Bauer 1983 Aquacultural-Engineering

7/28/2019 Bauer 1983 Aquacultural-Engineering

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A q u a c u l t u r a l E n g i n e e r in g 2 (1983) 181-201

E c o n o m i c F e a s i b i l i ty o f P r a w n M a cr o br a ch i u mP r o d u c t i o n i n S o u t h C a r o l i n a , U S A

Lar ry L . Bau e rDepartment of Agricultural Economics, Clemson University, Clemson,

South Carolina 29631, USAan d

P a u l A . S a n d i f e r, T h e o d o r e I. J. S m i t h an d W a l la c e E . J e n k i n sMarine Resources Research Institute, PO Box 12559, Charleston,

South Carolina 29412, USA

A B S T R A C TC o s t s a n d r e t u r n s w e r e e s t i m a t e d f o r f r e s h w a t e r p r a w n Macrobrachiumrosenbergii f a rm ing as a supp lem en ta l en t e rpr i se i n Sou th Caro lina inr e la t io n t o t h e f o l l o w i n g f a c t o r s: { 1 ) e x i s ti n g v e r s u s n e w i n v e s t m e n t f o rponds and wa ter supp ly ; (2 ) t h ree s tock ing s t ra t eg i e s (pos t la rvae a lone ,a 5 0 : 5 0 m i x t u r e o f p o s t la r v a e a n d n u r s e d j u v e n i l e s a n d n u r s e d ] u v e n il e sa lone ) a t var ious dens i t i e s {2 .15 -8 .61 praw ns m -2) ; {3 ) a range o f p r i cesf o r s e e d s t o c k ( $ 0 - 5 0 p e r th o u s a n d ) ; a n d { 4 ) t w o m a r k e t i n g a l te r n a ti v e s{ sa le o f p ro du c t a s shr im p ta il s on l y or w i th t he la rge an im al s m ark e t edheads -on and th e re s t a s ta il s) . N e t r even ue e s t im a tes i nd i ca t e t ha t p rawna q u a c u l tu r e h a s p o t e n t i a l t o b e c o m e a s o u r ce o f s u p p l e m e n t a l i n c o m e t ofarm ers i n the coas ta l p la in area o f Sou t h Caro lina an d throu gho u t m uc ho f t he sou theas t e rn U n i t ed S ta t e s . Th i s i s e spec ia l ly l ike l y i f t he en t e rpr i secan u t i l i z e ex i s t i ng pon d fac i l i t i e s t ha t a re a l ready d i sc oun ted in to t hev a lu e o f t h e l a n d o r w e r e c o n s t r u c t e d d u r i n g a p e r i o d o f l o w e r i n v e s t m e n tcos ts . A praw n far m i s un l i k e l y t o be pro f i t ab l e i f pos t la rvae a lone ares tocke d , even in ex i s t i ng fac i l it i e s , bu t i f a m ix tur e o f pos t la rvae andfuven i l e s o r iuven i l e s a lone are s to cke d in ex i s t ing fac i li t ie s , p ro f i t ab i l i t yi s l i k e l y a t s e e d c o s t s u p t o a b o u t $ 4 0 p e r t h o u sa n d .

181A quacu l tura l Eng ineer ing 0144-8609/83/$03.00- Applied Science PublishersLtd, England, 1983. Printed in Great Britain


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182 L. L. Bauer, P. A. Sandifer , T. L J . Smi th, W. E. Jen kin sINTRODUCTION

The feasibility of freshwater prawn M a c r o b r a c h i u m r o s e n b e r g i i farmingas a source of supplemental income for farmers in South Carolina hasbeen under investigation for a number of years (Smith e t a l . , 1976,1978, 1981; Sandifer and Smith, 1979; Sandifer e t a l . , 1982). Inconcept, this aquaculture activity would be incorporated into existingagricultural operations where certain types of facilities, equipment andlabor would be available for seasonal use in prawn culture.

An earlier economic analysis determined cost and revenue estimatesfor prawn farming in South Carolina based on data obtained fromresearch ponds in 1976 and 1977. This study identified major costcenters (Roberts and Bauer, 1978). However, more recent researchhas resulted in increased production levels, reduced requirementsfor seed stock, improved feed utilization, reduced labor require-ments and other findings of economic importance. These results,coupled with high inflation rates, indicate a need to re-examine theeconomic potential for prawn fanning in South Carolina. The scopeand utility of this analysis was expanded by calculating returns to riskand management in relation to the following factors: (1) differentstocking strategies (i.e. population densities and size at stocking);(2) two investment possibilities (use of existing facilities as againstconstruction of new ones); (3) a range of prices for seed stock ($0-50per thousand); and (4) two marketing alternatives (sale of product asshrimp tails only or with large animals sold as a heads-on gourmetproduct and the remainder of the crop as tails). This paper provides anupdated analysis of the potential for prawn farming as an agriculturaloption in South Carolina. Such data also should be applicable tomuch of the southeastern United States and other areas with similarclimates.

PROCEDURESThe cost and return estimates are based on the results of replicatedpond rearing trials conducted by staff of South Carolina's MarineResources Research Institute (Smith e t a l . , 1981). These trials, whichranged in dura tion from 144-168 days, determined yields associatedwith stocking densities of 2.15-8.61 prawns per square metre of pond


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Economic feasibility o f prawn in Sou th Carolina 18 3surface area (21 500- 86 100 prawns ha -a) and differ ences in initialmean sizes of the stocking populations. The ponds were stocked eitherwith postlarvae (arbitrarily defined to be ~0.1 g mean weight and~< 18 mm (eye or bit to tel son)i in length), nurs ery-reared juveniles (> 0.1~< 0-4 g weight and > 18 ~< 28 mm in length), or 50 :50 mixtu res ofpostqarvae and juveniles. To simplify comparisons, the same range ofcosts were used for all seed stock options, although it is obvious thatlarger animals would cost more than smaller ones.

