By Dan Burden, Program Coordinator, AgMRC, Iowa State University, djburden@iastate.edu.

Updated October 2010.
 

Overview
For thousands of years, people have harvested the bounties of the sea and also raised its “crops." As demand for fish increases, these farm-raised stocks will become more important to the food supply. The United Nations reports that half of the world's total fish supply now comes from aquaculture. World aquaculture remains the fastest growing food-producing sector, yielding 51.7 million metric tons (MT) with a value of $78.8 billion in 2006, or an annual growth rate of nearly 7 percent. Worldwide, more than 2.9 billion people rely on fish as an important source of animal protein, healthy lipids and essential micronutrients.  (FAO 2009)

Aquaculture is a catch-all term that encompasses the production of what are generally referred to as the commercially important finfish (such as catfish, trout, salmon and tilapia); reptiles (such as turtles, crocodiles and alligators); and mollusks (oysters and clams) and crustaceans (lobsters and crabs). A distinction can be made between “aquaculture” and “mariculture,” or marine aquaculture. Aquaculture systems tend to be pond or confinement systems, and mariculture systems tend to be pen-type enclosures within open bodies of water, usually within the sea.

The Seafood Industry and Aquaculture
Any aquaculture venture must consider the dynamic nature of the overall seafood industry, whether local, regional or international. Future Markets for Aquaculture Products (2008) defines this industry as the most complex and diverse animal protein sector with respect to number of species (at least over 800) and variety of harvest technologies. It is the “most international” of all proteins, and this trade is valued at more than twice the combined trade of all other meat and poultry (FAO 2004). Seafood trade occurs in a highly volatile global marketplace that lacks transparency.

Anderson and Shamshak, authors of the 2008 report cited above, hope that sub-sector growth (for example, aquaculture) will change the industry to one that is more like traditional animal protein sectors (beef and poultry). This will be driven by world-wide demand that is expected to increase from 133 million metric ton (MT) in 1999/2000 to around 183 million MT by 2015 (Delgado et al. 2003).

Aquaculture is expected to provide product for 73 percent or so of this increased demand, with traditional wild-catch fisheries providing the remainder. Product demand also constantly changes, and product diversity in the form of new species (tilapia) and product lines (coatings, flavors, sauces, quick-to-prepare meal offerings) play important roles. Almost all innovative new product offerings are based on the top four aquaculture species, and much of the demand is driven by retail outlets that demand supply stability, consistency and product standardization (NFI 2009). Private sector aquaculture in the United States is seen as a vibrant and innovative industry (Foster and Nash 2008), but one that currently falls far short of meeting national demand. This, however, suggests that there is room for growth in the industry. However, the domestic industry is in competition with global imports of other aquaculture products, which suggests that greater transparency in supply chains and by retailers with respect to origin-of-product, or local or regional production, could go a long way to aid U.S. producers in securing market share.

Additionally, it should be noted that local aquaculture production can have profound economic impact on the surrounding area (for example, catfish production in the southern United States), in the form of job and hard infrastructure creation, technical support and the value addition to other agricultural commodities used for feed in the same way that cattle, hogs and poultry add value to feed grains. The catfish industry stated in a 2002 promotional brochure that the 950 million pounds of feed used in 2001 within one state could be hauled in a train of 4,950 96-ton hopper cars, or a caravan of 19,800 18-wheel 24-ton feed trucks. They calculated that at least 4 acres of grain crops were required to support one acre of food-size fish production.

The 2008 National Oceanic and Atmospheric Administration (NOAA) report, Offshore Aquaculture in the United States: Economic Considerations, Implications & Opportunities, details many more aspects of these markets. The report specifically points out that catfish farming in particular has a major economic impact in areas where it is practiced, particularly in Mississippi. However, U.S. catfish farmers are in competition with foreign catfish and tilapia imports.

Production
U.S. domestic aquaculture production is expanding and is expected to continue to grow as a source of fish, shellfish and mollusks. During the last two decades, the value of U.S. aquacultural production rose to nearly $1.1 billion. Results of the 2007 Census of Agriculture (2009) indicated that sales of fish, shellfish and related products grew by 11.7 percent over the previous five years.

