An economic analysis of farm-raised catfish production in Mississippi with emphasis on costs and cash flows

The general objective of this study was to estimate costs of producing farm-raised catfish for various marketing and off-flavor scenarios. Producers are faced with obstacles that may impair their ability to market their food size fish. Such marketing obstacles as marketing constraints and off-flavor have significant impacts on the costs of production. Also, an effective assessment of cash flows associated with producing farm-raised catfish was deemed to be essential to the economic success of individual producers.

The first step in accomplishing the general objective of this study was to obtain information which identified and described the most advanced technological method of producing farm-raised catfish. The Delphi procedure was used to determine appropriate production parameters from catfish producers, professionals in the field, and representatives of support industries directly involved with the catfish industry.

Three synthesized farm situations were developed using the economic-engineering approach. The three farm situations were 163, 323, and 643 land acres for Farm Situation I, II, and III, respectively.

Unconstrained total annual costs of production per pound of catfish harvested for Farm Situations I, II, and III, were $.677, \$.630, and $.599, respectively. Feed and fingerlings accounted for approximately 50 percent of the total annual cost for each farm situation.

The imposition of a marketing constraint in the form of year-round sales caused cost per pound of catfish harvested to increase by $.0175 for each farm situation. Also, the cost effects of three alternative off-flavor scenarios ranged from \$.0175 to $.0361 per pound of catfish harvested based on the assumptions of the study. Marketing constraints and off-flavor combined may increase the cost per pound of catfish harvested by \$.0536 depending on the severity of the situation.

Cash flow analyses were developed for alternative financial situations. The cash flow schedules associated with each financial situation were calculated based on expected annual cash receipts and expenditures. The imposition of marketing constraints on cash flows caused cumulative losses to be extended for additional time periods.