The economi c estimates were generated for a hypot heti cal produc-tio n u nit (farm) consisting of ten 0.4 ha ponds. Such an enterprisewas considered strictly as a supplemental source of income to farmersin the coastal plane area of South Carolina, and we assumed that theland and necessary items of farm equipment, such as tractors, trucks,etc., would be available. Fixed costs were estimated for two situations:(1) as a new investment where ponds have to be constructed and awater source provided, and (2) where pond facilities and a water sourcealready exist, though some renovation work m ay be necessary.

RESULTS AND DISCUSSIONAnnual fixed costsAnnual fixed costs are associated with items of fixed investment, suchas ponds, wells, equip men t, etc., and are ind epe ndent of the level ofproduction. The total investment beyond what would normally exist ona coastal farm in South Carolina is estimated for the 10-pond unit,assuming the ponds and a well have to be constructed in one situation,and that the facilities already exist in the other case. This investment isthen prorated over time and the resulting cost expressed on a per pondbasis.N e w in v e s tme n t

Ponds. The cost of pond construction was based on discussions withpersonnel of the Soil Conservation Service, US Department of Agri-culture. It is assumed that the ponds are to be constructed onreasonably level ground and that the levees are sloped at a rate of2.5 : 1 wit h 0.3 1 m f reeb oard . It is also assumed t hat the p onds have anaverage dep th of 1.15 m and t ha t the levee top s are 2.4 m or 3.7 m


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184 L. L. Bau er , P. A . S andi fer , T . I . J . Sm i th , W. E. Jen kin swide, depending on whether that particular levee is used as a roadway.Using these specifications, it was estimated that approximately20 000 m 3 wou ld need to be moved at a cost o f $1.30 m -3. The esti-mat ed cost of c onst ruct ing the ten 0.4 ha po nds is $ 26 000 (Table 1 ).

The construction of ponds is a capital improvement, and the USInternal Revenue Service will not allow its investment to be deprecia-ted since the ponds add to the value of the property. With this con-sideration, the cost of the pond construction was amortized over 20years at 12% intere st. Since the capital is assumed to be recoverable, theannual charge is an average of the interest paid over the 20-year periodor $218.0 9 po nd -1 (Table 1).

H a r v e s t b a s i n a n d d r a i n : Climatic conditions in South Carolina aresuch that the prawns will have to be batch-harvested, i.e. the pond

T A B L E 1Estimated Initial Investment for all New Facilities for a Ten-pondProduction Unit and Estimated Annual Fixed Costs per 0-4 haPond for Macrobrach i um Production in South Carolina

I t e m T o t a l i n it ia l A n n u a l f i x e di n v e s tm e n t ( $ ) c o s t p o n d - 1 ( $ )

PondsPond construction 26 000 218.09Harvest basin and drain 3 550 47.33Crushed limestone 780 11.70Vegetation cover 300 4.50Well and equipmentWell 25 000 250.00Pump 5 000 66.67Pipe 1 840 24.53Seines 396 9.90Instruments 500 12.50Feeder 1 300 19.50Feed storage 1 900 28.50Aerators 2 800 42.00Land - 38.75Total $69 366 $773.97


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Econ omic feasibility of prawn in Sou th Carolina 185completely drained and the animals taken from a harvest basin con-structed outside the pond. To reduce initial investment costs, eachharvest basin would be shared by two ponds. Each basin is assumed tobe 2.4 3.0X 0.9 m deep with 0.1 m thick walls and receives a 0.2mdiameter pipe from each pond. The total estimated cost for these fivebasins is $3550 to serve the 10 ponds. The useful life is estimated to be12 years, so straight line depreciation with no salvage value is used forthat period. This amounts to $29.58 per pond per year. Since thecapital is invested in a M a c r o b r a c h i u r n enterprise, it is not available toearn a return in an alternative investment so an interest charge is alsomade. Assuming a 10% alternative return, and estimating averageinvestment as one-half the initial investment, the interest charge is$17.75 per pond per year. The total of these two items is $47.33 andrepresents the annual fixed cost of the harvest basin and drain.

L e v e e s t a b i l i z a t i o n . The levees need to be seeded and the roadwaysgraveled. The total area to be seeded is 0.8 ha. The cost for seeding thisarea would be $300, based on Clemson University Extension Service'sestimate of $370 h a -1 to establish rescue pasture. When the $300 costis prorated over 10 years and a 10% interest charge added, the annualcharge per pond is $4.50. Approximately 118 tonnes of crusted lime-stone would be needed to gravel the roadways. A trucking firm inCharlston, South Carolina, indicated that the cost for limestone wouldbe $6.61 ton ne -1 delivered from 64 km away (it is assumed that thefarm would be no fur the r t han 64 km from a source of road gravel).Total cost for limestone gravel would be $780. When this cost isprorated over an estimated life of 10 years and a 10% interest chargeon the average investment added, the annual charge is $11.70 per0.4 ha pond.

Well: A well capable of providing 26 50 litres min -1 is cons ider ed tobe necessary to service all the culture ponds. The cost of well drilling isvery site specific so estimates were obtained from several commercialdrillers. Based on these, a general estimate of $25 000 is determined.When this cost is depreciated over 20 years and a 10% interest chargeadded , the e stimated annual cost is $250 pond -1

P u m p . A 40 h.p. pum p would be necessary to deliver the desiredcapac ity of 2650 litres min -~ and wou ld cost a ppr oximat ely $5000.This is depreciated over 12 years, with no salvage value, and a 10%interest charge added, yielding an estimat ed annual charge for the pum pof $66.67 pon d -1.


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186 L. L. Bauer, P. A. Sandifer, T. L J. Smith, W. E. JenkinsPipe: A p p r o x i m a t e l y 2 4 4 m o f t h e 15 c m p i p e w o u l d b e n e e d e d f o r

w a t e r d i s t r i b u t i o n . A t a p r i c e o f $ 7 . 5 4 m -1 t h e e s t i m a t e d t o t a l c o s t i s$ 1 8 4 0 . T h i s i s d e p r e c i a t e d o v e r 1 2 y e a r s a n d a 1 0 % i n t e r e s t c h a r g ea d d e d t o e s t i m a t e t h e a n n u a l f i x e d c o s t o f $ 2 4 . 5 3 p e r p o n d .

