Why is it so hard to farm fish?

My old stomping grounds near Bainbridge Island, WA

My recent blog post regarding seriola farming, led to a request to comment on the challenges of farming non-traditional species, particularly on a smaller scale. As I’ve worked most of my career in the salmon industry, I may not bear as many scars of some of my colleagues but, I assure you, I too have suffered. If you are new to this blog, my objective is to relate my views and beliefs to a non-fish farming audience. If you are a fish farmer and are reading this, you may find some of this triggers PTSD for you. I apologize in advance.

Basic biology

For most fish, biological imperatives are profoundly different from mammals and, I think, most terrestrial animals. A few key elements to consider:

Species survival strategies – most domesticated farming species have evolved to create offspring with a high likelihood of survival – a cow can have 1 calf per year for roughly 10 years, so from a species survival perspective, the survival rate of calves needs to be high. Fish on the other hand, have a different approach – an Atlantic salmon can produce 5,000 to 10,000 eggs per breeding cycle (typically they only have one) with the hope that ~3% survive to spawn the next generation. A seriola species (Amberjack, yellowtail etc) will produce millions of eggs per spawning event with the hopes that a much smaller percentage will survive to perpetuate the species. Nature doesn’t care if an individual fish survives, it wants to throw millions of individuals at the problem of survival in hopes that a few survive. For farmers, this means your fish are very easy to kill.

Domestication and breeding – with a few exceptions, fish do not form bonds with their farmers, and every interaction is stressful and presents an opportunity for mortality and injury. Breeding programs and hatchery techniques are much more challenging when dealing with a species that places no importance on individual survival. In cattle, temperament can be used as key breeding characteristic – if you want your herd to be calmer and easier to manage, you can introduce cows selected for these characteristics. Selecting for temperament and acceptance of domestication doesn't really exist with fish. With salmon, domestication has improved over generations but only slowly. (Side note – advances in AI and camera technologies should improve our ability to select for behavioral traits but it will take years for this to manifest in stock enhancements)

Veterinary care – effective veterinary care is a challenge even in the most well-supported regions of the salmon world – see this article for reference – and may not exist in any meaningful way for novel species. I’ve been working with a biotech company on a sea lice product for the past year have been struck by how small (relatively) the salmon market is to terrestrial agriculture, how little research and development is being done to produce new vaccines and medications, and how desperate the situation is for farmers growing something other than salmonids. Setting aside the tools available to farmers, finding a veterinarian who really knows the animal you are dealing with is a pipe dream. Human doctors focus on one species, veterinarians are expected to learn about hundreds of species and in most veterinary programs, fish are an afterthought.

Nutritional requirements – fish are almost all carnivorous and many are cannibals as a bonus. (Another side note – when I farmed black cod in Puget Sound, we always wondered why our inventory counts were short. One day while processing some fish, I felt something sharp in the gut of a fish. Upon inspection, it was the spinal column of a pen-mate that was easily as big as the fish that had consumed it) Unlike primary terrestrial species, cows (herbivorous), chickens (omnivorous), pigs (will eat absolutely anything to an alarming degree), fish are fussy in their dietary needs. Fish diets, even for relatively low-value species like catfish, carps and tilapia, are expensive and require advanced formulations and production processes. In the culture of more novel species, knowledge of digestibility and nutritional requirements may not exist.

Feeding – for most terrestrial agriculture species, farmers have good control of what their animals are eating, how much and how efficiently they are converting feed into living tissue. With fish, a lot of this is guess work supported by trailing indicators – harvest results tell you how well you did but may not provide useful information on current performance, weight samples are stressful for the fish and generally involve a small sample size that may not be statistically valid. In many cases, you are feeding fish you can’t see – glare on the water, turbidity, depth – cameras help and, in the case of salmon, have been fundamental in achieving incredible results but are expensive and may not be an option for small-scale farmers or all water quality conditions. As above, AI will improve our ability to track feeding across millions of animals. Here is an example of a company that is using sound as a basis for feed control – in a turbid environment, the system listens for the sound of feeding to control feed levels and stopping points.

