The Economics of Salmon Aquaculture
- 11; Global production of seafood has more than doubled over three decades, from 65 million tonnes in 1970 to 142 million tonnes in 2008. Landings of wild fish increased from 63 million tonnes in 1970 to almost 90 million tonnes by the end of the 1980s, and have remained near that level ever since, although there are fluctuations from year to year(Asche & Bj?ndal, 2011). According to the Food and Agriculture Organisation (FAO, 2009), there is little reason to expect an increase in the production from wild stocks in the foreseeable future.
Salmon and shrimp are the leading species in modern industrialised aquaculture. Farmed salmonids (Atlantic / coho salmon and salmon trout) account for only about 4% of total aquaculture production but almost 13% of production value. Shrimp has a share of about 6% of production volume and accounts for more than 16% of production value. Therefore, the unit prices of salmon and that of shrimp are around three times of average unit price of aquaculture.
- 14; The control of supply allowed sellers to target the most valuable markets, market segments and product forms. In particular, most farmed salmon is sold fresh in contrast to most wild-caught salmon that is sold in highly conserved product forms. Fresh salmon is sufficiently valuable to justify airfreight from Europe to Japan and the USA. To airfreight large volumes of seafood is but one of many innovations in logistics and distribution that control of the production process has permitted. The total result is substantial for competitiveness, as a Norwegian salmon farmer gets about 50% of the retail value of a whole salmon, as compared with 10% for a cod fisherman.
In the 25-year period during which salmon farming has been commercially significant, the industry, as well as the markets, has changed substantially. In particular, the strong increase in production has been associated with a substantial reduction in prices. The real price in 2008 was less than one-third of the price in the early 1980s. Moreover, the price is likely to continue to decline in the longer term due to further productivity growth. The price reduction is to a large extent necessary if the industry is to continue expanding because the reduced price is the main factor in attracting new consumers of salmon.
- 18; There are six commercially important salmon species, which all occur in nature only in the northern hemisphere. Salmo salar is native to the Atlantic Ocean, the other five (all genus Oncorhynchus) to the Pacific. However, only two Pacific species, chinook and coho, are farmed. In addition, in northern Europe and Chile farmed salmon trout (also genus Oncorhynchus, Oncorhynchus mykiss) are produced at a size that makes them comparable to salmon, and are primarily sold in Japan in competition with Pacific salmon. This large trout is often known as salmon trout.
- 19; For salmon in Norway the survival rate in the hatcheries is now over 70%, which contrasts strongly with the survival rate in the wild of less than 0.5%.
- 20; Regardless of species, the fish must be harvested before spawning. Although Atlantic salmon do not necessarily die after spawning, the quality degradation due to spawning would mean waiting for up to another year before harvesting. This is not practical, as the additional cost would make production unprofitable. As the industry has developed, it has achieved better control over the timing of smoltification and sexual maturity, and can to a larger extent delay the processes, for example by using artificial light.
- 21; Smolts are obviously a key input in the production process. As salmon begin to mature, they adapt for life in salt water in an intermediary stage known as smolts. This process marks the beginning of their first migration from their home stream to the ocean. Fish like salmon, that move from fresh to salt water and back again over the course of their lives, must be able to change their physiology, the way their bodies work. Most salmon species spend some time in the estuary of a river, where the fresh water mixes with the salt water. Here, they gradually get used to life in salty water in preparation for the time they will spend at sea. Very few fish have the ability to adapt from living in fresh water to salt water, and then return back to fresh water. In a process called smoltification, salmon adapt to the changes salt water causes to their bodies. In fresh water, the salmon’s body is saltier than the water in which it swims. To work properly, the body needs salt so it tries to keep the salt in. Some escapes, but the salmon gets enough from the food it eats to make up for the loss. In the ocean, the water is saltier than the salmon’s body needs to be, so it must try to keep the salt out and the water in. When salmon swim in the ocean, the salt water draws water out of the fish’s cells. Salmon adapt by drinking sea water to replace the water their cells lose. They excrete the excess salt through their gills and urine. Freshwater fish would die in salt water because they cannot replace the water in their cells. As the smolts prepare for ocean life, their appearance also changes, from the dark colours of the fry to the silvery colour of adult salmon. This helps them hide in the light conditions of the surface waters of the open ocean, where there is no dark shade from overhanging trees. In estuaries, the mineral and organic elements of a river mix with ocean nutrients brought in by tides, creating a nutrient-rich environment that supports diverse plant and animal growth. Estuaries provide salmon with a good supply of insects and crustaceans, such as tiny shrimps for food. While in the estuary, smolts can grow from 4 or 5 cm in length to as much as 9 cm. However, estuaries are home to many fish predators, including larger fish, birds, snakes, seals and even orcas. People build cities and industries on estuaries, as well as dyking and dredging them, or extending landfills into them for development projects. The loss of estuary habitat means that there is less room for salmon and other estuary animals to mature, feed and adapt. If smolts cannot live in an estuary, it is a sign that other plants and animals are at risk, also. Different species of salmon spend different amounts of time in estuaries. Some leave almost immediately, while others spend several months there. While approximately 30 fry from a redd of 2000 to 2500 eggs grow into smolts, less than four survive to become adults.