Seines: T w o 3 0 X 2 m d e e p s e in e s w o u l d b e n e c e s s a r y , o n e o f 0 . 6 4a n d t h e o t h e r o f 1 .3 c m s t r e t c h m e s h . C o s t e s t i m a t e s o f $ 2 2 0 a n d$ 1 7 6 a r e o b t a i n e d f o r t h e s m a l l e r a n d l a rg e r s e i n es , r e s p e c t i v e l y , g iv in ga t o t a l c o s t o f $ 3 9 6 . T h e s e in e s a r e d e p r e c i a t e d o v e r f iv e y e a r s a n d a1 0% i n t e r e s t c h a r g e is a d d e d , y i e l d i n g a n e s t i m a t e d a n n u a l c o s t o f$ 9 . 9 0 p o n d -1.

Instruments: T h e e s t i m a t e d t o t a l c o s t o f w a t e r q u a l i ty i n s t r u m e n t st o m o n i t o r t e m p e r a t u r e , p H , d i s s o lv e d o x y g e n , e t c . , is $ 5 0 0 . T h i s c o s tis d e p r e c i a t e d o v e r f i v e y e a r s a n d a 1 0 % i n t e r e s t c h a r g e o n t h e a v er a g ei n v e s t m e n t a d d e d t o o b t a i n a n e s ti m a t e d a n n u a l c o s t o f $ 1 2 . 5 0 p o n d -1 .

Feeder: A P T O - d r iv e n f e e d e r w i t h 7 2 5 k g c a p a c i t y w i ll b e u s e d t of e e d t h e p r a w n s . I t s e s t i m a t e d c o s t o f $ 1 3 0 0 i s d e p r e c i a t e d o v e r 1 0y e a r s w i t h a 1 0 % i n t e r e s t c h a r g e a d d e d , r e s u l t in g i n a n e s t i m a t e d a n n u a lc o s t o f $ 1 9 . 5 0 p o n d -1.

Storage." S t o r a g e s p a c e f o r 9 t o n n e s o f f e e d w i ll b e r e q u i r e d a t a ne s t i m a t e d c o s t o f $ 1 9 0 0 . T h e s t o r a g e u n i t is e l e v a t e d s o t h e fe e d e r c a nb e l o a d e d b y g r a v i t y . T h e i n i ti a l c o s t is d e p r e c i a t e d o v e r 1 0 y e a r s a n d1 0 % i n t e r e s t o n a v e ra g e i n v e s t m e n t a d d e d t o e s t i m a t e t h e a n n u a l c h a rg eo f $ 2 8 . 5 0 p o n d -1.

Aerators: L o w o x y g e n l ev e ls c a n b e a s e r io u s p r o b l e m i n t h e p o n dc u l t u r e o f Macrobrachium. T h u s , a s a p r e c a u t i o n , t h e c o s t f o r t w op a d d l e - w h e e l t y p e a e r a t o r s is i n c l u d e d . T h e s e o p e r a t e o f f t h e P T O o f at r a c t o r a n d a re v e r y e f f i c ie n t i n a d d i ng o x y g e n t o w a t e r . T h e c o s t is$ 1 4 0 0 u n i t -1 , b u t t h e y c o u l d b e b u i l t o n t h e f a r m a t a m u c h l o w e rc o s t . A 5 5 - 6 0 h . p . t r a c t o r is n e c e s s a r y t o r u n a n a e r a t o r . S i n c e th e n e e df o r a e r a t io n is n o t e x p e c t e d t o b e c o n t i n u o u s , t h e a e r a t o r s a red e p r e c i a t e d o v e r 1 0 y e a r s . W h e n a 1 0% i n t e r e s t c h a r g e o n t h e a v e ra g ei n v e s t m e n t is a d d e d , t h e a n n u a l f i x e d c h a rg e i s $ 4 2 . 0 0 p o n d -a .

Land: I t i s a s s u m e d t h a t t h e l a n d i s a l r e a d y o w n e d , s o t h e c h a rg em a d e i s t h e o p p o r t u n i t y c o s t o f n o t r e n t in g t h e l a n d . A r e p r e s e n t a t iv er e n t a l r a t e f o r a g r i c u l t u r a l l a n d i n S o u t h C a r o l i n a i n 1 9 8 0 w a s $ 6 1 . 7 5h a - 1, i n c l u d i n g t a x e s a n d i n s u r a n c e . I t i s a s s u m e d a t o t a l l a n d a r e a o f6 . 3 h a i s n e e d e d t o c o n s t r u c t t h e 1 0 p o n d s , a c c e s s r o a d s , l e v e e s, e t c .T h e r e f o r e , t h e t o t a l la n d c h a rg e is $ 3 8 7 . 5 0 o r $ 3 8 . 7 5 p e r p o n d p e ry e a r .


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Ec ono mi c f eas i b i li t y o f p raw n in Sou t h C aro li na 187O t h e r : Other necessary items such as a tractor and a truck are

assumed to be available, since it is assumed that the M a c r o b r a c h i u moperation will be a supplementary activity for people already engagedin fanning. Use costs for such items are charged under variable costs.

T o t a l . The total inv estment needed to co nstr uct new facilities wasestimated to be $69 366 for a hypothetical 10-pond farm. This amountsto an average fixed cost o f $7 74 per pon d per yea r (Table 1 ).

