Developing production and financial benchmarks for marine aquaculture from farm data

Abstract

Benchmarking programs for crop and livestock farms have been used by farmers to identify ways to improve farm efficiencies. This study developed a set of benchmarks for oyster, mussel, and seaweed farming in Maine (USA). Farm-level survey data were used to calculate benchmarking metrics for each farm respondent. Results showed the importance of disaggregating benchmarking metrics by production scale, gear type, and whether farms were initial startup (defined in this study as <5 years in business) or established (>5 years in business) farms. The initial analysis of cost structures on individual farms provided useful information from which to identify key categories for disaggregation. Identification of the most important cost inputs further points to which benchmarks will be of greatest value for different groups of farms. Results for oyster farms showed that startup costs per oyster harvested were lowest ($0.20/oyster) on established bottom culture farms as compared to $0.96/oyster for established suspended oyster farms, and highest ($1.75/oyster) on startup oyster farms. Profits (Net Farm Income) per oyster were greatest on established bottom oyster farms followed by established suspended oyster farms, but were negative on average, for startup farms. Per-hectare, however, profits were greater on established suspended than bottom culture oyster farms. Labor efficiencies were also greatest for established suspended oyster farms (65 oysters/hour of labor), followed by established bottom culture oyster farms (55 oysters/hour of labor), with the lowest labor efficiency (44 oysters/hour of labor) for startup oyster farms. Given the inherent variability among aquaculture farms, adequate numbers of observations of participating farmers are necessary within each production scale/gear type and startup/established categories for benchmarks to be of value. For emerging sectors of aquaculture, benchmarking metrics can be useful for navigating the critical startup period, but obtaining sufficient numbers of observations is a challenge. Benchmarking metrics for established farm businesses provide guidance on the levels of production and economic performance necessary to be successful. Overall, benchmark values are most useful when applied in a holistic fashion that takes into consideration the performance of the farm across all production, revenue, expense, and efficiency categories (labor, capital, and financial).

Keywords:

• Aquaculture finance
• benchmarks
• Maine aquaculture
• marine aquaculture
• production benchmarks

Acknowledgments

We thank the producers who spent the time to participate and contribute farm information for this study and the members of the Financial Advisory Committee for this project.

Notes

1 Lease/permit fee costs reported by respondents do not include costs that growers incur during the application period that can be substantial depending on the degree of opposition/controversy related to a specific lease application.

2 There were too few observations to compare the effect of production scale on productivity by gear type.

3 Few respondents reported management costs, but for those that did, some portion of the manager’s time was for labor and not strictly management decision-making. Thus, most of the cost of “labor and management” is that of labor.

Additional information

Funding

This study was funded by the FocusMaine in partnership with the Maine Aquaculture Association.