Assessing the Viability of the Inland Shrimp Farming as a Viable Enterprise in Alabama

View the project final report

• 2005 annual report

Commodities

• Animals: shellfish

Practices

• Education and Training: general education and training
• Farm Business Management: agricultural finance, budgets/cost and returns, new enterprise development
• Production Systems: agroecosystems
• Sustainable Communities: new business opportunities, sustainability measures

Assessing the viability of inland shrimp farming revealed that profitability seemed more likely for the small-scale (5-acre) enterprise when it was an alternative aquaculture enterprise versus a sole enterprise. The fifty-acre enterprise budget appeared to be lucrative if the market is established and is capable of being profitable with or without an alternative enterprise. Although the results suggested that South Central Alabama seems to be a suitable place for culturing saltwater shrimp, there is still a lack of knowledge and experience about inland shrimp farming in the region as well as a lack of well-established markets for farmers’ products.

Introduction

The first attempts at commercial shrimp farming in the U.S. occurred in the late 1960s and early 1970s. The initial U.S. industry used native species of white, brown, and pink shrimp. U.S. researchers found that non-native shrimp from the Pacific coast of Central and South America were easier to culture and more productive in ponds. Gradually, commercial producers in the U.S. concentrated on non-native species such as Pacific White Shrimp (Litopenaeus vannamei), now the most popular species cultured in the Western Hemisphere (Whetstone et al. 2002).

Texas produces more farm-raised shrimp than any other state—approximately 8 million pounds or 3.63 million kg of heads-on shrimp in 2001. Inland culture of Penaeid shrimp in low salinity well water was first documented in the United States by Smith and Lawrence (1990) in Willacy County of Southern Texas (Saoud et al. 2002). The culturing of marine shrimp primarily occurs in near-coastal areas using water of estuarine and oceanic origin. Due to a variety of social, economic and environment issues with coastal farms, the inland culture of marine shrimp has been expanding in a number of countries. In the United States, farmers in Alabama, Arizona, Florida, Illinois, Indiana, Michigan, Mississippi, South Carolina, and Texas have harvested Pacific White Shrimp raised in low salinity well water (Davis et al. 2002). Inland culture of Penaeid shrimp in low salinity well water is a growing business in many areas of the world, including the southern regions of the U.S. Large portions of the U.S. are underlain with saline waters, an underutilized resource that could be used for nontraditional agricultural purposes such as the culture of marine shrimp (Saoud et al. 2002).

Pond-raised saltwater shrimp account for approximately 40 percent of world shrimp production. The production of farm (pond-raised) shrimp between 1976 and 1995 increased from 50,000 to nearly 740,000 tons per year. Most farm production of shrimp comes from countries near the equator where a long growing season allows for more than one crop of shrimp to be grown in a year. Shrimp farming in the U.S. in 1996 was concentrated in the South Texas and in South Carolina. These farms produced about 1,000 tons of shrimp per year compared to world farm production of 712,000 tons per year. Honduras is the major producer of farm-raised shrimp in the Central American region with 12,000 metric tons (live weight) produced on 14,000 ha of shrimp farms in 1998 (Valderrama and Engle 2000). Wild-caught shrimp contributed another 1.9 million tons to the world supply. As a result of worldwide production and global marketing, events in Thailand, Chile, or China can have even a greater effect on shrimp prices than local circumstances because these foreign markets tend to dominate the world market. In 1998, the world’s shrimp farmers produced 737, 000 tons of shrimp, worth an estimated US $6 billion. Thailand has been the world’s largest exporter of cultured shrimp since 1991, and reported export revenues from shrimp of over US $1.6 billion in 1998 (Flaherty et al. 2000).
The demand for seafood in the U. S. far surpasses the amount produced by U.S. commercial fishermen and aquaculture producers. As reported in World Shrimp Farming 2001, farmed shrimp represent 40 percent of world production with an estimated 10 percent of that total being grown in the Western Hemisphere, principally in Central and South America. The volume of shrimp imported into the U.S. rose from 600 million pounds in 1995 to approximately 1.2 billion pounds in 2004. The price per pound of shrimp dropped from around 5.00 per pound in 2000 to around 3.25 per pound in 2004. The U. S. consumption of shrimp has doubled over the past 10 years to over a billion pounds a year. The U.S. per capita consumption of shrimp increased between 1990 and 1998 from 2.2 pounds to 2.8 pounds. Consequently, shrimp are one of the most popular seafood items in the U. S.

Generally, inland saltwater shrimp ponds are located close to a good quality brackish water source with a salinity of 5-30 ppt. The site should have soil with a high-clay content (at least 25 percent), and should not have bedrock or hard layers or a water table within three feet of the surface. Inland shrimp farming by means of low salinity aquifers is providing a substitute to traditional coastal aquaculture where land costs and user conflicts can hinder commercial development as well as a diversification of agriculture (McGraw et al. 2002). Low salinity aquifers scattered throughout West Alabama were unfit for drinking water, but were used to produce catfish. In the midst of a decline in the catfish market in the South Central Alabama, a series of tests were initiated to assess the suitability of the saline groundwater for saltwater shrimp farming. Currently, marine shrimp are being farmed in Alabama, Arizona, Arkansas, California, Florida, Georgia, Kentucky, Hawaii, Michigan, North Carolina, South Carolina, and Texas.

There are about 2,000 species of shrimp in the marine and freshwaters of the world. Alabama waters contain 15 to 22 species of shrimp. Of these, only three – the brown shrimp (Penaeus aztecus), the Atlantic White Shrimp (P. setiferus), and the pink shrimp (P. duorarum) – are eaten and found in commercial quantities in the Gulf of Mexico. The brown shrimp is by far the most abundant and the pink shrimp the least abundant. Approximately 20.5 million pounds of the three species of shrimp were caught in Alabama in 1995, with an estimated dockside value of $45 million. Several times this quantity was processed at Alabama’s coastal packing plants. In 2004, saltwater shrimp was produced in ponds in Greene, Lowndes, and Tuscaloosa counties. South Central Alabama counties are presented as Appendix A. Brackish water aquifers about 600 – 1300 feet below ground served as a water supply for these ponds. Several aquifers like these are scattered throughout West Alabama, with 2– 8 ppt salinity.

The purpose of this study was to assess the viability of inland saltwater shrimp farming in South Central Alabama. Specific objectives were to (1) describe the production of farm-raised saltwater shrimp as an alternative agricultural enterprise, (2) identify the constraints and risks associated with the inland shrimp farming industry, and (3) compare the cost efficiencies of farms via scales of production.