Operational constraints

Cash – a constraint in farming any animal but with fish, feed can be more expensive and time to market significantly longer. It becomes more manageable once you have established a stable production platform but in the early stages, you will be putting money into a living inventory, vessels, people etc. with a high degree of uncertainty around the eventual outcome of that operation. Bank financing for operating lines is expensive if you can find a bank that is willing to work with you.

Insurance – many regions have crop insurance or disaster relief programs for terrestrial farmers. They certainly don’t eliminate all risk but can help farmers survive desperate times. To the best of my knowledge, these programs don’t exist for fish farmers and many regions cling to the notion that aquaculture is somehow not farming. In salmon farming, typical biomass insurance plans are expensive and come with so many exclusions (plankton, viruses etc.) that their utility should be questioned. A small aquaculture operation is likely operating without any kind of safety net.

Investment – in my consulting life over the past couple of years, I’ve had the opportunity to help with seeking investment capital. For farming operations and even farming adjacent (technology, services) operations, it is incredibly difficult to match with investors. If your project is pre-revenue, is the first of its kind, the investment level is too big or too small, is in the wrong region, involves selling to new or unfamiliar markets, doesn’t produce sufficient margins, is perceived as high risk etc. it will be thrown on the trash heap with the dozens of other proposals investors see every day. (I think this was one of the reasons fish farmers turned to the Oslo stock exchange, they continually hit a brick wall in securing investments through traditional channels and the stock market became a better option. It hasn’t always gone so well but the stock market is generally more willing to embrace risk.)

Markets

I don’t want to imply that terrestrial farmers have it easy – they don’t, farming can be a brutal, low-margin business with any species, but they are at least selling into established channels where buyers know the product and how to prepare. Salmon and trout are in a pretty good position in this regard, but it took decades to get there. For less developed fish species – yellowtail, cobia, barramundi, amberjack etc. channels of distribution are far narrower, and the population of people understand the product and know how to prepare it, are far scarcer.

Back to my black cod experience. Black cod is a tremendous fish, rich-flavoured, oily like a salmon, and absolutely exquisite when prepared. The market for wild black cod is frozen – it is a bottom feeder and may have worms which would not likely be an issue with farmed fish, buyers expect fish in the 5 – 7kg range, and are generally limited to high-end sushi and fine-dining establishments. For farmers, freezing is a poor option as it can take much longer to get your money back and involves additional cost, a 5-7kg fish would likely take 10 years to grow (assuming you can keep them from eating each other) and very few people are in the habit of buying it from a grocery store and preparing it at home.

In my previous article on seriola species, I noted that most of the companies, I am familiar with, have struggled to market fish with outstanding culinary properties at sustainable prices, even at small volumes.

So why do it?

I think fish farmers love suffering and are passionate about the animals they raise. I remember someone commenting that fishing is about the only occupation where people pay to do it. Aquaculture can be like that sometimes – being out on the water, handling a beautiful creature, and doing it with people who share your bizarre fixation, can quickly erase any misgivings or doubts you might have about your choices in life.

Fish is an incredibly healthy protein, wild capture levels are at best, stable, and the world needs more of it. From a carbon footprint perspective, aquaculture has a lot to offer. Traditional agriculture methods will struggle to produce enough to feed a growing planet and in many respects are having an unacceptable environmental impact.

There is an old industry joke about aquaculture – Q. how do you make a small fortune in aquaculture? A. You start with a large one. Like juvenile fish, the path of aquaculture entrepreneurship is littered with the bones of the fallen – especially in regions where societies have not recognized the food security implications of diminishing wild capture. Where it has truly thrived is in regions where food security is a government priority – China, or coastal economic development is of profound importance – Norway, The Faroe Islands, Chile. Where it has failed or stagnated, neither of these are priorities – looking at you, Canada.

From an investment perspective, a major emphasis must be placed on enabling policies and regulatory structures to support and facilitate growth.

Thanks

I need to work on how to end my blog posts. For the brave and few who are still reading, I salute you. Comments and feedback are welcomed by email at Info@alanwcook.com or via LinkedIn.