Assessing the economic impact of key operational factors on grow-out farms producing European sea bass under different scenarios of production

Figures & data

Figure 1. Model framework to simulate the economic performance of sea bass production.

Table 1. Annual operating costs of a grow-out farm.^a

Operating costs	Formula	Definitions
Variable costs
Fingerling cost	$p_j\times N$	pj = Fingerling unit cost (€/unit) N = Annual quantity of cultured fish (# units/year)
Feed cost	$p_f\times W=p_f\times \left[N\times \left(\frac{1\hspace{0.17em}+\hspace{0.17em}\frac{s}{100}}{2}\right)\times \left(\frac{w_1-\hspace{0.17em}{w}_0}{1000}\right)\times r\right]$	pf = Feed unit cost (€/kg) W = Annual feed weight (kg/year) N = Annual quantity of cultured fish (# units/year) s = Fish survival rate (%) w1 = Fish final weight (g/unit) w0 = Fish initial weight (g/unit) r = Feed conversion ratio (FCR)^b
Fixed costs
Labor cost	$l\times e\times c$	l = Annual labor cost per employee (€/employee × year) e = Employees per cage (# employees/cage) c = Total cages in the facility (# cages)
Energy cost	$n\times c$	n = Annual energy cost per cage (€/cage × year) c = Total cages in the facility (# cages)
Veterinarian and medicine cost	$v\times c$	v = Annual veterinarian-medicine cost per cage (€/cage × year) c = Total cages in the facility (# cages)
Other operating cost	$m\times c$	m = Annual other operating cost per cage (€/cage × year) c = Total cages in the facility (# cages)
Depreciation cost	$a\times i\times c$	a = Annual depreciation rate (%) i = Annual capital investment per cage (€/cage × year) c = Total cages in the facility (# cages)

^aModel parameters are in lowercase letters and model variables are in uppercase letters.

^bThe FCR measures the efficiency of conversion of feed to fish (FAO, 2010).

Table 2. Parameter values depending on the farm size.

Concept	Unit	Micro farm	Small farm	Medium-large farm
Farm annual production	tons/year	180	540	2,250
No. of cages	# cages	12	18	40
Cage size (volume capacity)	m^3/cage	1,000	2,000	3,750
Biomass density	kg/m^3	15	15	15
Annual wage per employee	€/employee × year	16,440	16,440	16,440
No. of employees per cage	# employees/cage	0.8	0.8	0.8
Annual energy cost per cage	€/cage × year	3,124	3,124	3,124
Annual veterinarian cost per cage^a	€/cage × year	650	650	650
Annual other operating costs per cage	€/cage × year	3,411	3,411	3,411
Annual depreciation rate	%	10	10	10
Annual capital investment per cage	€/cage × year	151,265	151,265	151,265

^aAssuming that there is not any important disease outbreak along the culturing period.

Table 3. Parameter values depending on the production strategy.

Concept	Unit	Strategy 1	Strategy 2	Strategy 3^a
Cultured species	name	European sea bass	European sea bass	European sea bass
Fish harvested weight	grams/unit	450	1,000	2,000
Unit sales price^b	€/kg	5.80	8.72	11.46
Culturing period	months	23	36	60
Fingerling initial weight	grams/unit	11	11	11
Survival rate^c	%	90	85	80
Absolute growth rate (AGR)	grams/month	18	27	33
Fingerling unit cost	€/unit	0.31	0.31	0.31
Feed unit cost	€/kg	1.05	1.05	1.05
Feed conversion ratio (FCR)	ratio	2.4	2.4	2.4

^aIn this strategy the half of production will be fished and sold when fish achieves a weight of one kilogram.

^bThe unit sales price of sea bass was calculated taking the Spanish retail prices and discounting the added value over the ex-farm price (EUMOFA, 2019).

^cWe assume that there is not abnormal fish mortality (disease outbreaks) and escapes in the year.

Figure 2. Economic performance of a typical grow-out farm under different scenarios of production (baseline values).

Table 4. Operating risk of a typical grow-out farm under different scenarios of production (baseline values).

Variable	Unit	Micro farm (180 tons/year)			Small farm (540 tons/year)			Medium-Large farm (2,250 tons/year)
		Strategy 1 (450-g fish)	Strategy 2 (1-kg fish)	Strategy 3^a (2-kg fish)	Strategy 1 (450-g fish)	Strategy 2 (1-kg fish)	Strategy 3^a (2-kg fish)	Strategy 1 (450-g fish)	Strategy 2 (1-kg fish)	Strategy 3^a (2-kg fish)
Annual production	kg/year	162,000	153,000	144,000	486,000	459,000	432,000	2,025,000	1,912,500	1,800,000
Break-even point	kg/year	174,440	75,413	46,481	261,660	113,119	69,722	581,467	251,376	154,937
MOS ratio	%	−7.7	50.7	67.7	46.2	75.4	83.9	71.3	86.9	91.4

^aIn this strategy the half of production will be fished and sold when fish achieves a weight of one kilogram.