- 22; Growth per fish over time can be represented as a function of own weight, feeding, density, temperature, hours of light per day, and other biophysical factors. However, a number of studies show that all feeding regimes, other than ‘feeding to saturation’, will substantially increase the feed conversion ratio (i.e. feed quantity per kilogram of growth) and consequently costs (Talbot, 1993). It is interesting that wild salmon often will not feed at all during the winter months.
- 28; Norway’s salmon farms are spread along its long coastline with its many fjords, inlets and islands that in combination with relatively stable water temperatures (ranging from 4 to 15°C) and good infrastructure provide a favourable environment for salmon farming. From 1990 to 2008 the industry nearly quadrupled its production, with an average annual growth rate of 9.6%.
- 29; 1994년 소유권제한이 해제되면서 통폐합과 국제화가 진행되어 생산성이 향상되었고 2008년 기준 연어양식장 28개, 스몰트양식장 220개가 운영되고 있다.
- 30; 2008년 노르웨이의 수출은 75%가 Fresh round chilled salmon였다. 이는 인건비와 가공식품에 대한 높은 관세가 주요 이유다.
- 32; 칠레는 연어 양식에 좋은 자연환경을 가지고 있어 태평양연어에 주력했지만, 시장에서 대서양연어를 선호하면서 대서양연어를 도입하여 연어 생산량의 56%를 차지하게되었다.
- 33; 칠레는 상대적으로 규제가 더 자유롭고 낮은 인건비와 세계2위의 fish meal 생산국으로서 사료비절감도 상승효과를 내고 있는 이유다. 2006년 4대기업의 생산량이 58%에 달하고 10대기업 누적은 85%다. 미국수출이 90%에 달하고 항공을 통하므로 운송비용의 문제가 있다.
- 38; 캐나다에서는 태평양연안에서 연어양식이 시작되었고 시장에서 인기있는 대서양연어가 도입되어 2001년에 태평양연안 생산량의 86%를 차지하게 되었다. 대서양연어만 양식하는 대서양연안의 연어 생산량은 35%로 태평양연안의 60%를 더하면 95%를 차지한다. 4개대기업이 차지하는 비중이 92%로 고도로 집중되어있다.
- 39; 캐나다 생산량은 주로 미국에 수출되고 국내용이 두번째로 많다. 대서양연안의 생산증가는 부지 가용성과 불리한 환경조건으로 제한적이다. 태평양연안은 가능성이 있지만, 환경단체 등의 반대로 인한 규제가 이를 낮추고있다.
- 44; 노르웨이는 1992년까지 기업은 단 하나의 양식장에서 과반수지분을 보유할 수있었는데 이는 정부가 자영업 구조를 원했기 때문이었다. 하지만 이러한 자본구조로는 경쟁력 유지가 어렵다는 것이 확실해지면서 이러한 규제는 폐기되었다. 이에 따라 대형화가 진행되었고 여전히 남아있는 면허의 20%이내제한 정책에 따라 국경을 넘는 세계화로 규모의 경제에 의한 생산성 증가와 공급가격하락이 가능해졌다. 생산량규제는 pen volume에서 maximum total biomass (MTB)로 변경되어 보다 많은 융통성을 부여하고 있다.
- 45; 1990년대 후반에는 여러 양식업자가 하나의 양식장에서 생산가능하게 되어 규모의 경제를 추가하고 있다.
- 48; 생산량증가에 따른 비용하락을 발생시키는 규모의 경제뿐만 아니라 마케팅 등 공동비용이 큰 여러 종목의 생산에 따른 비용감소를 위한 범위의 경제가 세계화를 통해 이룩되었다.
