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Aquaculture Canada 2018 concluded Wednesday at Hôtel Le Concorde in Québec City with 250 delegates discussing the latest industry topics led by developments in recirculating aquaculture systems, improving farming practices and sustainability through new technology and public perception of the industry.
Kuterra LP, the land-based Atlantic salmon farm on northern Vancouver Island in British Columbia, says market supply of its fish will stop from June as it undertakes a “much-needed maintenance break.”

After it delivers its last harvest in June, sales of Kuterra salmon will resume in early summer 2019 when the smolts currently growing in another part of the facility will have reached maturity, according to the company.

“We've been making changes to our facility as we go, but the next changes have to be done with some of the tanks emptied. Examples of these important changes are overhauling a key part of the water filtration system, upgrading the cooling system, and salt-proofing key components to protect against the level of salinity in our water,” said Garry Ullstrom, CEO.

Improvements to Kuterra’s operations over the past few years have turned things around for the company. It became “cash-positive” for the first time late last year.



A major study examining the fish-eating habits of pregnant women has found that they are not linked to autism or autistic traits in their children.

Scientists at the University of Bristol looked at the assumption that mercury exposure during pregnancy is a major cause of autism using evidence from nearly 4500 women who took part in the Children of the 90s study.

Using analysis of blood samples, reported fish consumption and information on autism and autistic traits from one of the largest longitudinal studies to date, researchers found no links between levels of mercury in the mothers and autism or autistic traits in their children. The only adverse effect of mercury found was poor social cognition if mothers ate no fish at all, especially for girls.

"Our findings further endorse the safety of eating fish during pregnancy. Importantly we've found no evidence at all to support claims that mercury is involved in the development of autism or autistic traits,” said lead author and founder of the Children of the 90s study Professor Jean Golding.

"This adds to a body of work that endorses the eating of fish during pregnancy for a good nutritional start to life with at least two fish meals a week."

It was a long time coming but Delaware’s shellfish aquaculture program has officially kicked off with the planting of the first oyster seeds in Sussex County’s Rehoboth Bay.
A nationwide survey conducted to better understand American consumer perception of aquaculture found that the growth of US aquaculture rests on consumer education and strategic outreach.

Globally, the marine aquaculture industry generates roughly $166 billion per year and is predicted to see steady growth for years to come, but the US, in contrast, lags in terms of production levels, said the study from the University of Maine.

It noted there is growing interest in the industry in cities and towns across the country, but there must be a general understanding and acceptance of farmed seafood by the public in order for the industry to grow.

With a better understanding of consumer decision-making and awareness, stakeholders would be better able to recognize the challenges and opportunities that the industry faces in terms of growth potential and visibility, suggested researchers at the University of Maine.

The survey, which generated more than 1,200 responses from across the country, found “numerous gaps in consumer knowledge about the industry.”

“Public opinion, as we know it, is somewhere in the middle,” says Ross Anthony, a graduate student in resource economics and policy at UMaine, who analyzed survey data. “There’s a lot of uncertainty in how people feel about aquaculture and there is a lot of work left to be done.”

Data also revealed a need for targeted efforts to address knowledge gaps in various demographic groups, including people who are older, have less education, and live in landlocked states.

Interest and engagement with aquaculture increases in communities with high rates of seafood consumption, the survey found. For instance, in Maine where the sea-to-table relationship is more pronounced, fish farmers can use this information to design impactful marketing campaigns and educational programs to increase consumer awareness.

Participants expressed a desire to learn more about aquaculture and seemed, for the most part, open to expansion within the industry, as long as it doesn’t affect other coastal recreation activities.

But few respondents indicated they had actively sought information about aquaculture or related technologies. Data suggested television advertisements, social media postings, and specially designed package labeling might be the best way to reach citizen consumers.

The findings also indicated consumers hold a positive view of scientists and scientific research, which suggests public outreach should be designed with a scientific lens in mind.

While there are many public discussions to be had about the risks and benefits of aquaculture, the research team was encouraged by the general open-mindedness suggested by the responses and believe the information can be used to steward resources toward ongoing research and community conversation.