E x i s t i n g f a c i l i t ie sThe initial investment requirement may be substantially reduced insituations in which M a c r o b r a c h i u m are produced on farms where pondsand a source of water already exist. Therefore, investment and annualfixed costs for such a situation are also estimated (Table 2). It isassumed the initial investment in the ponds has been paid and dis-

T A B L E 2Estimated Initial Investment with Existing Facilities for a Ten-pond Production Unit and Estimated Annual Fixed Costs per

0.4 ha Pond for Macrobrach i um production in South CarolinaI t e m T o t a l i n it ia l A n n u a l f i x e d

i nves t men t ($ ) cos t po nd -1 ($ )PondsCrushed limestone 780 11.70

Vegetation cover 300 4.50Water distribution equipment

Pump 5 000 66.67Pipe 1 840 24.53

Seines 396 9.90Instruments 500 12.50Feeder 1 300 19.50Feed storage 1 900 28.50Aerators 2 800 42.00Land - 38.75Total $14 816 $258.55


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188 L .L . Bauer , P . A . Sand i f e r , T . L J . Sm i th , W . E . J en k in sc o u n t e d i n t o t h e v a l u e o f t h e la n d , b u t a n e w p u m p a n d d i s tr i b u t io np i p e w i l l b e n e e d e d t o u p d a t e t h e f a c il it ie s . T h e c o s t s o f le v e e s t ab i li z a -t i o n a r e i n c l u d e d s i n c e t h e s e w i ll b e r e c u r r in g . O t h e r c o s t s a r e t h e s a m ea s d e s c r i b e d a b o v e .V a r i a b l e c o s t sV a r i a b l e c o s t s in c l u d e t h o s e i t e m s w h i c h v a r y w i t h t h e le v el o f o u t p u t ,e .g . la b o r , f e r t il i z e r , e t c . T h e s e a r e p r e s e n t e d i n T a b l e 3 f o r a ll i t e m se x c e p t f e e d a n d s e e d s t o c k , w h i c h a r e t r e a t e d s e p a r a t e l y .

L a b o r : L a b o r r e q u i r e m e n t s w e r e e s t i m a t e d f r o m e x p e r i e n c e w i t he x p e r i m e n t a l p o n d s . T h e s e e s t i m a t e s f o r a 1 6 5 - d a y g r o w i n g s e a s o n a r ea s f o l l o w s :

T/meF u n c t i o n ( m a n h o u r s p e r p o n d )

S t o c k i n g 2 . 0W a t e r q u a l i t y a n a l y si s 1 3 .0F e e d i n g 2 4- 5M a n a g e m e n t a n d a e r a t io n 4 .5M a i n t e n a n c e 3 . 5H a r v e s t i n g 1 6 . 5F e r t i l i z i n g a n d l i m i n g 3 - 0H e a d i n g a n d g r a d in g 1 0 .0T o t a l p e r p o n d p e r y e a r 7 7 . 0

A t a w a g e r a t e o f $ 3 . 5 0 h -1 , t h e e s t i m a t e d c o s t o f l a b o r is $ 2 6 9 . 5 0p o n d - a.

F e r t i l i z e r : F e r t i l iz e r is a p p l i e d t o i n d u c e a p h y t o p l a n k t o n b l o o mw h e n t h e p o n d s a r e f i l l e d e a c h s p r i n g . U s u a l l y a 2 0 - 2 0 - 5 f e r t i l i z e r i sa p p l i e d a t a n a v e ra g e r a t e o f 4 5 . 4 k g p e r 0 . 4 h a p o n d . A t a p r i c e o f$ 0 . 1 4 3 kg -1, t h e t o t a l c o s t i s $ 6 . 5 0 pon d -1.

L i m e : B e c a u s e s o i l s i n S o u t h C a r o l i n a a r e u s u a l l y a c i d , i t i s o f t e nn e c e s s a ry t o a p p l y a b o u t 6 8 0 kg o f li m e p e r 0 . 4 h a p o n d j u s t p r io r tof il li n g. A t a c o s t o f $ 0 . 0 4 4 k g -1 o f li m e , t h e a n n u a l c o s t is a p p r o x i -m a t e l y $ 3 0 p o n d -1.

F e e d : A f e e d c o n v e r s i o n r a te o f 1 : 1 ( f e e d : p r a w n b i o m a s s ) is c o n -s i d e r e d a t t a i n a b l e b a s e d o n r e s e a r c h r e s u l t s ( S m i t h e t a l . , 1 9 8 1 ; S a n d i f e re t a l . , 1 9 8 2 ) . T h e e s t i m a t e d f e e d c o s t s f o r t h e n i n e s t o c k i n g s t ra t e g ie s


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E c o n o m i c f e a s i b i li t y o f p r a w n i n S o u t h C a ro li na 189T A B L E 3Estimated Annual Variable Costs per 0.4 haPond for M a c r o b r a e h i u m Production in

South CarolinaI t e m a $ p o n d - 1

Labor 269.50Fertilizer 6.50Lime 30.00Electricity 62.40Ice 5.00Tranportation 15.00Tractor 147.25Truck 85.47Repair and maintenance 138.73Miscellaneous 50.00Interest on operating capital 21.96Total $831.81a Seed stock and feed costs are not includedbut are treated separately.

considered are presented in Table 4. It is assumed that Ralston PurinaMarine R at ion 25, supplied at a cost o f $0.48 kg -a, is used.

E l e c t r i c i t y . It is assumed that water is supplied by a 40 h.p. electricpump and that the ponds must be filled at the beginning of the growingseason. Hydrological records indicate that seasonal evaporation willexceed precipitation on average, so the evaporative loss, plus water lostby seepage, will have to be replaced. These two factors are estimated toaccount for a water loss of 26 cm from each pond over the growingseason. In addition, an amount of water equal to 25% of the totalvolume replaced is assumed to be necessary for flushing the ponds toremove undesirable algae or to improve water quality. Using theseestimate s, 1300 kWh w ould be need ed f or filling each pond, replacingevaporative and seepage losses, and flushing. An electric company inthe coastal area of the state has a farm rate of $0.048 kWh-a; therefore,the est imated cost of electricity to run the p ump is $62.40 pond -a.


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190 L. L. Bauer, P. A. Sandifer, T. L J. Sm ith, W. E. Jen kin sTABLE 4

Estimated feed costs ($0 .48 kg -1 ) for Nine Pra wn StockingStrategies

Stocld ng strategy Fee d Cost( k g p o n d -1 ) ( $ p o n d - l )Postlarvae (no . m -2)

2 .15 135 64.804.31 236 113.286 .46 344 165 .12

P o ~ lar v ae an d ju v en f l e s ( n o .m -2 )2 .15 163 78.244.31 276 132.486-46 494 237 .12

Juveniles (no . rn -2)4 .31 408 195.846 .46 495 237 .608.61 539 258.72

I c e : A p p r o x i m a t e l y 1 35 k g o f i ce w i ll b e n e e d e d p e r p o n d f o r o n -f a r m p r o c e s s i n g . T h e e s t i m a t e d c o s t f o r i ce , i n c lu d i n g t r u c k t r a n s p o r t a -t i o n o v e r a d i s t a n c e o f 5 0 - 6 0 k m , is $ 5 .0 0 p o n d -1 .

