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First world fish farms start to migrate to countries with warmer economic climes.

First World Fish Farms Start to Migrate To Countries With Warmer Economic Climes

A lot of the fish farming industry has started moving from one country to another in search of warmer climates, lower priced land, more abundant water, less pollution problems and cheaper labor.

That was the word from Floyd F. Smiley, a veteran fish farm entrepreneur, to the International Seafood Conference in Luxembourg. Smiley, whose own catfish farm venture went belly-up, is now working on tilapia for Solar AquaFarms, a subsidiary of Chiquita Brands International.

"Elements of the tilapia industry in which I am presently involved are rapidly moving out of the U.S. and closer to the Equator, where the aquaculturist has far greater opportunity for on-going profitability for a whole host of reasons," Smiley told conference delegates.

Tilapia aren't alone. "As another example -- and this will sound like heresy to many -- I look to a gradual mitigration of at least part of the U.S. catfish industry to Latin America and Asia for the same basic reasons," he said. The growing season in the tropics is 12 months instead of nine, labor costs are only a fraction of those in Mississippi, water is more abundant, feed costs are competitive with those in the U.S., and freight cost to the U.S. for frozen catfish from South America is only 15 cents a pound.

"Those are just two of the dozens of species whose production is gradually migrating, or will migrate, to areas offering greater profit potential -- and the trend is not only going to continue, but it will probably accelerate during the next few years," Smiley said. "Among the hundreds of exciting developments are even more shrimp in China, sea bass in Greece, new turbot activity in Norway, the continued growth of salmon in Chile, halibut in Scotland and Arctic Charr in the State of Maine in the U.S."

Look for the big fish in the industry to swallow the small fish: "Another trend -- and one in which many of you are already participating -- is the acquisition of smaller aquaculture entities by major firms around the world. We are at a stage of our development in aquaculture where |cherry picking' has become the order of the day. Well-financed major firms worldwide are picking up the best small operations on an almost daily basis. The difficulty, of course, lies in separating the wheat from the chaff."

Key is Marketing

A lot of aquaculture operations have gone under, Smiley suggested, because they were run by biologists and engineers without any head for business. They should stick to raising the fish, and bring in business and marketing expertise at the outset. "Marketing is the name of the game, and the entire seafood industry -- wild catch or cultured -- has an enormous amount of catching up to do!" he declared. "I, for one, think the time has come to trade in a few biologists for a handful of intelligent, ambitious young product managers from companies like Procter & Gamble, Carnation, Pepsi and others."

Genetic engineers, on the other hand, should be able to make themselves useful. Just as the broiler chicken industry in the U.S. was revolutionized by genetic and cultural improvements, so is the aquaculture industry today. Fish and shellfish with faster grow-out times, higher feed conversion ratios, less fat content, etc., are the order of the day. "Substantial strides" have been made with shrimp, salmon and trout, and there is more to come," Smiley said.

"Much work is under way in the U.S. on reducing the size of the catfish head, and genetic improvements in tilapia have already significantly lowered the grow-out time," he explained. "Certainly aquaculture's future will belong to those species and those aquaculturists who succeed in doing with their animals what the broiler industry has done with its animals over the past 20 years."

It will also belong to those who develop value-added products, Smiley predicted. Product innovation is an imperative neglected by aquaculture operations that begin as Mom and Pop fish farms dedicated to "consistency" as the be-all and end-all of the business and come to grief when they try to compete head-to-head with wild stocks on consistency and price alone -- the Norwegian salmon industry and the U.S. catfish industry are obvious examples. A price war in the latter industry has reduced catfish fillet prices to an all-time low.

Whether or not Mom and Pop are consigned to the dustbin of history, the aquaculture industry is bound to increase in volume out of sheer necessity. Global catch of fish and seafood was 93 million tons in 1989, and the United Nations Food and Agriculture Organization (FAO) predicts the world will need 28 million more by the turn of the century (22.5 million for industrialized and 5.9 million for non-industrialized countries). Wild landings simply can't close the gap.

Aquaculture production increased from 6.6 million tons in 1975 to about 10 million in 1988, and is expected to reach 21 million in the year 2000. In 1986, the FAO predicted that aquaculture would supply 25% of the world's edible fish by 2000, but the percentage actually reached 20% in 1990 and will be double that in another 15 years. The globalization of aquaculture has led to a Darwinian struggle for the "survival of the fittest" production areas, which is what has led in turn to the migration of segments of the industry.

Yet another trend is aquaculture as a vehicle for movement of capital. One major U.S. tobacco company, for example, is investing in Third World fish farms as a means of repatriating capital from Third World cigarette sales -- people are smoking less in the U.S., so the butts are being peddled abroad. Smiley said he knew of at least five other major firms "whose primary interest in aquaculture is its export potential from underdeveloped and undeveloped nations."
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Publication:Quick Frozen Foods International
Date:Jan 1, 1992
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