- 52; 수익이 높은 분야는 생산이 증가하는 것이 수요공급법칙의 기본이다. 연어생산량이 최근 10년간 증가했다는 것은 수익이 높았다는 것을 강력하게 시사한다. 수익은 판매량과 판매가격의 곱인 매출에서 비용을 공제하여 계산되는데 여기서 판매가격의 하락은 판매량의 증가를 유인한다. 결국 수익증가의 요점은 생산단가의 하락이다.
- 53; 1985년 불변가격을 기준으로 2008년은 30%수준이고 생산비용은 28%수준으로 하락하여 수익폭은 일정하게 유지되고 있다. 생산비용은 질병이나 먹이가격 인상으로 소폭 증가하기도 하지만 생산성증가에 따라 하락추세를 지속하고 있다.
- 57; 규모의 경제에 따라 톤당 명목생산비는 1985년 32.00에서 2008년 18.17크로네로 하락했다. 스몰트를 포함하여 대부분의 항목비용이 감소했지만 유일하게 사료는 명목비용은 11.00에서 9.76로 소폭하락했지만, 스몰트가 7.96에서 2.09으로 하락하는 등 다른 항목의 하락폭이 상대적으로 커서 비중은 전체비용의 34%에서 54%로 유일하게 증가했다.
- 59; In current European formulas, about 35% of the feed is fish meal, which to a limited degree has been substituted for with vegetable meals, since the supply of these meals is significantly larger. About 26% of the feed is oil, of which fish oil currently makes up almost two-thirds. In Canada and Chile there is generally a lower share of marine input as differences in regulations allow a higher share of animal meals, because several retail chains in Europe require a minimum share of marine inputs in the feed. One may think that a cost share of over 50% for feed is high. However, if one looks at comparable industries like pork and poultry, it is not very high. In particular, for the most efficient poultry producers, the cost share for feed is about 80%. 이것은 사료비용비중은 더 커질 수있고 그만큼 사료비용의 절감을 유도하는 정책이 가격경쟁력 유지에 중요하다는 것을 시사한다.
Somewhat surprisingly, Tveterås and Heshmati (2002) found that technical progress at the farm level explains only about one- third of the reduction in production costs. Decreases in input factor prices, or technological innovations among the suppliers of input factors, make up the remainder.
- 61; 양식산업 초기에는 많은 사료가 낭비되어 바닥에 축적됨으로서 비용과 오염이 발생했지만 기술의 발전으로 점차 개선되었다. Hence, the feed conversion ratio or feed factor, defined as the ratio of feed to the quantity of salmon produced, has decreased over the years from 7.96 in 1988 to 1.24 in 2008 for the average farm. 항생제의 사용도 스몰트백신이 도입되면서 대부분 중단되었다.
- 64; Breeding in its simplest form is a way to help natural selection. Instead of letting nature select the strongest, breeders define some traits to be selected for. In the early 1970s, Norwegian farmers started a 4- year breeding programme for Atlantic salmon, based on fertilised eggs from Norwegian rivers. The eggs hatched in January 1972, 1973, 1974 and 1975 made up the base population of the four nucleus populations. The populations were tested in common aquaculture environments, and the fish that performed best were used as parents in the next generation. Today, four different strains of Atlantic salmon are used in one breeding programme, as the generation interval is 4 years.
선택의 첫 특성은 성장성능이었고 이를 통해 성장률이 거의 두배로 증가했다. 또한 배란이 발생하면 품질이 하락하기에 1981년에 성적성숙을 지연시키는 것을 두번째 특성으로 선택하여 품질을 유지시키면서 성장을 지속할 수있었다. 1993년이후 추가된 특성은 질병저항성, 살색, 그리고 체성분 등이 있다.
- 69; 1981년의 세계 연어생산비중은 노르웨이가 69%에 달했지만 반덤핑규제로 인해 2008년에는 50%로 감소했고 칠레가 37%, 영국과 캐나다가 5%씩을 차지하고 있다.
- 74; The main global concern is that increased demand for feed from a growing aquaculture production will increase fishing pressure on wild stocks and consequently threaten the sustainability of the associated capture fisheries, since marine proteins are important ingredients in the diet for cultured seafood.
The aquaculture industry is the largest user of fish meal, with 59% of the available quantity in 2008. pork and poultry jointly consume 40%. For most of these species, fish meal only accounts for a small part of their diet. Other protein meals, with soya as the largest, make up the major share. Fish meal production is minor compared with the total protein meal production at about 5% of total production. If fish meal is a part of the larger protein meal market, increased aquaculture production will not result primarily in increased demand for fish meal, but rather increased demand for protein meals, of which vegetable meals account for the majority. Furthermore, if fish meal is not an essential ingredient in fish feed, higher prices of fish meal will turn feed producers for aquaculture away from fish meal and thereby reduce demand from aquaculture.