“People are really on the fence because they don’t have enough information to make a solid opinion about it,” says Murray.

UMaine assistant professor of economics Caroline Noblet and assistant professor of risk communication Laura Rickard led the research team.

Cermaq Canada will no longer sell ASC-certified salmon from its sea-lice affected farms in British Columbia until it has resolved the situation, the company said today.

On May 4, the salmon and trout producer announced that sea lice counts at some of its farms in the Clayoquot Sound region in BC have been higher than usual.

Today’s announcement by Cermaq follows a call by SeaChoice for the Aquaculture Stewardship Council to “immediately suspend” Cermaq Canada’s Dixon Bay, Millar Channel and Ross Pass farms from using the ASC label. An ACS certification verifies that the product was raised in an environmentally and socially responsible manner.

“Cermaq takes this matter very seriously and is actively addressing it as quickly as possible through a number of strong actions, both immediate and longer-term in nature,” said David Kiemele, Managing Director for Cermaq Canada, who also said it has spoken with ASC representatives on Friday.

The company said it is “using multiple tools in the immediate-term, including depopulating affected farms while treating others with an environmentally safe hydrogen peroxide bath.” Next year it will start using a hydrolicer, a non-chemical method of combating the sea lice.

“We are 100% committed to investing in robust sea lice control measures, and are continuing to enhance them through investment in new equipment and ongoing research,” said Kiemele.

Marine Harvest’s operational earnings and profit fell by 28 percent and 15 percent, respectively, but the Norwegian salmon producer remains optimistic.
Calls to move salmon farming from open-net pens in the ocean to land-based farms will not only increase the pressure on wild salmon but also kill an entire industry in British Columbia and more than 6,600 jobs, according to the BC Salmon Farmers Association.

The association called the recommendation of the Pacific Salmon Foundation for BC to remove open-net pen fish farms and switch to land-based salmon aquaculture as “premature and misguided.”

BCSFA spokesperson Shawn Hall reiterated what initial findings from research under the ongoing Strategic Salmon Health Initiative have so far shown — that there is “no direct evidence that salmon farms are negatively impacting the health of wild Pacific Salmon.”

“In fact, there is important data regarding the health of wild salmon the research team has yet to make public that we believe is important for the public debate,” says Hall.

Calls for switching salmon aquaculture from open-net pen operations to land-based farms are growing as the renewal period for 22 fish-farm tenures in BC approaches in June. A newly formed environmental group calling itself Wild First has added its voice to this call.

Land-based aquaculture is, however, still in its infancy. The technology has yet to prove itself in growing salmon to maturity, and the costs of building a land-based farm remain prohibitive. “So far no one has succeeded because the costs are so high. The oldest one is in Denmark and it has been bankrupt three times,” Alf-Helge Aarskog, CEO of salmon farming giant Marine Harvest, told the Vancouver Sun in April.















Contrary to popular belief, small- and medium-sized commercial fish farms growing affordable fish were behind most of the growth in the global aquaculture industry over the past three decades and not large corporations growing fish for export nor tiny backyard farms growing fish for family consumption, according to three prominent academics.

Simon Bush (professor and chair of Environmental Policy, Wageningen University, NL), Dave Little (professor of Aquatic Resources Development, University of Stirling, UK) and Ben Belton (assistant professor of International Development, Michigan State University, USA) recently published their views on this topic on the World Economic Forum website.

Bush, Little and Belton say that while the aquaculture industry has advocated very small farms to feed the poor, their research shows that most of the fish being eaten by poor people in developing countries “comes from a dynamic new class of small- and medium-scale commercial farms, the existence of which is rarely recognized.” The trio point to Bangladesh as an example, where the farmed fish market grew by a factor of 25 over the last 30 years to exceed 2 million tons in 2015. This growth in supply caused the price of farmed fish to fall by almost 10 percent from 2000 to 2010, and its consumption by poorer householders increased rapidly over this period.

