FISH

How to Produce $20 Million Worth of Fish

Ocean Fish Farming vs. Recirculating Aquaculture Systems

Fact Sheet • January 2010

T he human population is booming worldwide and demand is escalating for healthy

protein sources like seafood. Yet as more and more people consume fish, we
deplete our wild fish stocks to lower and lower levels. Many popular seafood choices
like cod, various flounders and tunas are all already below healthy population levels.1
Further, because our domestic wild fish stocks are unable to meet demand, the United
States currently imports more than 80 percent of its fish, about half of which is farm-
raised (or “aquacultured”).2

Some industry analysts have suggested that offshore, or

open-ocean aquaculture (also called ocean fish farm-
ing) could help the United States increase its domestic
fish supply and become less reliant on imported seafood.
A second type of fish farming, recirculating aquaculture
systems (RAS), could produce a similar amount of domes-
tically farmed fish as open-water aquaculture. However,
these two farming methods would have very different
effects on the environment and the economy. The global
experience with open-water aquaculture is troubling —
the practice is associated with environmental pollution,
damage to wildlife and competition with commercial fish-
ermen. RAS is a relatively new practice — it has been de-
veloping over the last 30 years — and could offer a more
ecologically sustainable option that also does not, by
design, compete with commercial fishermen. Additionally,
fish-producing RAS can be combined with plant produc-
tion through aquaponic systems, yielding a more diverse
range of food. (Aquaponics is the practice of growing
herbs, vegetables or fruits using the water from fish tanks;
the plants thrive in the nutrient-rich water and purify it for
reuse in fish tanks.)

Following is a comparison of the two methods of fish

production, ocean fish farming and RAS. The analysis
definitively shows that RAS is the more eco-friendly and
economically sound alternative.

Photo of RAS-farmed tilapia by Eileen Flynn/Food & Water Watch.

Ocean Fish Farming vs. RAS: Overview
The following aspects of ocean fish farming and RAS should be considered:
Ocean Fish Farming
Must be a large commercial operation.
Scalability The costs and effort involved make small-scale
operations unrealistic
Uses public ocean areas.
and consequently conflicts with other uses, such as
Use of Space commercial and recreational fishing, swimming, diving, from a room or backyard to otherwise undesirable locations
boating and more (often without compensation to the
public for exclusive use)
Open system.
Free flow of pollutants, including parasites, diseases,
Pollution
chemicals, uneaten feed, waste and animal escapes,
directly into the ocean
In direct competition with fishermen.
Competition
Because of certain escapes, only native species should
with fishermen
be grown via ocean fish farming
Background on the Operations
The following sections compare the financial feasibility of
Ocean Fish Farming and RAS based on two companies:
Hukilau Foods and Premier Organic Farms.
Hukilau Foods began as the Hawaii Offshore Aquaculture
Research Project (HOARP). In 1999, Randy Cates took
over the operation and it became the nation’s first com-
mercial open-ocean aquaculture farm in 2000. 3 In 2006,
the HOARP project was found to have “grossly polluted”
the seafloor, “severely depressed” certain types of sea life
and “drastically changed” the ecosystem.4 In 2006, Cates
entered into an agreement with Visionary, LLC, to form the
company Grove Farm Fish & Poi, LLC.5 The ocean lease
was transferred to this company in 2007 and the farm was
renamed Hukilau Foods.6 Hukilau now plans to expand its
production and lease site, and the numbers here reflect the
upcoming expansion. The Environmental Assessment for
this expansion was approved in July 2009.7
Since the 1980s, the University of the Virgin Islands (UVI)
Agricultural Experiment Station in St. Croix has been
conducting research on RAS. Much of the UVI research is
conducted using a commercial-size RAS that incorporates
aquaponics. Through years of research, the staff at UVI
has established an aquaponics RAS that is made of easily
procured material and is simple and efficient to run. Using
an eighth of an acre for production, the staff raises fish
and produce that is sold at a store on campus. The system
includes four fish tanks, six hydroponic tanks and filtration
tanks to support good water quality and growth for both
the fish and plants.
Premier Organic Farms, which is based on the model
created at UVI, combines organic growing practices in
controlled ecological environments as the basis for their
state-of-the-art, eco-friendly aquaponics farming opera-
tion, which can run anywhere in the world.8 The company
has done extensive research and development over the
Recirculating Aquaculture Systems (RAS)
Scalable.
Can be a family-sized unit in a backyard or basement, or
scaled up to a mid-large commercial-scale operation
Can be placed virtually anywhere,
like brownfields or unused buildings or warehouses
Closed-loop.
RAS are completely contained systems that reuse most of the
water from the fish tanks. Wastes are removed (and poten-
tially used in fertilizer or energy production) and water is
treated and then recycled back to tanks
Can grow other species.
RAS can grow non-native species that would not compete
with fishermen, including popular choices like tilapia
past three years on its design known as the “Pod Grow-
ing Unit.” Premier raises tilapia in RAS facilities that are
linked to plant tanks producing lettuce, herbs, peppers
and tomatoes as its core products. Premier tilapia is fed
an all-natural, nutritionally balanced diet of organic grain
and protein. Premier Organic Farms does not use antibiot-
ics or chemicals, nor does it use hormones.9 Premier plans
to build commercial Pod Growing Units near strategic
markets across the United States over the next five years,
with further expansion worldwide as demand dictates. The
calculations used in the following comparison are from the
Memphis operation, which is currently under construction.
What You Can Get for $13 Million
Because the existing ocean fish farms in Hawaii are private
ventures, their financial records are not accessible to the
public. Therefore, the total amount required to fund one
farm is unknown. However, we do know that $13 million
is being invested in the expansion of Hukilau Foods.10 This
number does not account for the money invested in start-
ing HOARP or Cates International.
One RAS aquaponics operation modeled on the UVI sys-
tem and producing 11,000 pounds of tilapia and 37,800
heads of lettuce per year, can be started with $40,490 (not
including labor costs).
Recirculating Aquaponics
Ocean Fish Farming
Derived from
Derived from the
University of the Virgin
Hukilau Foods
Islands Experiment Station
Number of
1 321
operations
Total 3.53 million pounds of fish
5 million pounds of
production
fish
12.1 million heads of
per year lettuce
Lettuce and other vegetables growing in RAS aquaponic tanks at UVI, courtesy of Dr. James Rakocy at the University of the Virgin Islands in St. Croix.