The Census also showed that food fish--including catfish, trout and other food fish--accounted for 60 percent of all aquaculture sales in 2007. Sales of mollusks (scallops and mussels) and crustaceans (shrimp and crayfish) accounted for 21 percent of aquaculture sales. Sport fish accounted for approximately 6 percent of sales. They were followed by ornamental fish, such as koi and tropical fish, at 4 percent and baitfish at 3 percent.

The largest single sector of the U.S. aquaculture industry is catfish, followed by shellfish culture and then trout and other stocking and food fish. A summary of figures from the 2007 Census (2009) is as follows: catfish, $455.4 million; mollusks, $243.0 million; trout, $210.6 million; other stocking and food fish, $187.7 million; and baitfish, 40.3 million.

With sales of more than $229 million in 2007, Mississippi led the nation in catfish sales, followed by Arkansas with sales of nearly $96 million. Washington had the highest sales of mollusks (more than $85 million), while Louisiana had the highest sales of crustaceans (nearly $17 million). Idaho had the highest sales of trout: $53.8 million. Florida was the leading state in ornamental fish sales; their share totaled over $32 million in 2007. Baitfish sales in Arkansas totaled nearly $22 million, the highest of any state.The leading producers of sport fish, according to value, were Pennsylvania (more than $11 million), followed by Arkansas and Washington (both $8.9 million).  (2007 Census of Agriculture 2009)  

Current production takes place mainly on land, in ponds and in coastal waters under state jurisdiction. Recent advances in offshore aquaculture technology have enabled several commercial finfish and shellfish operations to locate in more exposed, open-ocean sites in state waters in Hawaii and New Hampshire.

Preliminary production estimates by NOAA indicate that domestic aquaculture production of all species could increase from about 0.5 million tons annually to 1.5 million tons per year by 2025. The additional production could include 760,000 tons from finfish aquaculture and 245,000 tons from shellfish production.

China remains, by far, the largest producer, with a reported production of 31.4 million MT from aquaculture in 2006. China’s production that year accounted for 67 percent of global production in terms of quantity and 49 percent of global value. (FAO 2009).

Exports
The United States is one of the world's largest seafood exporters. U.S. exports of fishery products in 2008 totaled 1.2 million MT valued at $4.1 billion, equaling an 8 percent decrease in volume but less than a 1 percent decrease in value (FAS).

Exports of fresh and frozen items were valued at $3.2 billion, a small increase in value of $9.9 million compared with 2007. Fresh and frozen exports consisted mainly of salmon valued at $468.9 million and lobster valued at $340.6 million. Exported canned items were valued at $291.2 million. Salmon was the major canned item exported, with a total value of $218.0 million. Exported caviar and roe products were valued at $433.2 million.  (NMFS 2008)

The leading markets for U.S. fishery products in 2008 were (in order by value): Japan, Canada and China (FAS).

Imports
The United States has become a major market for the global aquaculture industry, resulting in an annual seafood trade deficit. U.S. imports of fishery products in 2008 were valued at $14.1 billion, nearly a 4 percent increase in value. The volume of fish imports was 2.3 million MT, a decrease of 1 percent from 2007.  (FAS)

Shrimp imports, which were valued at $4.1 billion, accounted for 29 percent of the value of U.S. seafood imports in 2008. Imports of fresh and frozen salmon were valued at $1.6 billion, a 1.4 percent decrease from the previous year. Imports of canned tuna increased to $661 million, a 26 percent rise. Total seafood imports included fresh and frozen products valued at $12.1 billion and canned products valued at $1.6 billion.  (NMFS 2008)

The top suppliers of fishery products to the United States in 2008 were (in order by value): Canada, China, Thailand and Indonesia (FAS).

Value-added Uses
Aquaculture also includes the production of ornamental fish for the aquarium trade and plant species used in a range of food, pharmaceutical, nutritional and biotechnology products. Related industries such as equipment production, feed and nutrition companies, and aquaculture consulting service firms provide support to the global aquaculture industry.

Trends
In late 2007 and throughout 2008, demand weakened, as countries worldwide experienced economic distress and consumer confidence fell. Like other food prices during this time, the prices of fish products rose, the first time in years that the real prices of fish increased.  (FAO 2009)

Experts say further growth is possible in the production and trade of fish species and products that meet consumers' preference for moderately priced white-meat fillets (FAO 2009).