Table 5. Variation in the net operating profit caused by a change of ±10% in some key operational parameters.

Model parameters	Parameter change	Micro farm (180 tons/year)			Small farm (540 tons/year)			Medium-Large farm (2,250 tons/year)
		Strategy 1 (450-g fish)	Strategy 2 (1-kg fish)	Strategy 3^a (2-kg fish)	Strategy 1 (450-g fish)	Strategy 2 (1-kg fish)	Strategy 3^a (2-kg fish)	Strategy 1 (450-g fish)	Strategy 2 (1-kg fish)	Strategy 3^a (2-kg fish)
Unit sales price (p)	−10%	−93,960	−133,416	−145,296	−281,880	−400,248	−435,888	−1,174,500	−1,667,700	−1,816,200
Survival rate (s)	−10%	−74,047	−114,350	−131,507	−222,141	−343,050	−394,522	−925,587	−1,429,376	−1,643,843
Growth rate (g)	−10%	−77,356	−86,340	−111,832	−232,068	−259,019	−335,496	−966,952	−1,079,244	−1,397,902
Fingerling unit cost (pj)	+10%	−12,400	−5,580	−2,790	−37,200	−16,740	−8,370	−155,000	−69,750	−34,875
Feed unit cost (pf)	+10%	−42,039	−41,496	−30,674	−126,116	−124,489	−92,022	−525,483	−518,706	−383,423
Feed conversion ratio (r)	+10%	−42,039	−41,496	−30,674	−126,116	−124,489	−92,022	−525,483	−518,706	−383,423

^aIn this strategy the half of production will be fished and sold when fish achieves a weight of one kilogram.

Table 6. Parameters values to achieve a null net operating profit (break-even values).

Model parameters	Unit	Micro farm (180 tons/year)			Small farm (540 tons/year)			Medium-Large farm (2,250 tons/year)
		Strategy 1 (450-g fish)	Strategy 2 (1-kg fish)	Strategy 3^a (2-kg fish)	Strategy 1 (450-g fish)	Strategy 2 (1-kg fish)	Strategy 3^a (2-kg fish)	Strategy 1 (450-g fish)	Strategy 2 (1-kg fish)	Strategy 3^a (2-kg fish)
Unit sales price (p)	€/kg	5.99	5.86	5.99	4.67	4.46	4.32	4.06	3.82	3.53
Survival rate (s)	%	93.69	52.45	37.84	67.86	36.64	24.88	55.80	29.24	18.88
Growth rate (g)	g/month	18.67	16.39	12.57	13.36	9.64	6.27	9.90	5.72	3.33
Fingerling unit cost (pj)	€/unit	0.23	2.74	8.01	0.77	3.92	10.37	1.01	4.48	11.47
Feed unit cost (pf)	€/kg	0.97	2.16	3.42	1.51	2.70	4.15	1.75	2.95	4.49
Feed conversion ratio (r)	ratio	2.23	4.93	7.82	3.44	6.16	9.48	4.01	6.74	10.26

^aIn this strategy the half of production will be fished and sold when fish achieves a weight of one kilogram.

Table 7. Parameters values to compensate a 10% of decrease in the unit sales price (p).

Model parameters	Unit	Micro farm (180 tons/year)			Small farm (540 tons/year)			Medium-Large farm (2,250 tons/year)
		Strategy 1 (450-g fish)	Strategy 2 (1-kg fish)	Strategy 3^a (2-kg fish)	Strategy 1 (450-g fish)	Strategy 2 (1-kg fish)	Strategy 3^a (2-kg fish)	Strategy 1 (450-g fish)	Strategy 2 (1-kg fish)	Strategy 3^a (2-kg fish)
Survival rate (s)	%	103.08	96.23	90.13	103.08	96.23	90.13	103.08	96.23	90.13
Growth rate (g)	g/month	20.19	30.02	38.02	20.19	30.02	38.02	20.19	30.02	38.02
Fingerling unit cost (pj)	€/unit	0.08	−0.43	−1.34	0.08	−0.43	−1.34	0.08	−0.43	−1.34
Feed unit cost (pf)	€/kg	0.82	0.71	0.54	0.82	0.71	0.54	0.82	0.71	0.54
Feed conversion ratio (r)	ratio	1.86	1.63	1.24	1.86	1.63	1.24	1.86	1.63	1.24

^aIn this strategy the half of production will be fished and sold when fish achieves a weight of one kilogram.

FAO. (2010). Report of the FAO workshop on the on-farm feeding and feed management in aquaculture [FAO Fisheries and Aquaculture Report No. 949]. Food and Agriculture Organization of the United Nations.

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EUMOFA. (2019). Seabass in the EU. Case study. European Market Observatory for Fisheries and Aquaculture Products.

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