“The ‘quiet revolution’ in farmed fish supply has been driven neither by corporate agribusiness nor by tiny backyard farms,” conclude Belton, Bush and Little. “Rather, most of aquaculture’s growth over the past three decades has come from a dynamic and increasingly sophisticated segment of small- and medium-sized commercial farms and the myriad businesses that support them…Rather than focusing on producing expensive species for export markets or wealthy domestic customers, these unsung heroes have focused on growing affordable fish such as carp. Where these species are produced in large quantities, they have become affordable for huge numbers of low- and middle-income consumers close to home.”

These academics believe that while the existence of many small and medium operations growing affordable fish is yet to come in many developing countries, particularly in Africa, these countries can make this transition through learning from peer nations where aquaculture has boomed.

        

A scathing review of the Canadian federal government’s management of the salmon industry brings to light the lack of a department at the federal level dedicated to overseeing the aquaculture industry.

Canada’s environment watchdog last week gave Fisheries and Oceans Canada (DFO) a failing grade for its handling of the farmed salmon industry. DFO defines itself as the agency that “oversees Canada’s fisheries and safeguards its waters.” That the word “aquaculture” is missing from this definition is quite telling.

Canada’s seafood farmers have been pushing for an agency at the federal level focused on overseeing and advocating for the $1-billion industry, and for a federal aquaculture act.

“A Federal Aquaculture Act can address many of the issues raised in the Commissioner’s audit and clarify roles and responsibilities of federal regulators, critical for protecting the environment and growing sustainably,” said Timothy Kennedy, Executive Director of the Canadian Aquaculture Industry Alliance (CAIA).

“We understand the federal government is doing a comprehensive review of its approach to aquaculture. This includes looking at a new Aquaculture Act that will provide a modern legal framework for managing the sector. While a new Act by itself will not address all of the Commissioner’s findings, Canada will finally join other major international producing countries in adopting a modern Act that will enhance performance of the sector, environmental protection and economic growth.”

Citing other salmon-producing nations, such Norway, that have “a very strong growth and support component,” Kennedy believes Canada’s salmon farming industry will also flourish if the country has a Federal Aquaculture Act.

“We cannot grow this sector and compete effectively unless we have clarity around the responsibility of the federal government,” Kennedy said.

Among DFO’s shortcomings noted in the Commissioner’s report are its lack of a national standard for nets and other equipment to prevent escapes, and lack of limits on the amount of drugs and pesticides fish farms can use to treat diseases.

The report also found the department had not completed risk assessments for major known diseases, was not addressing new and emerging diseases, was not adequately enforcing regulations aimed at minimizing harm to wild fish, and has no requirement to monitor the health of wild salmon or the status of the ocean floor beneath open net pen salmon farms.

But Susan Farquharson, Executive Director, Atlantic Canada Fish Farmers Association, said “it is important to remember that the DFO is not the primary regulator of salmon farming in Canada.”

“The report does not take fully into account the vital role that other federal agencies and provincial governments play in regulating the salmon farming industry in Atlantic Canada. The provincial regulations work well. Our farmers adhere to rigorous environmental regulations, policies and codes of practice developed by government, scientists and industry. These codes ensure our fish are healthy, properly contained in their pens and that waste is managed responsibly to avoid benthic impact,” Farquharson said in an email to ANA.

Joel Richardson, Vice President Public Relations at Cooke Aquaculture, agrees. “Both the federal and provincial governments already strictly regulate Canadian fish farms. All salmon farms in Canada are certified to Best Aquaculture Practices/ Global Aquaculture Alliance or Aquaculture Stewardship Council certification so not only are farmers in compliance with legislation and regulations, but they are compliant with global standards. As such, fish farmers adhere to rigorous environmental regulations, policies and codes of practice developed by government, scientists and industry,” he told ANA.

The farmers’ “high compliance with licensing conditions” is something that the Commissioner’s report also acknowledged. As did the CAIA: “Salmon farming in Canada today is sustainable, diverse and growing. We can be very proud of our global best practices that produce the highest quality and most nutritious seafood in the world,” said the association.

The commissioner’s report could still prove to be a catalyst for the establishment of a federal agency for aquaculture.