The U.S. Food and Drug Administration initiated import controls for certain species of farmed seafood from China. The action was in response to numerous cases of contamination. The five species listed were catfish, shrimp, basa (a species similar to catfish), dace (a species similar to carp) and eel.

Legal Considerations
There are various licensing and inspection protocols that vary from state to state. Usually, your state Department of Natural Resources and the Department of Inspection and Appeals should be contacted as soon as possible to determine what permits are needed for your operation (in addition, local zoning, health and other regulations may also apply). For example, the following laws and regulations are taken from those required for producers from one Midwestern state:

• Aquaculture unit license: Needed to operate a hatchery, to engage in the business of propagating fish in private waters or to hold fish for commercial purposes. The state conservation officer in your area must approve the application before a license can be issued. The licensee is allowed to possess, propagate, buy, sell, deal in and transport fish produced from breeding stock lawfully acquired.
• Operators must secure breeding stock from licensed private fish hatcheries in the state or from lawful sources outside the state.
• When purchasing fish, keep the bill of sale that allows possession to spawn, rear and harvest fish. Additionally, anyone bringing fish or fish eggs into the state that are not native must submit an application to the DNR and receive a permit prior to transporting the fish into the state. The DNR may require certification that the source of fish or fish eggs is disease-free.
• Bait dealer's license: required if minnows, frogs, or clams are sold for fish bait. The license also allows the licensee to obtain bait from lakes and streams where permitted.
• NPDES permit: This permit, from the National Pollutant Discharge Elimination System (NPDES), is needed for discharge of “used” water. Generally, only relatively large operations or flow-through hatcheries will need an NPDES permit.
• Water withdrawal permit: This permit is required if withdrawal from a groundwater or surface water source is in excess of 25,000 gallons per day.
• Water storage permit: The permit is needed if natural runoff is captured and stored (e.g., a dam across a waterway) and the permanent storage is in excess of 18 acre feet.
• Well construction permit: This permit is required prior to construction of new water wells.
• Floodplain development permit: This permit may be needed if a fish farm is constructed on the flood plain of a stream or if a dam is constructed across a waterway or stream.
• Processing plant permit to operate a packing plant or slaughterhouse where fish are killed or dressed for food.  

• Alaska Mariculture, Alaskan Department of Fish and Game - Alaska state mariculture site includes razor clam restoration information, permit information, overviews of state production and related information.
• Anderson J. and G. Shamshak, Future Markets for Aquaculture Products, Chapter 11 in Offshore Aquaculture in the United States: Economic Considerations, Implications & Opportunities, NOAA, 2008.
• Aquaculture, Economic Research Service (ERS), USDA.
• Aquaculture Program, National Oceanic and Atmospheric Administration (NOAA) - Provides fisheries market news and statistic summaries (aquaculture results by catch, available grants, new marine product food safety guidelines, endangered natural stocks, export guidelines for shipments to the European Union, links and addresses of many National Marine Fisheries Support Offices, and other information. Site includes information on Department of Commerce Aquaculture Policy, the National Aquaculture Act of 1980, recent NOAA Aquaculture Policy and breaking research and legislative news.
• Aquaculture Sold: 2007 and 2002, 2007 Census of Agriculture, NASS, USDA, 2009.
• Delgado, C.L., N. Wada, M.W. Rosegrant, S. Meijer and M. Ahmed, Fish to 2020: Supply and Demand in Changing Global Markets, International Food Policy Research Institute (IFPRI), 2003.
• Foster, J. and C. Nash, Current Status of Aquaculture in the United States, Chapter 10 in Offshore Aquaculture in the United States: Economic Considerations, Implications & Opportunities, NOAA, 2008.
• Global Ag Trade System, FASonline, USDA.
• Import and Exports of Fishery Products 2010, Fishery Statistics Division, National Marine Fisheries Service (NMFS), 2011.
• The State of World Fisheries and Aquaculture 2010: Facing challenges and seizing opportunities, FAO Fisheries and Aquaculture Department, UN, January 2011.
• The State of World Fisheries and Aquaculture 2008, FAO Fisheries and Aquaculture Department, UN, 2009.
• Top 10 Consumed Seafood, National Fisheries Institute,aboutseafood.com, 2009 - Lists the top ten species consumed in the United States by pounds per person.
   

Links checked May 2010.