Production Economic Analysis of Black Sea Bass Juveniles to Support Finfish Mariculture Growout Industry Development in the Southeastern United States

Abstract

A pilot-scale finfish mariculture hatchery was established at the University of North Carolina Wilmington. In 2011, research-based hatchery protocols were scaled up to produce 37,000 advanced (1–5 g) black sea bass fingerlings. Based on engineering, biological, and cost data from operating the pilot hatchery, an economic analysis of a hypothetical commercial scale black sea bass hatchery operation was conducted. The financial performance of two alternative facilities that produce 97,200 5-g and 388,800 1-g fingerlings per year over a 30-year project life showed cumulative net present value (NPV) of $445,000, and $3,168,000, modified internal rates of return (MIRR) of 6.52% and 10.52%, and per unit breakeven prices of $1.67 and $0.47, respectively. Sensitivity analyses showed that final stocking density was critical to financial performance. Fingerlings were supplied to startup growers in NC and in VA, and market-size fish from these growout facilities were distributed (live or whole on ice) to premium-value markets on the eastern seaboard. This pilot hatchery is enabling new farmers to access fingerlings, establish growout technology and understand market value and demand.

Keywords:

• black sea bass fingerlings
• marine finfish hatchery
• production economic analysis

ACKNOWLEDGMENTS

We thank Deborah De and Randall Johnson for helpful advice, Dr. Edward Graham of the UNCW Department of Economics and Finance for expert advice on real estate values and interest rates, and the UNCW Aquaculture Program faculty and staff, including Dr. Md. Shah Alam, Troy C. Rezek, Amanda R. Myers, and Jennifer Gabel and graduate students Walker Wright-Moore, Daniel Russo, and Tyler Gibson for technical assistance.