Large-Scale Commercial Production: Ocean Fish Farming vs. Aquaponic RAS

Aquaponic RAS do not have to be limited to a smaller scale
of production. They can be easily designed to produce
many more fish than Hukilau plans to farm. Premier Or-
ganic Farms started with one operation, modeled after the
system at the University of the Virgin Islands, and has scaled
it up to multiple larger operations. Critics of RAS may
point out that the drawback to this system is the amount of
start-up capital needed (even though the large majority in
this model is for greenhouse plant growth, not fish produc-
tion). However, this capital can be earned by starting small
and building up, or raised through investors, who may be
attracted by the short amount of time expected to recover
start-up costs and turn a multimillion-dollar profit.

Hukilau Foods1 Premier Organic Farms — Memphis2

Ocean Fish Farming Recirculating Aquaponics
Sales in fish
$20 million (projected) for moi $22.3 million (projected) for tilapia
(per year)
Jobs 25 for hatchery and administration 282 full-time operations and production jobs
Fish production
5 million pounds 11.44 million pounds
(per year)
7.7 million pounds of Boston lettuce/arugula
Additional
16.9 million pounds of baby greens/spinach/mixed greens
products None
6 million pounds of herbs
(per year)
12 million pounds of tomatoes
Additional sales $114.5 million in vegetables
None
(per year) (Total sales $136.8 million, fish and produce)
$4.2 million to build fish production unit and tilapia fingerlings and
$13 million now being invested (from private
Initial capital fish food
investors and federal fisheries loans) to scale up
investment $50 million total costs (including land, greenhouse construction,
from 1.25 million pound production levels.3
cafeteria and daycare facility for employees’ children)
$78 million in first year (earnings before tax, depreciation and
Potential profit Less than $7 million in the first year4
amortization)
Space used 61.59 acres of seafloor plus the water column 100 acres of land
15.9 million gallons will be constantly flowing 40 million gallons of captured rainfall (for tilapia and plant
Water used
through the cages at a rate of 0.5-2.0 kts production)

Zero-impact operation — the system is in alliance with other indus-

Energy used Numbers unavailable tries. It will provide heated rain/wastewater for energy plants to use
and will get excess energy from the plants to use for its operation

1
Information drawn from: Aquaculture Planning & Advocacy, LLC. “Final Environment Assessment: Proposed Expansion of Hukilau Foods Offshore Fish Farm, Mamala
Bay, Oahu, Hawaii.” July 29, 2009. Sales, Jobs, Fish Production and Initial Capital Investment at p. 22; Space Used at 8; Water Use at 3 (volume of cages) and 28 (current
speeds) with calculations conducted by Food & Water Watch for gallons of water based on volume of cages. 1 cubic meter = 264.172052 U.S. gallons
2
Information provided by Susan Bedwell, CFO, Premier Organic Farms, September 15, 2009. Information on file at Food & Water Watch.
3
$13 million is the investment that the company plans to make, as quoted in Aquaculture Planning & Advocacy LLC, Op cit. This figure does not include the money that was
invested in starting up the Hawaiian Offshore Aquaculture Research and Demonstration Project, or Cates International, the predecessors of Hukilau Foods. $13 million does
not necessarily represent the money that would be needed to start Hukilau Foods from scratch.
4
This is a generous calculation. Hukilau Foods projects a total wholesale value of $20 million when the operation at full capacity, but it does not actually plan to reach full
production until year three. $7 million would be the maximum revenue possible after recuperating the $13 million investment if the company did reach $20 million in
sales that first year (a lower revenue is actually expected). Plus, because financial figures prior to this expansion were not available, this calculation does not figure in the
financial status, or debt, Hukilau was in prior to this expansion.
“Real” Costs of Ocean Fish Farming
Ocean fish farming is dependent on natural resources.
Because of this, any economic discussion of the industry
needs to also account for the costs of environmental pol-
lution and resource extraction. In other words, in addition
to the basic financial comparison of costs and revenues
(detailed in the sections above), we should also consider
other environmental and social externalities without an
easily quantifiable price. For example, what is the cost of
ocean pollution? What are the economic effects of fish
escapes on wild fish populations? Questions like this ad-
dress less obvious costs that do not have an easy-to-name
dollar value.

