Open AccessSize Economies of a Pacific Threadfin Polydactylus sexfilis Hatchery in Hawaii
Author(s) -
Kam Lotus E.,
Leung PingSun,
Ostrowski Anthony C.,
Molnar Augustin
Publication year - 2002
Publication title -
journal of the world aquaculture society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.655
H-Index - 60
eISSN - 1749-7345
pISSN - 0893-8849
DOI - 10.1111/j.1749-7345.2002.tb00020.x
Subject(s) - hatchery , diseconomies of scale , fishery , production (economics) , unit cost , economies of scale , variable cost , biology , agricultural science , total cost , agricultural economics , unit (ring theory) , business , economics , fish <actinopterygii> , accounting , mathematics , marketing , mathematics education , macroeconomics , microeconomics
A spreadsheet model has been developed to determine the viable scale for a commercial Pacific threadfin Polydactylus sexfilis hatchery in Hawaii. The production scheme is modeled after current practices performed at the Oceanic Institute in Waimanalo, Hawaii. For a hatchery enterprise producing 1.2 million fry per year, the cost associated with raising one 40‐d‐old 1.00‐g fry is estimated at 22.01ø. The largest variable costs are in labor and supplies, which comprise 49% and 9% of the total production cost. The combined annualized fixed cost for development and equipment is approximately 12% of total production cost. At a sale price of 25ø per fry, the 20‐yr internal rate of return (IRR) is 30.63%. In comparison to the 22.01ø unit cost for 1.2 million fry production, analyses of smaller enterprises producing 900,000 and 600,000 fry per year reflected significant size diseconomies with unit costs of 27.41ø and 38.82ø, respectively. Demand to support a large scale Pacific threadfin commercial hatchery is uncertain. Since smaller scale commercial hatcheries may not be economically feasible, facilities may seek to outsource live feed production modules or pursue multiproduct and multiphase approaches to production. An analysis of the production period length, for example, indicates that the cost for producing a day‐25 0.05‐g fry is 17.25ø before tax and suggests the financial implications of transferring the responsibility of the nursery stage to grow‐out farmers. Evaluation of the benefits gained from changes in nursery length, however, must also consider changes in facility requirements, mortality, and shipping costs associated with transit, and the growout performance of and market demand for different size fry. Sensitivity analyses also indicate the potential cost savings associated with the elimination of rotifer, microalgae, and enriched artemia production. Managerial decisions, however, must also consider the quality and associated production efficiencies of substitutes.