T r a n s p o r t a t i o n : T h e c o s t o f t r a n s p o r t i n g t h e p r a w n c r o p w i ll d e p e n do n e a c h f a r m s i t u a t i o n . A c o s t o f $ 1 5 p o n d -1 i s i n c l u d e d h e r e a s ar o u g h e s t i m a t e , b a s e d o n a t r a n s p o r t a t i o n d i s t a n c e o f 50 k m .

Tractors ." I t is a s s u m e d t h a t a 5 5 h . p . t r a c t o r w i l l b e u s e d f o r a t o t a lo f 2 5 h p o n d -1 f o r f e e d i n g , p o w e r i n g a e r a t o r s, a n d o t h e r m i s c e l l a n e o u sa c t iv i ti e s. E x t e n s i o n e c o n o m i s t s at C l e m s o n U n i v e r s i t y h a v e e s t i m a t e dt h e c o s t o f t r a c t o r u s e , i n c lu d i n g b o t h f i x e d a n d v a r ia b l e co s t s , t o b e$ 5 . 8 9 h -1. T h e t o t a l a n n u a l c o s t is t h e r e f o r e e s t i m a t e d t o b e $ 1 4 7 . 2 5p o n d -~.

T r u c k . I t i s a s s u m e d t h a t a -t on p i c k - u p t r u c k i s u s e d 1 h d a y -1d u r i n g t h e 1 6 5 - d a y g r o w i n g s e a s o n i n c o n n e c t i o n w i t h t h e M a c r o -b r a c h i u m e n t e r p r i s e . T h e e s t i m a t e d o w n e r s h i p c o s t i s $ 5 . 1 8 h -1 . T h e r e -f o r e , th e e s t i m a t e d a n n u a l c o s t is $ 8 5 . 4 7 p o n d -1.

M a i n t e n a n c e a n d r e p a i r : A c o m m o n l y u s e d e s t i m a t e o f t h e c os t o fr e p ai rs a n d m a i n t e n a n c e is 2 % o f i n v e s t m e n t . G i v e n t h e e s t i m a t e d


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E c o n o m i c fe a s i b i l it y o f p r a w n in S o u t h C a ro lin aT A B L E 5Prices for Prawns Used in Calcula t ing Est im ated Reven ues

191

M arke t ca t egory S i ze c la s s P r i cea A v e r a g e p r i c e(no . kg -1 ) ($ kg -1 ) ($ kg -1 )Whole prawns

SmallM e d i u mLarge

Tails onlyPet i te

Small

Med ium

LargeJ u m b o

23- 33 7.71 7.7118-22 8 .82 8 .82

< 18 9 .92 9 .92> 1 9 7 3 . 0 0

1 7 7 - 1 9 7 3 . 0 0 ] 3 . 2 0155-1 76 3 .61 J133-154 4 .28 I122-132 4 .96 ] 4 .891 1 1 - 1 2 1 5.42J100-110 6 .02 I89 -99 6 .19 ] 6 .35

7 8 - 8 8 6 . 8 1 !67-77 7 .87~56-66 ' 8 .58 / 8 .224 5 - 5 5 9 . 3 2 I34 -4 4 10 .14 ] 10 .1424-33 10 .97J

a Pr ices for w hole prawn s a re based on pr ices repor te dly rece ived by fa rm sma rke t ing in Flor ida , Hawaii and Pu er to Rico . Prices for ta i ls a re averageex-vesse l pr ices rece ived in So uth Carol ina dur ing 1978 -80 a t t ime o f po ndharvest (October) .

i n v e s t m e n t o f $ 6 9 3 6 6 ( T a b l e 1) f o r n e w f a c il i t ie s , t h e e s t i m a t e d a n n u a lc o s t is $ 1 3 8 . 7 3 p o n d -1. T h i s e s t i m a t e is u s e d h e r e f o r b o t h i n v e s t m e n ts i t u a t i o n s .

M i s c e l l a n e o u s . " A m i s c e l l a n e o u s c h a r g e o f $ 5 0 p o n d -1 is i n c l u d e d t oa c c o u n t f o r s m a l l m i s c e l l a n e o u s i t e m s ( e .g . b u c k e t s , h o s e s , e tc . ) .

I n t e r e s t o n o p e r a t i n g c a p i t a l: T h e t o t a l o f t h e v a ri a b l e c o s t i t e m sd i s cu s s ed t h u s f a r a m o u n t t o $ 8 0 9 . 8 5 . S i nc e t h e e n t i re a m o u n t i s n o t


12/21

1 9 2 L . L . Baue r , P . A . Sand i f er , T . I . J . Sm i t h , W. E . Jenk in s

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13/21

Economic feasibility o/prawn in South Carolina 193

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194 L. L. Bauer, P. A. Sandifer, T. L J. Smith , W. E. Jenkinsi n v e s t e d a t t h e b e g i n n i n g o f t h e s e a s o n , th i s s u m is d i v i d e d b y t w o t oa p p r o x i m a t e t h e a v e ra g e i n v e s t m e n t d u r i n g t h e s e a so n . A t an a n n u a li n t e r e s t r a t e o f 1 2% f o r 1 6 5 d a y s , t h e t o t a l c h a r g e f o r i n t e r e s t o no p e r a t i n g c a p i t a l is $ 2 1 . 9 6 p o n d -1 .

Total: T h e e s t i m a t e d t o t a l o f a ll a n n u a l v a r ia b l e c os t s , e x c l u d i n g t h ec o s t o f s e e d s t o c k a n d f e e d , i s $ 8 3 1 . 8 1 p o n d -1.