Externalities affect many industries. An ill-managed

pulp mill may bring jobs and profits, for example, but it
could also deplete forests and pollute nearby waterways.
Overtime work in a factory may boost production and
incomes, but can infringe on family time and community
life. How much does that cost? We rarely evaluate such Photo of Premier Organic Farms provided by Susan Bedwell.
“costs” at all, because they are not always monetary in
nature, even though we see them every day in the form able, recuperating start-up costs within the first year and
of vanished fisheries, unhappy families, gridlocked cities, perhaps achieving over 11 times the revenue that Hukilau
smog-filled air, polluted water and other social and envi- Foods will in year one.
ronmental woes.11

Unlike the gross domestic product, which simply tallies

the value of all of a nation’s goods and services exchanged
for money, the genuine progress indicator, introduced in
the mid-1990s and endorsed by some 400 economists,
combines social, economic and environmental variables to
measure the real costs and benefits of economic activity.12
Comparing RAS and ocean fish farming under the genuine
progress indicator or some similar mechanism would likely
show RAS even more desirable than our basic financial
comparison already reveals.
Conclusion
For the amount of money being invested in Hukilau Foods’
expansion, 321 commercial scale RAS aquaponic opera-
tions could have been constructed across the country
— every state could have at least six. While these systems
combined would not be able to produce as many fish as
Hukilau Foods expects to farm by year three, they could
make up for it by producing 12.1 million heads of lettuce
combined — or through other vegetable/herb/fruit produc-
tion. These operations could spread employment, econom-
ic gain and food supply across the country — without an
enormous carbon footprint — by bringing fish production
closer to the market where it is used.
Endnotes
1 National Marine Fisheries Service. “Report to Congress on the Status of U.S.
Fisheries (for 2008).” May 2009.
2 Food and Agriculture Organization of the United Nations (2008) FISHSTAT
Plus: Universal Software for Fishery Statistical Time Series (Food and
Agriculture Organization, Rome), Version 2.32.t
3 Hukilau Foods, About US available at www.hukilaufoods.com/about_us
accessed on September 29, 2009.
4 Lee, Han W. “Temporal changes in the polychaete infaunal community
surrounding a Hawaiian mariculture operation.” Marine Ecology Progress
Series, 307:175-195, January 2006.
5 Fujimori, Leila. “AOL-Time Warner’s Steve Case buys Kauai lands for $25
million.” Starbulletin.com, July 8, 2001.
6 Consent to Assign General Lease No. S-5654 Cates International, Inc., Assignor
to Grove Farm Fish and Poi, LLC, Assignee. Board of Land and Natural
Resources, February 9, 2007, Exhibit C. Available at: http://state.hi.us/dlnr/
chair/meetings/submittals/20070209/ld/D%20-%20Land%20Division%20
-%20Submittals%20D11.PDF
7 Aquaculture Planning & Advocacy LLC. “Final Environment Assessment:
Proposed Expansion of Hukilau Foods Offshore Fish Farm, Mamala Bay, Oahu,
Hawaii.” July 29, 2009, p. 3 and 8.
8 Susan Bedwell. “Premier Organic Farms.” Clean, Green, Sustainable
Recirculating Aquaculture Summit. Washington D.C.: hosted by Food and
Water Watch. January 2009.
9 Bedwell, Susan. Personal email. Chief Financial Officer of Premier Organic
Farms, May 15, 2009. Email on file at Food & Water Watch.
10 Information drawn from: Aquaculture Planning & Advocacy LLC. “Final
Environment Assessment: Proposed Expansion of Hukilau Foods Offshore Fish
Farm, Mamala Bay, Oahu, Hawaii.” July 29, 2009 at 22.
11 “The Genuine Progress Index. A better set of tools.” GPIAtlantic. Available at:
www.gpiatlantic.org/gpi.htm
12 Ibid.

For entrepreneurs, investors or policymakers interested

in larger-scale production, it is of interest that Premier
For more information:
Organic Farms’ Memphis facility and Hukilau Foods
web: www.foodandwaterwatch.org
expect to have similar sales in fish products (with Premier
email: info@fwwatch.org
Organic expecting 9 percent more in sales). However,
phone: (202) 683-2500 (DC) • (415) 293-9900 (CA)
Premier Organic Farms will provide 11 times as many
jobs and more than twice the amount of fish — plus 43
Copyright © January 2010 Food & Water Watch
million pounds of produce. It will also be far more profit-