- 84; most salmon farms are now located in areas with relatively strong currents, deep water and suitable seabed topography. This significantly reduces the accumulation of waste sediments and negative feedback effects on productivity. In areas with unsustainable locations, salmon farms have disappeared. Thus, the combination of new sea cage technology, which allows sites to be moved to more exposed locations, rotation between different sites, and improved feed and feeding technology has significantly increased the elasticity of substitution between traditional factors of production and effluent discharges.
- 108; 미국은 유럽과 일본다음으로 큰 연어시장이다. 일본과 달리 소비량이 빠르게 증가하고 있어 칠레와 캐나다의 양식연어를 많이 수입하고 있다. 가장 많이 소비하는 해산물은 Shrimp으로 인당 4파운드이고 다음이 Tuna, Salmon, Pollock, Tilapia, 그리고 Catfish순이다. 대부분이 양식으로 생산된 것이다.
- 111; 1990년까지 노르웨이가 주요 공급업체였지만 26%의 관세가 부과되면서 캐나다가 그 자리를 차지했고 1990년대 후반에 칠레가 뒤를 이었다. 특히 저렴한 인건비로 경쟁력을 가진 가공제품의 공급이 많다.
- 126; The first important question is ‘What is the market?’ The simplest definitions are often based on the relationship between prices. Stigler (1969) defined a geographical market as ‘the area within which the prices tend to uniformity, allowances being made for transportation costs’.
- 131; 수익증가를 위해서는 시장규모가 커지면서 점유율이 같이 증가하는 경우가 가장 이상적이다. 시장규모는 가격이 낮아지면 커지며 이는 점유율증가에도 도움이 되기에 원가경쟁력을 가지는 것은 중요하다. 장기적으로 가격이 원가이하라면 사업을 할 이유가 없기 때문이다.가격에는 관세가 추가되는데 이는 국제화를 통해 해결가능하다. 미국에는 칠레회사를 인수하여 공급하고 유럽에는 노르웨이회사를 통해 공급하면 관세회피가 가능하기 때문이다.
- 140; 신규공급에 비교적 오랜 시간이 필요한 것은 주택과 유사하지만 필수재로 대체제가 제한된 주택과는 다르게 많은 대체제가 있는 연어는 가격탄력적이다. 따라서 가격이 1%하락하면 수요는 1%이상 증가한다. 이는 공급이 증가하면서 하락하는 추세다. 연어수요도 소득탄력적이다. 따라서 소득이 1%상승하면 수요는 1%이상 증가한다.
- 157; Shrimp is the most valuable farmed species and the seafood species with the highest trade value. Several species are farmed, with white shrimp and black tiger prawns being the most important.
- 159; 새우도 키로당 가격이 1985년 10불에서 2008년 4불로 하락하면서 생산량도 200천톤에서 3500천톤으로 급증했다. 이는 포획량도 많았지만 생산원가의 절감에 기인한다. 다만 가격하락은 연어와 같이 30%수준까지는 아닌데 양식새우의 비중이 작기 때문으로 보인다.
- 164; Tilapia is an African species that is now being produced in subtropical areas globally. While not carnivorous in nature, tilapia grows faster with fish meal-based feed. Moreover, it not only grows quickly but can also reach marketable size of 500–800 g in as little as 3 months.
https://www.amazon.ca/Economics-Salmon-Aquaculture-Frank-Asche/dp/0852382898
Asche, F., & Bj?ndal, T. (2011). The Economics of Salmon Aquaculture, Second Edition. https://doi.org/10.1002/9781119993384
Stigler, G.J. (1969) The Theory of Price. London: Macmillan.
Talbot, C. (1993) Some aspects of the biology of feeding and growth in fish. Proceedings of the Nutrition Society 52, 403–416.
Tveterås, R. & Heshmati, A. (2002) Patterns of productivity growth in the Norwegian salmon farming industry. International Review of Economics and Business 49, 367–393.