E s t i m a t e d r e v e n u eGross revenueE s t i m a t e d g r os s re v e n u e is c a l c u l a t e d a s su m i n g t w o d i f f e r e n t m a r k e t i n gs t r a t e g i e s :

1 . A l l p r a w n s b e h e a d e d a n d t h e t a i ls s o l d a t l o c a l e x - v e s se l p r i c e s f o rm a r i n e s h r i m p . W o r k b y L i a o a n d S m i t h ( 1 9 8 0 ) i n d i c a te s t h a tp r a w n s s h o u l d r e c e iv e p r ic e s c o m p a r a b l e t o t h o s e r e c e i v e d fo rP e n a e i d s h r i m p .

2 . L a r g e r ( ~ 3 0 g ) p r a w n s s o l d w h o l e , a n d s m a l l e r p r a w n s b e h e a d e da n d s o l d a s t a i l s a s a b o v e .

T h e p r i c e s u s e d f o r c a l c u l a ti n g r e v e n u e a r e p r e s e n t e d i n T a b l e 5 , a n dt h e p r o d u c t i o n d a t a f o r t h e n i n e s t o c k i n g s t r a te g i e s a re g iv e n i n T a b l e 6 .Net revenueT h e e s t i m a t e d n e t r e v e n u e p e r p o n d f o r b o t h m a r k e t in g s tr a te g ie s a n dt h e n i n e s t o c k i n g s t r a te g i e s w e r e c a l c u l a t e d f o r th e t w o i n v e s t m e n ta l t e rn a t iv e s . T h o s e f o r t h e s i t u a t i o n w h e r e i n v e s t m e n t is r e q u i r e d f o rn e w p o n d s a n d a w e l l a r e p r e s e n t e d i n T a b l e s 7 - 9 . T h e e s t i m a t e s f o r t h es i t u a t i o n w h e r e f a c i li t ie s a re a l r e a d y a v a i l ab l e a re p r e s e n t e d i n T a b l e s1 0 - 1 2 . B e c a u s e a n o p p o r t u n i t y c o s t o n a ll f a c t o r s is i n c l u d e d , a n e tr e v e n u e o f z e ro w o u l d r e p r e s e n t a t r u e b r e a k d o w n p o i n t s in c e al l i n p u t sw o u l d b e r e c e i v in g a r e tu r n .

T h e e s t i m a t e s o f n e t r e v e n u e i n d i c a t e t h a t p r a w n f a rm i n g is l es sl i ke l y t o b e e c o n o m i c a l l y f e a si b le i f n e w p o n d s h a v e t o b e c o n s t r u c t e da n d n o w a t e r s u p p l y is av a il a bl e . H o w e v e r , w h e n s e e d s t o c k is a v a il a b lea t l o w c o s t ( ~ $ 1 0 p e r t h o u s a n d ) a n d p o s t - la r v a e a n d j u v e n i l e s o rj u v e n i l e s a l o n e a r e s t o c k e d , t h e r e is a p r o j e c t e d p r o f i t a t c e r ta i nd e n s i ti e s i f t h e l a rg e p r a w n s a r e m a r k e t e d w h o l e a n d t h e s m a l le r o n e s ast a il s ( T a b l e s 7 - 9 ) . T h e p o t e n t i a l f o r p r o f i t is g r e a t e r i f e x i s t i n g fa c i l it i e s


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E c o n o m i c fe a s i b i l it y o f p r a w n i n S o u t h C a ro lin aT A B L E 7Estimated Net Revenue for Postlarval Prawns Stocked in a New Facilityas a Function of Stocking Density, Seed Cost, and Marketing Strategy

195

S e e d s t o c k p r ic e( $ p e r t h o u s a n d )

S t o c k i n g r a te( n o . m - 2 )

M a r k e t i n g s t r a t e g yTai ls W hole an d ta i ls{ $ p o n d - 1) ( $ p o n d - 1)

0 2.15 --1202.67 --951.414.31 --1088.74 --1003.006.46 --767.87 --499.6110 2.15 --1288.67 --1037.414.31 --1261.14 --1175.406.46 --1026.27 -758.0120 2.15 --1374.67 --1123.414.31 --1433.54 --1347.806.46 --1284.67 --1016.4130 2.15 --1460.67 --1209.414.31 --1605.94 --1520.206-46 --1543.07 --1274.8140 2.15 --1546.67 --1295.414.31 --1778.34 --1692.606.46 --1801.47 --1533.2150 2.15 --1632.67 --1381.414-31 --1950.74 --1865.006.46 --2059.87 --1791.61

(i.e. ponds, water supply, etc.) are utilized for prawn farming. Neverthe-less, it still would be i mpo rta nt t hat the cost of seed stock be relativelylow (~< $30 per tho usa nd) and tha t postlarvae and juveniles or juvenilesalone be stocked (Tables 10-12).

As indicated by previous studies, stocking newly met amor phos edpost-larvae alone is unlikely to produce a profitable crop in SouthCarolina (Sandifer and Smi th, 1979; Sandifer e t a l . , 1982).The cost of seed stock is one of the major controlling factors affect-ing economic feasibility. If seed costs could be reduced, either through


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196 L . L . B auer , P . A . Sand i f e r , T . L J . Sm i t h , W . E . J e nk i n sT A B L E 8

E s t i m a t e d N e t R e v e n u e f o r a M i x t u r e o f P o s t la r v a l a n d Ju v e n i l e P r a w n sS t o c k e d i n a N e w F a c i l i ty a s a F u n c t i o n o f S t o c k i n g D e n s i t y , S e ed C o s t

a n d M a r k e t i n g S t r a t e g yS e e d s t o c k p r i ce S t o c k i n g r a te( $ p e r t h o u s a n d ) ( n o . m - 2)

M a r k e t i n g s t r e t e g yTai ls W hole an d ta il s( $ p o n d - 1) ( $ p o n d -1 )