Kuterra CEO Garry Ullstrom told ANA: “Any initiative to establish a separate body to oversee aquaculture in Canada would need to incorporate the findings of the 2017 report from the Federal Advisory Council on Economic Growth. That report highlights the importance of innovation to maintaining Canada's standard of living and growing the economy. We support the report's recommendation that the government aid the expansion of the innovation economy by modernizing regulations and expediting permitting for clean tech companies, such as land-based salmon farming." As for the specific comments in the Commissioner's report, I'd expect that open net-pen industry, or politically engaged people or organizations would have informed comments, for example First Nations, environmental groups or politicians such as BC MP Fin Donnelly. Where Kuterra can offer comment is on federal policy related to the land-based industry.”

Cooke Aquaculture is supporting flood relief efforts in the Canadian suburb of Grand Bay-Westfield outside Saint John, New Brunswick.

The salmon producer, based in Blacks Harbour, New Brunswick, said it is sending a truck loaded with 10,000 sand bags to help protect the affected village from rising floodwaters.

Cooke said it also has boats and equipment on standby to assist if needed and is in daily contact with an emergency measures organization.

Production of farmed fish puts less strain on our ecosystem than terrestrial livestock production because the amount of cropland required to feed fish is less than what livestock require, says a new study.

Researchers from UC Santa Barbara's National Center for Ecological Analysis and Synthesis (NCEAS) examined how much land would be required to grow the seven most common crops used to feed both terrestrial livestock and farmed fish.

A cow requires anywhere from six to 30-plus lbs of feed to gain one lb of biomass, while most farmed fish need just one to two lbs of feed to do the same. This efficiency translates into much less cropland required to grow feed for the fish that people eat, the study said.

The study revealed the potential benefits of shifting human diets away from meat and toward other protein sources, including seafood.

"The expansion of agriculture across the world is driving most species extinctions and the dramatic loss of ecosystems," said Claire Runge, a research scientist at University of Tromsø - The Arctic University of Norway, told UCSB’s The Current. “Aquaculture offers one way to reduce some of this pressure on our natural landscapes, wild places and wildlife."

While aquaculture is not a panacea for sustainable food production, “the potential is ripe to really do it right,” says lead author Halley Froehlich, a postdoctoral researcher at NCEAS. These include strategic siting of farms and adoption of sustainable feed practices, she said.

"We hope that awareness of how much land can be spared with a fish-rich diet helps individuals make the change,” said co-author Ben Halpern, director of NCEAS. “Similarly, we hope our results put more 'fish on the bones' of policy arguments to make more systematic changes."









Are you thinking about shifting to land-based aquaculture but don’t know where to start? If you, like many others, find it hard to quantify adequately the risks and rewards of a land-based recirculating business, who better to ask than someone’s who’s been through the process of building one? Samuel Chen has, over the past five years, led the development of Hudson Valley Fish Farms, one of the first commercial land-based recirculating farms in North America. During this time, he had the opportunity to evaluate numerous aquaculture facilities from net pens to the full range of closed-containment farms. His role has been to oversee business development, marketing, sales, regulatory affairs, and HR. Samuel doesn’t sugarcoat it for you. Starting a land-based farm, which he likens to “birthing,” isn’t easy. There’s a steep learning curve, he writes, and the Financial Office plays a crucial role from Day 1.

Vision

Our vision at Hudson Valley Fish Farms (HVFF) to raise “Wildly Delicious Steelhead”™ in land-based recirculating systems has been a five-year journey before seeing our first fish come to market. This was a leap of faith driven by a vision to be the tip of the spear for a hyper-sustainable way to farm seafood in urban centers across the US.

Our journey has not been a project but the birthing of a business, which has no defined end but rather is a process of bringing together people, process and technology. A project mindset is inevitably finite and short term in nature. A business venture is a going concern that is supported by multiple functions including finance and accounting, which provide a lens to the best path forward and an objective report on progress. These are functions that help us understand execution challenges and risks. However, the Financial Office (FO) cannot be the driver of the vision. The financial view, just like a regulatory-legal view, is not the singular lens for go-no-go decisions.

This is what troubles me as I see new or prospective land-based systems being proposed. Too many of these new ventures are sold to investors as projects with unrealistic financial expectations. The business plans are grossly oversimplified and borrow on models like Michael Porter’s Five Forces to show business viability and competitive positioning.

