Potential of Recirculating Aquaculture Systems in the Midwest

LaDon Swann
Illinois-Indiana Sea Grant College Program
Purdue University

With the current national hog crisis, interest in farm diversification has increased dramatically. Aquaculture provides existing and prospective farmers an economically viable and environmentally sound alternative form of livestock production. Many farmers ask if it is possible to convert existing livestock buildings to facilities suitable for aquaculture production. There is no definitive answer to this question, but with adequate information and business planning a reasonable assessment of production scale RAS can be made. This paper is written to address current and potential uses of RAS in aquaculture.

Recirculating aquaculture systems have the interest of prospective and existing fish farmers for many reasons. The advantages and disadvantages most often discussed are:

A review of the history and current status of RAS will assist in understanding RAS potential. There are many proponents of RAS including environmental groups, companies selling equipment, and universities with research and extension programs focusing on RAS. These groups have a vested interest in the success of RAS and often cloud reality with perception. The history of RAS for food fish production has not been a very good indicator of the current status or the potential of RAS. There have been many large companies who have invested millions of dollars in RAS only to fail a few years after production begins. There are a variety of reasons for these failures including under-capitalization, unrealistic marketing goals, poor choice of species, poor management, and poor selection of equipment. The past failures have been useful to the prospective farmer learning how to avoid similar mistakes.

With the current prices of hogs, interest in fish production in RAS is at an all time high. Most fish production in RAS in the Midwest is limited to the production of tilapia sold to ethnic markets found in larger Midwestern cities such as Chicago, Detroit, St. Louis, Kansas City, among others. Production of market size fish (1.25-2 lbs/fish) requires 8-10 months starting with 1-5 gram fry. Prices paid to producers who sell to the live markets ranges between $1.50-2.00 per pound with larger fish receiving a premium. A production goal of 0.5-0.75 lbs. per gallon, excluding water contained in biological and solids filters, is most often cited in business plans. Enterprise budgets and business plans developed for a 130,000 annual production estimate capital outlays totaling $275,000 for the building (22%) and equipment (63%) of the initial investment. Although renovating an existing structure can reduce the building cost, this cost cannot be completely eliminated since modifications to an existing building must be made. There is also a growing interest in the integration hydroponics with fish production. Because of the increased complexity of fish/plant production systems current RAS focus on fish production.

While there are a few food fish producers farming species such as hybrid striped bass and yellow perch in RAS's, tilapia is currently the species of choice. The reasons why tilapia is most commonly grown are tilapia’s hardiness and to a lesser extent its market acceptance. Tilapia will tolerate high production densities and the resulting high ammonia, low oxygen, and high carbon dioxide concentrations. One of the most important contributions made by companies in the past was the increased name recognition and market acceptance of tilapia. Tilapia, however have a few significant disadvantages which prevents it from being the "perfect" species for aquaculture. First, tilapia is a tropical fish and requires warm water temperatures to grow and survive. Optimal growing temperatures for tilapia are between 82-84° F. Growth decreases as temperatures decrease and at prolonged temperatures below 65° F disease outbreaks occur. At temperatures below 60° F tilapia will die. A second disadvantage of tilapia is the differential growth rates among males and females. Males grow much faster than females since females reach sexual maturity as early as four months of age. The precocious nature of females results in much of the energy supplied by feed being diverted to egg formation instead of muscle growth. Monosex production of fingerlings either from sex reversal or hybridization is a desirably way of overcoming problems associated with mixed sex production. Both options are expensive and result in one of the most expensive food fish fingerlings to produce. The final technical challenge is the low dress out percentage of tilapia. A 32-34 percent fillet dress out is the average compared with 45 percent for catfish. The relatively low dress out percentage greatly influences the whole sale price of tilapia.

Other food species that are technically feasible in RAS include hybrid striped bass and rainbow trout. Besides food fish prospective producers should investigate baitfish and ornamental fish production. Ornamental fish and baitfish are generally sold by the inch rather than by the pound like food fish. As a result the market price on a per pound basis for these species is much higher than for food fish.

Wholesale prices for tilapia fillets produced on mega-farms or imported are as low as $2.50 per pound. Most producers growing tilapia in RAS either choose not to compete with these sources or cannot compete. Most food fish produced in RAS are sold to live markets. Terms like "black hole" and "unlimited" market have been used to describe these live markets. While it unrealistic to think that these markets cannot be saturated, they are very large and can likely accommodate several million pounds of additional fish.

Fish produced in RAS do allow a more stable supply because the farmer has more control of the production environment. Producers in southern states growing tilapia in ponds affect live market and fillet prices since they must harvest fish before pond temperatures drop to lethal levels. This annual dumping of tilapia in the fall could be viewed as an opportunity for producers using RAS since tilapia could be bought as a low price and held until prices stabilize.

As mentioned previously, producers using RAS may be able to take advantage of the tilapia glut in the fall by purchasing sub-market and market size fish from pond producers and holding them until prices stabilize. Additionally, we have 150-180 growing season for warm and cool water species. Fish produced in ponds could also be finished in RAS and sold to live markets during the winter and spring. The economic viability of integration of pond culture with RAS should be carefully calculated before implementing.

Other production alternatives often overlooked include the production of ornamental fish and baitfish. Many ornamental fish farms in Florida already utilize RAS. There is no reason why profit motivated fish farmers in the Midwest could not also take advantage of RAS to produce a variety of ornamental fish. Because many newly hatched baitfish rely on zooplankton for their first food source, it may be difficult to use RAS for all aspects of baitfish production. However RAS could be used to finish baitfish or hold baitfish for market.

Fish production in recirculating aquaculture systems (RAS) are the most common production method for producing Tilapia in the Midwest. Tilapia producers are taking advantage of live fish markets located in large metropolitan areas across the Midwest. The use of RAS will expand as cost of production decreases and live markets remain stable. Profit motivated prospective producers should look at all alternatives including food fish, baitfish and ornamental fish before selecting a species. Expanded use of large-scale RAS to produce warm-water ornamental fish is one type of aquaculture that could easily and rapidly expand to supply medium and large ornamental fish brokers in the Midwest. Regardless of how good the market is for the type of fish grown in RAS, only prospective producers who develop a thorough and realistic business plan will be successful.