0 2 .1 5 - - 1 1 1 1 . 9 5 - - 8 2 4 . 0 84 -3 1 - - 8 5 3 . 9 6 - - 6 0 8 . 4 76 -46 - - 190 .88 606 .601 0 2 . 1 5 - - 1 1 9 7 . 9 5 - - 9 1 0 . 0 84 . 31 - - 1 0 2 6 . 3 6 - - 7 8 0 . 8 76 . 4 6 - - 4 4 9 . 2 8 3 4 8 . 20

2 0 2 . 1 5 - - 1 2 8 3 . 9 5 - - 9 9 6 . 0 84 .3 1 - - 1 1 9 8 . 7 6 - - 9 5 3 . 2 76 . 4 6 - - 7 0 7 . 6 8 8 9 .8 0

3 0 2 .1 5 - - 1 3 6 9 . 9 5 - - 1 0 8 2 . 0 84 .3 1 - - 1 3 7 1 . 1 6 - - 1 1 2 5 . 6 76 . 4 6 - - 9 6 6 . 0 8 - - 1 6 8 .6 0

4 0 2 .1 5 - - 1 4 5 5 . 9 5 - - 1 1 6 8 . 0 84 -3 1 - - 1 5 4 3 . 5 6 - - 1 2 9 8 . 0 76 . 4 6 - - 1 2 4 4 . 4 8 - - 4 2 7 . 0 0

5 0 2 - 15 - - 1 5 4 1 . 9 5 - - 1 2 5 4 . 0 84 -3 1 - - 1 7 1 5 . 9 6 - - 1 4 7 0 . 4 76 .4 6 - - 1 4 8 2 . 8 8 - - 6 8 5 . 4 0

p r o d u c t i o n i m p r o v e m e n t s , c o m p e t i t i o n o r g o v e r n m e n t s u b s id y , t h e r ew o u l d b e m o r e r a p i d d e v e l o p m e n t o f p r a w n f a r m s i n t h e U S . D u r i n gt h e p a s t s e v e r a l y e a r s , t h e r e h a v e b e e n s i g n i f ic a n t r e d u c t i o n s i n t h e c o s to f s e e d , a n d a d d i t i o n a l r e d u c t i o n s a r e p o s s i b le . F u r t h e r , g o v e r n m e n ts u b s i d i e s i n a g r i c u l t u r e a r e q u i t e c o m m o n , a n d i n a f e w i n s t a n c e s s u c hs u b s id i e s h a v e b e e n a p p l i e d t o a q u a c u l t u r e . F o r e x a m p l e , in H a w a i it h e p r o v i s i o n o f p o s t - la r v a e t o p r i v a t e f a r m e r s b y t h e s t a t e h a t c h e r y ,


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E c o n o m i c fe a s i b i l it y o f p r a w n i n S o u t h C a ro lin aTABLE 9Estimated Net Revenue for Juvenile Prawns Stocked in a New Facility as aFunction of Stocking Density, Seed Cost and Marketing Strategy

197

S e e d s t o c k p r i c e S t o c k i n g r a t e( $ p e r t h o u s a n d ) ( n o . m - 2) M a r k e t i n g s t r a t e g yTai ls W ho le an d tails( $ p o n d - l) ( $ p o n d -1 )

0 4.31 -427.02 182.586.46 -203.47 446.688.61 -221.89 104.9910 4.31 -559.42 10.186.46 -461.87 188.288.61 -566.29 -239.4120 4.31 -771.82 -162.226.46 -720.27 -70 .128.61 -910.69 -583.8130 4-31 -944.22 -334.626.46 -978 .67 -328.528.61 -1255.09 -928.2140 4.31 -1116.62 -507.026.46 -1237.07 -586.928.61 -1599.49 -1272.6150 4.31 -1289.02 -679.426.46 -1495.47 -845 .328.61 -1943.89 -1617.01

free or at low cost (< $ 1 0 per th ousand), was largely responsible forthe establishment of a prawn aquaculture industry there. In SouthCarolina the provision of pine seedlings to indust ry by the state Forestr yCommission is analogous to the state support for prawn farming inHawaii.

The development of markets for this farm-reared product is critical,and the economi c impact of just two market ing strategies was shown in


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198 L. L. Bauer, P. A. Sandifer , T. L J. Sm ith, W. E. Jen kin sT A B L E 1 0Estimated Net Revenue for Postlarval Prawns when Stocked in an Existing

Facility as a Function of Stocking Density, Seed Cost and MarketingStrategy

Seed s tock pr ice S to ck ra te($ per thousand ) (no. m -2]

Ma rket ing s trategyTai~ W h o ~ a n d ~ i ~( $ p o n d -1) ( $ p o n d -1)

0 2.15 --687.25 --435.994.31 --573.32 --487.586.46 --252.42 15.8110 2.15 --773.25 --521.994.31 --745.72 --659.986.46 --510.85 --242.59

20 2.15 --859.25 --607.994.31 --918.12 --832.386.46 --769.25 --500.99

30 2.15 --945.25 --693.994.31 --1090.52 --1004.786.46 --1027.65 --759.39

40 2.15 --1031.25 --779.994.31 --1262.92 --1177.186-46 --1286.05 --1017.79

50 2,15 --1117.25 --865.994.31 --1435.32 --1349.586.46 --1544.45 --1276.19

our economic analysis. Some encouraging preliminary marketing resultswere obtained by Liao and Smith (1980, 1982)and Liao e t a l . (1981).Further examination of existing markets and expansion into newmarkets requires additional analysis, especially for a heads-on product.

Besides improvem ents in revenue via market devel opment efforts,reductions in production costs are also possible. For example, the


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Eco nom ic feasibi l ity o f praw n in Sou th Carolina 199T A B L E 1 1

Estimated Net Revenue for a Mixture of Postlarval and Juvenile PrawnsStocked in an Existing Facility as a Function of Stocking Density, Seed

Cost and Marketing StrategySeed s tock pr i ce($ per thousan d)

Stocking rate(no. m -5 Marketing strategyTails Wh ole an d tails( $ p o n d - l ) ( $ p o n d - l )0 2-15 --596.33 --308.66

4.31 --338.54 --93.056-46 324.54 1122.02

10 2.15 --682.33 --394.664-31 --510 .94 --265.456.46 66.14 863.62

20 2.15 --768.33 --480.664.31 --683 .34 --437.856.46 -- 192.26 605.22

30 2.15 --854.33 --566.664-31 --855.74 --610.256.46 --450.66 346.82

40 2.15 --940.33 --652.664-31 --1028.14 -7 82 .6 56.46 --709.06 88.42

50 2.15 -- 1026.33 --738.664.31 -- 1200.54 --955.056.46 --967.46 -- 169.98

con str uct ion of paddle-whee l ae rators on site and the use of lower costfeeds could effect significant cost savings.