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https://www.wiley.com/en-ca/The+Economics+of+Salmon+Aquaculture%2C+2nd+Edition-p-9781119993377
Preface ix
1 Introduction 1
2 The Production Process in Aquaculture 7
2.1 Salmon production 9
2.1.1 Biological system 9
2.1.2 The grow-out phase 12
2.1.3 The physical system 15
Bibliography 16
3 The Supply of Salmon 17
3.1 Farmed salmon production 17
3.1.1 Norway 18
3.1.2 Chile 23
3.1.3 United Kingdom 26
3.1.4 Canada 29
3.1.5 Other farmed salmon producers 30
3.2 Wild salmon production 31
3.3 Regulation of salmon aquaculture 34
3.3.1 Norway 34
3.3.2 Scotland 36
3.3.3 Chile 38
3.4 The growth of large multinational companies 39
Bibliography 41
4 Productivity Growth and Technological Change 43
4.1 Declining costs 43
4.2 Scale 45
4.3 Structure of production costs 48
4.4 Smolt production 51
4.5 Improved feed quality 52
4.6 Diseases and increased survival rates 53
4.7 Breeding 55
4.8 Cycles in profi tability 56
4.9 Catching up: regional differences 58
4.10 Productivity development in Norway relative to other producers 59
4.11 Cost reductions in the supply chain 62
Bibliography 63
5 Environmental Issues 65
5.1 The fi sh meal trap 65
5.1.1 Fisheries management 66
5.1.2 The markets for oil meals 69
5.1.3 Concluding remarks on the fi sh meal trap 72
5.2 Local issues 73
5.2.1 Organic waste 74
5.2.2 Antibiotics and chemicals 76
5.2.3 Salmon escapees and sea lice 78
5.2.4 Concluding remarks 80
Bibliography 80
6 Markets for Salmon 83
6.1 The European Union markets 84
6.1.1 France 85
6.1.2 Germany 88
6.1.3 United Kingdom 89
6.1.4 Spain 90
6.1.5 Italy 91
6.1.6 Denmark 92
6.1.7 Poland 93
6.2 The Japanese salmon market 94
6.2.1 Japanese salmon supply 97
6.2.2 Outlook for the Japanese salmon market 99
6.3 The United States salmon market 100
6.3.1 US seafood consumption 100
6.3.2 Imported fresh and frozen salmon 103
6.3.3 Market trends 105
6.4 The Russian market 105
6.5 Price development 107
6.5.1 Real versus nominal price 108
6.5.2 Exchange rates 109
6.5.3 Prices in different markets 110
6.5.4 Prices in different weight classes and for different product forms 113
Bibliography 116
7 Competitiveness and Market Structure 119
7.1 What is a market? 119
7.1.1 Market size 121
7.1.2 Market power 122
7.2 The salmon market 123
7.2.1 Pacifi c salmon 124
7.2.2 The early development of the Atlantic salmon market 125
7.2.3 Early development of the farmed Pacifi c salmon and salmon trout market 126
7.2.4 Fresh versus frozen 126
7.2.5 Declining prices, new sales outlets and product forms 127
7.2.6 Salmon and supermarket chains: a marriage made in heaven 129
7.3 The size of the market 131
7.4 Salmon marketing 133
7.4.1 Health benefi ts, food scares and environmental concerns 134
7.5 Trade restrictions 136
7.5.1 Trade restrictions in the salmon market 139
Appendix: a market model 142
Testing for market interactions 147
Bibliography 148
8 Lessons for Other Farmed Species 151
8.1 Other farmed species 151
8.1.1 Shrimp 151
8.1.2 Sea bass and sea bream 153
8.1.3 Turbot 156
8.1.4 Tilapia 157
8.1.5 Other species 160
8.2 Lessons from other farmed species 160
Bibliography 162
9 Optimal Harvesting of Farmed Fish 163
9.1 A biological model 164
9.2 Bioeconomic analysis 165
9.2.1 Zero costs 166
9.2.2 Harvesting costs 168
9.2.3 Feed costs 168
9.3 The rotation problem 169
Appendix: optimal harvesting of farmed fish 171
A biological model 171
Bioeconomic analysis 172
Harvesting costs 175
Feed costs 177
Feed and harvesting costs 179
The rotation problem 179
Optimal harvesting: examples 182
Bibliography 184
10 Production Planning in a Salmon Farm 187
10.1 Cash fl ow analysis 188
10.2 Smolt release and biomass growth 190
10.3 Sales revenue 193
10.4 Feeding costs 195
10.5 Net present value 197
10.6 Selective harvesting 199
11 Investment in a Salmon Farm 201
11.1 A production plan 201
11.2 A liquidity budget 205
11.3 Cost of production 209
11.4 Investing in a new aquaculture company 211
11.5 Licence value 215
11.6 Buying a fi sh farming company 217
References 221
Index 231