The business of aquaculture doesn’t generally make headlines unless a company like Cargill treads into the industry, which is exactly what was recently reported when it announced it was buying Norwegian salmon feed supplier, EWOS for an estimated $1.5 billion. The company produces and distributes feed in Norway, Chile, Scotland, Canada and Vietnam and in 2011 reported having a 36% global market share in feed for salmon.
Fish feed or meal (pellets made from grain, smaller fish and fish oil) is at the core of aquacultureand has been estimated to account for about 40-50% of producers’ cost. It also is approximately 4% of the total feed market that, according to global research firm MarketsandMarkets, is estimated to be valued at $124 million by 2019.
Fish feed was a logical move for Cargill, as was the EWOS purchase: the Minnesota-based ag giant is (among other things) a major supplier of livestock feed (pork, poultry and beef and dairy cattle), used round the globe. While the company currently has a division that develops feed for commercial varieties of fish (tilapia and catfish) and shellfish (shrimp), salmon (a carnivore higher on the food chain, thus having a greater need for feed) is relatively new terrain.
As consumers have been seeking out protein sources other than red meat, Cargill has been increasing its presence in aquaculture in recent years. This year alone, it was reported that it invested over $7 million to promote aquaculture in Mexico. Just last month it was reported Cargill forged a $30 joint venture with Naturisa to build a shrimp feed facility in Ecquador. These deals give Cargill a presence in the fish industry that affects fish eaters in Southeast Asia, Mexico, China and the US among others.
Aquaculture, as well, has been gaining steadily, and in 2012 edged out production of beef for the first time (an output of 66 million tons of fish as compared to 63 million of beef). In fact, more fish is farmed today than caught wildclearly, more good news for Cargill as it has been estimated that by 2023 farmed fish will surpass wild catch (which steadily has declined due to overfishing and environmental efforts to protect natural fisheries).
As I’ve reported, aquaculture has gotten its share of bad press in the US (although 90% of the fish eaten by US consumers is farmed). Cargill clearly has its sights set on the global market and while environmentalists continue to raise issues (overuse of antibiotics, spread of disease, in breeding especially concerning fish farms near open waters and depletion of fish feed sources, to name a few), many agree that the industry has made positive inroads in recent years.
Yet a key supply and demand issue surrounds the industry: As more people eat fish, production of smaller fish needed for fish meal simply can’t keep up. Also on the challenges list include developing feed alternatives that do not rely on fish protein and breeding species that do not require protein-based feed. Some research has explored the use of rapeseed oil and potatoes, instead of fish oil, yet neither has the protein heft that larger fish like salmon need to grow.
Leading aquaculture researcher and feed specialist Dr. Ron Hardy, Director of Aquaculture Research Institute (ARI) at the University of Idaho has lead an effort to create feed and fish alternatives.
I have been working on alternatives to fish meal and fish oil in feed for a long time. We’ve done a lot with soy products and have made a huge advance over the past 15 years though selective breeding of rainbow trout. We now have a strain that grows rapidly and does so when fed an all-plant protein feed. We are in the process of releasing this strain to the US trout industry.
Speaking of new breeds, when Hardy is asked to comment on AquaBounty Technology, the company responsible for genetically modified salmon that has been mired in controversy, he says that it is unlikely to be embraced by the public or the aquaculture industry.