A new economic study demonstrates that an Integrated Multi-Trophic Aquaculture operation is more profitable than salmon monoculture

by Dr Thierry Chopin

In 2007, we published our first economic study (Ridler et al., 2007) comparing two aquaculture practices: salmon monoculture and an Integrated Multi-Trophic Aquaculture (IMTA) operation with salmon, mussels and kelps. 

We found that an IMTA operation resulted in a higher net present value (NPV) than salmon monoculture, at discount rates of both 5 and 10 percent. Our sensitivity analysis showed that IMTA farms can enhance resiliency and provide superior financial returns in the face of both a sustained market price decrease of 12 percent over 10 years for salmon, and the loss of salmon harvests due to common environmental perturbations.

A few other studies in Europe and China also demonstrated higher NPV, as well as improved environmental performance, with IMTA. However, despite these encouraging results, researchers and industry stakeholders continue to note that profitability and economic analyses can be improved and investment uncertainty reduced as more data are accumulated and analyses refined.

Developing a new economic study using a discounted cash-flow analysis
To help address such uncertainty in the IMTA literature, we engaged in a new economic study (Carras et al., 2019) using a discounted cash-flow analysis, incorporating a higher capital contingency requirement for IMTA to simulate the added costs of increased operational complexity, along with updated research and real-world financial data accumulated since 2007.

A sensitivity analysis was included in our study to examine the effect on the profitability of a 10 percent price premium on IMTA salmon and mussels, as market studies and consumer preference/attitudinal surveys, conducted in Canada, the USA and Europe, indicated that consumers are willing to pay more for IMTA products. We also examined the impact of losing one harvest of salmon to disease or other natural disturbances over a 10-year period.

Read more HERE.

The Aquaculturists
This blog is maintained by The Aquaculturists staff and is supported by the
magazine International Aquafeed which is published by Perendale Publishers Ltd

For additional daily news from aquaculture around the world: aquaculture-news