The pitch usually goes a bit like this – “with control of upstream supply (e.g. broodstock or eggs), securing of downstream sales through off-take agreements (which are actually more letters of intent than agreements), and a team with strong credentials, one is competitively positioned to deliver expected annual returns of 15 percent and a return on capital is possible in three years.” Business plans like these are driven by spreadsheets developed by FOs.

History shows a rule I once heard in an aquaculture short course with Michael Timmons…the 2:2:1 rule. The build will cost you twice as much, take you twice as long as you planned and you will get half of what you projected for your product.

But why is this? I have had the opportunity to experience first hand the development of HVFF and my belief is that it is a matter of understanding phases of development in the birthing process. I propose that land-based recirculating farming should be broken into three key phases – BUILD | OPERATIONS | MARKET ALIGNMENT. The FO has the opportunity to play a life-giving role in both the pre-venture stage as well as in each of these phases through risk management. This necessitates an FO that learns together and evolves with the core business.

In the pre-venture stage, rather than focusing on manipulating spreadsheets and estimating cost and returns (which if provided should be at best understood as a level 5 estimate as outlined by AACE with a range of +100 percent or -50 percent) – FOs should focus on cash flow and burn-rate analysis. It is easy to underestimate costs and timing of returns as there are many variables that only become clear through the subsequent phases once a commitment has been made. The right investor will have the ability to absorb a burn rate for four to five years without seeing any revenue come in from the fish. A rough timeline with milestones should be developed and refined at each stage. Tax implications should be looked at against other investments or business operations that the investor has.

Build

This is the only phase that should be managed like a project with a defined beginning and end. In fact, one of the key roles that the FO should play is a disciplined approach to ensuring completion by the planned date. Delays mean increased costs due to changes in cost of materials, longer time frames to continue paying contractors, and most importantly deferred revenue. This would also mean that finance should be reviewing vendor contracts with the builder/project manager to assess risk of cost and delivery overruns. This phase is about cash-burn and finance can play a critical role in managing the timing of these spends (looking at offsets), potential hedging on currency if supplies are being brought in from out of country (at HVFF, we have equipment from nine different countries), ensuring quoting across multiple vendors and clarifying responsibilities for changes to design. Changes to design result in multiple iterations of as-builts and accumulating unused equipment and supplies (every farm will have a bone yard).

As an aside, it is often in executing this role that the FO can alienate themselves from the build and operations team by taking the controllership role to mean catching what the build team is doing wrong. I remember an instance in our journey where someone from the FO accused our builder of stealing because the price of concrete was triple to what he was told was common in the construction world. Instead of being inquisitive and educating himself on what he does not understand, he made accusations. If he had asked, he would have found out that there were special additives to the concrete used in aquaculture that were necessary to ensure water impermeability and that using certain types of concrete (common to construction) could leach out toxins that would kill fish. The inability to ask the right questions or foster open dialog will kill the FO’s ability to be involved and contribute. During this phase, there is industrial-scale plumbing, infrastructure build and electrical that need to come together with location specific permitting requirements. It is not possible for any one person to have in depth expertise in all areas. The FO needs to learn together and work collaboratively with the build team if they are to be able to be a trusted ally and source of objective reality for the project.

Operational

During this phase, one of the FO’s key roles would be to begin classifying heads of expense. An Activity-Based Costing approach should be taken to ensure there is full absorption in the cost of production (CoP) calculation. There will be a lot of “noise” in the numbers that should be filtered out and the FO has a key role in identifying true categories of expense. A high-level business plan may have been developed in the pre-venture stage but it is only in this phase and the next that it is refined into something meaningful.

Amortization and depreciation is perhaps one of the most complicated aspects when it comes to working this into the CoP. I have heard many a conversation around the time frame one should look at for the investment and how to work this into depreciation. This is a gross oversimplification and the FO should really be looking at the lifespan of different capital both from a depreciation and a maintenance budget perspective. There are categories of assets that are more consumables than long-term assets. For example, pumps will have a known lifespan by hours used and would fall under the previous category whereas tanks would fall under the latter. Rather than coming up with an annual maintenance budget that is just a percentage of capital investment (few farms would have the financial luxury to actually set this aside), the FO could delve in deeper with the builder/operational team to understand the likelihood of different categories of equipment that need to be replaced or maintained.