In conclus ion, prawn farming appears compet i t ive wi th currental ternative cro ps on So uth Carolina farms and th us offers pote ntia l forsupplemental income for farmers here and elsewhere in the south-eastern United States.


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200 L . L . B auer , P . A . Sand i f e r , T . L J . Sm i t h , W . E . J e nk i n sT A B L E 1 2

Estimated Net Revenue for Juvenile Prawns Stocked in an ExistingFacility as a Function of Stocking Density, Seed Cost and Marketing

StrategyS e e d s t o c k p r i c e S t o c k i n g r a te( $ p e r t h o u s a n d ) ( n o . m - 2)

M a r k e t i n g s t r a t e g yTai ls W hole an d ta il s

( $ p o n d - x) ( $ p o n d - x)0 4.31 88.40 698.006.46 311.95 962.16

8.61 293.53 620.4110 4.31 --84.00 525.606-46 53.55 703.70

8.61 --50.87 276.0120 4.31 --256.40 353.20

6.46 --204.85 445.308-61 --395.27 --68.39

30 4.31 --428.80 180.806.46 --463.25 186.908.61 --739.67 --412.79

40 4.31 --601.20 8.406-46 --721.65 --71.508.61 --1084.07 --757.19

50 4.31 --773.60 -- 164.006.46 --980.05 --329.908.61 --1428.47 --1101.59

ACKNOWLEDGMENTSWe thank the mariculture staff at the Marine Resources ResearchInstitute, especially Alvin Stokes and William Eisle who manage theresearch ponds. This paper is the result o f research sponsor ed by theNational Sea Grant College Program, Depar tmen t of Commer ce, underGrant Nos NA79AA-D-00132 and 04-8-M01-173, and the state of


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Economic feasibility of prawn in Sou th Carolina 20 1S o u t h C a r o l in a . R e f e r e n c e t o t r a d e n a m e s in t h is p a p e r d o e s n o t i m p l ye n d o r s e m e n t b y t h e S e a G r a n t P r o g r a m o r t h e s t a t e o f S o u t h C a r o l in a .C o n t r i b u t i o n N o . 1 64 f r o m t h e S o u t h C a r o l in a M a r in e R e s o u r c e sC e n t e r .

R E F E R E N C E SLiao , D . S . & Smi th , T . I. J . (1980). The marke t ing opp or tu n i ty fo r f r e shwa te r

shr imp in So uth Carolina : a pre l im inary survey. Proceedings 5th Tropical andSubtropical Fisheries Technology Conference of the Americas, Texas A & MUnive rs i ty , pp . 67 -6 9 .

Liao , D. S . & Sm ith , T. I . J . (1982) . M arke t ing of cul tured prawns, Macrobrachiumrosenbergii, in S outh Carol ina . Journal Worm Mariculture Society, 13, in press.Liao , D. S . , Smith , T. I . J . & T aylor , F . S . (1981) . The mark e tab i l i ty of prawn s

Macrobrachium rosenbergii in restaurants in So uth C arol ina : a pre l im inaryana lysis . Proceedings 6th Tropical and Subtropical Fisheries Technology Con-ference of the Americas, Texas A & M Unive rs i ty , pp . 38 -41 .

Rober ts , K. J . & Bauer , L. L. (1978) . Costs and re turns for Macrobrachium grow-ou t in Sou th Ca ro l ina , USA. Aquaculture, 1 5 , 3 8 3 - 9 0 .

Sandife r , P . A. & Sm ith , T. I . J . (1979 ) . E xpe r im enta l aquacul ture o f the M alaysianp r a w n Macrobrachium rosenbergii (de Man) in South Carol ina , USA. In :Advances in Aquaculture, eds. T. V. R. Pil lay and W. A. Dil l , Fishing NewsB o o k s L t d , F a r n h a m , E n g l an d , p p . 3 0 6 - 1 1 .

Sandife r , P . A. , Smith , T. I . J . & Bauer , L. L. (1982) . Economic comparisons ofs tock ing and marke t ing s t r a t eg ie s fo r aquacu l tu re o f p rawns Macrobrachiumrosenbergii (de Man) in Sou th Ca ro l ina , USA. Proceedings of the Symposium onCoastal Aquaculture, Cochin, India, 1980, 1, pp . 88-97.

Sm ith , T. I . J ., Sandife r , P . A. & T rimble , W. C. (1976) . Pond c ul ture of theMa lays ian p raw n Macrobrachium rosenbergii (de Man) in South Carol ina , 1974-1975. Proceedings 7th Annual Workshop Worm Mariculture Society, San D iego,Ca l i fo rn ia , pp . 6 25 -45 .

Smith , T. I . J . , Sandife r , P . A. & Smith , M. H. (1978) . Popula t ion s t ruc ture ofMalaysian prawns, Macrobrachium rosenbergii (de Man) , reared in ear then pondsi l l Sou th Ca ro l ina , 1974-1976 . Proceedings 9th Annual Workshop Worm Mari-culture Society, Atlanta , Georgia , pp . 21-38.Smith , T. I . J . , Sandife r , P . A. , Jenkins, W. E. & Stokes, A. D. (1981) . Effec t ofpopu la t ion s t ruc tu re and dens i ty a t s tock ing on p roduc t ion and commerc ia lfea s ib il i ty o f p rawn Macrobrachium rosenbergii fa rming in t em pe ra tu re c l ima te s .Journal World Mariculture Society, 12 (1 ), 233-5 0 .

Bauer 1983 Aquacultural-Engineering

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