the Taguchi quality loss function.  These results indicate that producer adoption of the UAPB/Heikes grader is economically feasible for the scenarios analyzed.