Another key role of the FO is to ask questions regularly around things that concern the operational team and to translate this into a probability and severity to quantify the risk financially. A good FO will help the business systematically and regularly evaluate financial implications of the different aspects in the inner ring and elicit the business to look in more detail at the outer ring to develop plans.

Market risk

Once the farm is operational, as defined by the ability to consistently produce fish, it is the phase in which costs need to be optimized and markets need to be aligned to ensure profitability and returns. It is also during this phase that business processes should begin to be standardized.

Again, the FO could plan a significant role in modelling scenarios and provide analysis for operations to explore efficiencies and for sales to focus on channels that offer higher returns. As an operation matures, it also has the ability to explore different product forms, ranging from head-on gutted fish to fillets to portions to specialized cuts. This kind of segmentation by both product and customer creates the need for analysis of complex blended margins and ultimately contribution to the bottom line.

It is also at this stage that Porter’s Five Forces are more relevant. The FO has an opportunity to facilitate strategic discussions at the leadership level around upstream and downstream integration through the value-chain. As an organization moves from the operational to market phase of a business, data also begins to become more stable and the opportunity for reports and the development of key performance indicators are also made possible. The FO should be providing cash flow reports, trial balances, sales reports and analysis of receivables.

In summary, land-based recirculating aquaculture is a long-term venture that goes through different phases of development as it journeys towards a viable business. Finance and accounting can play a much greater enablement role than providing spreadsheet economics if it learns with and evolves with the core business.

The views presented in this article do not necessarily represent the official views of Hudson Valley Fish Farms but are the personal opinions of the author.









A lot, according to results of a poll conducted by the Aquaculture Stewardship Council (ASC).

The organization said majority (92 percent) of ASC-certified fish and shellfish farmers who responded to the survey found that ASC certification enhanced their reputation; 90 percent benefited from meeting buyers’ preference; and 87 percent gained access to new market opportunities.

An ACS certification verifies that the product was raised in an environmentally and socially responsible manner. To date, more than 600 farms have been certified, the majority of which are in Europe and Asia, and 11,000 different products are available on the market bearing the ASC consumer label. ASC surveyed farms certified to all eight ASC Farm standards and got a 21-percent response rate.

In addition to the aforementioned benefits, the farmers said they valued the opportunity to reduce their environmental impact, and three quarters had become more aware of sustainability issues related to feed use.

More than one third of them found that their use of antibiotics and therapeutic medicines had decreased, while a quarter reported that their feed conversion ratio had lowered, thus reducing feed costs and environmental impact. Notable improvements in water quality and a reduction in fish mortalities were also linked directly to working through the ASC certification process, the organization said.

ASC certification was also found to have a positive effect on local communities, with 67 percent experiencing improved relationships. Over two thirds of farmers were found to actively support local communities through social projects, financial support and sponsorship of sporting events.

“Overall the survey showed us that we are doing a lot of things right. Our farm partners are important stakeholders and these findings are also an opportunity for us to further improve our offering,” said ASC CEO Chris Ninnes.



AquaBounty Technologies says it has received approval from the US Food and Drug Administration (FDA) to raise AquAdvantage Salmon at its land-based contained facility near Albany, Indiana.

The FDA previously approved AquaBounty’s New Animal Drug Application (NADA) on November 19, 2015, for the production, sale, and consumption of AquAdvantage Salmon in the United States. That approval specified that all production facilities for the product would require separate site-specific approvals. To conform with this requirement, the company submitted a supplementary NADA to the FDA requesting approval to grow AquAdvantage Salmon at its farm site near Albany, Indiana.

The Indiana facility as currently configured has a production capacity of 1,200 tons per year and was designed to allow significant expansion.

But while AquaBounty’s Indiana facility is now approved, it cannot proceed with the commercial production of AquAdvantage Salmon until the FDA issues official product-labeling guidelines.

“We still have work to do before we can start production, but we take great pride in this latest accomplishment,” said CEO Ron Stotish.



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