Future (perhaps corporate) aquaponics

[Eric Warwick]

I want to know if aquaponics can be made into a profitable business model to replace or change "agrabusiness". I am for the decentralization of food, but will aquaponics be compatible with our modern world. Or would it be better suited towards home use.   

[Green Acre Aquaponics]

I don't see why not.  I too am for the decentralization of food, however despite the local demand, there will probably always be a need for agrabusiness in some capacity.  We have theorized about multiple small local aquaponics farms that support  large distributution facilities.  These operations really wouldn't be very different from the agrabusiness models of corporations that currently produce much of the world's food.  Even though we see those corporations as huge, greedy machines, realistically the small farmer is still fueling them, albeit they are in many instances literally forced into unethical growing practices because of the corporate domination of these very companies.  So sure, aquaponics is perfectly suited for home use, but we need to continue to look outside the box and figure out how to make aquaponics in a commercial sense the answer for agrabusiness tomorrow. 

[TCLynx]

There are so many different ways to do Aquaponics that some methods are very perfectly suited to Backyard home use while other methods are far better suited to commercial operations and really not suited to home use.

 

Now I would caution all those out there who seem to want to jump on the bandwagon of commercial aquaponic operations almost as if it were a get rich quick scheme.  (I'm fairly certain that aquaponics isn't going to make anyone "RICH" and even if it did, it would not do it quick.)  Aquaponics requires patience and it is a form of farming, growing food generally doesn't make the people doing it rich but if done right it should provide enough and that is generally fulfilling.

 

There are not very many commercial aquaponics businesses out there yet that are turning a profit yet but I hope we get more examples soon.

 

I do like the idea of following Joel (Backyard Aquaponics) model of bringing food production home one backyard at a time.  Home systems are not likely to provide 100% of a families food but having fresh produce growing at home then frees up more of the commercial growers to provide the things that are not so easy for home processing.

 

Of course most of our population is totally dependent on the grocery store so producers like green acres and Friendly will have outlets for their salad crops for a long time to come I'm sure.

 

[Sylvia Bernstein]

I see this as a very interesting, multi-part question so I'd like to deconstruct it a bit if I may

•  "if aquaponics can be made into a profitable business model" - I am certain that aquaponics can be made into a profitable model.  If you take the need to heat water and use plant lights out of the equation - i.e. the UVI or Friendly AP situations - I think we already have profitable models.  Once LED lighting is widespread and less expensive I believe lighted warehouses (Sweet Water) can become profitable, especially if they match the fish they grow to the ambient water temperature.  While I agree with TC that it is hard to imagine people becoming rich from this, there are very profitable hydroponic lettuce growing operations out there so it might be possible.
• " replace or change "agrabusiness"". - I strongly believe that aquaponics will be a very important part of our global food future.  I don't think it will ever replace agribusiness, nor do I think it will change it.  What will change agribusiness is increased cost of fossil fuels due to peak oil, decreased availability of water, a less predictable climate, and oceans drained of fish.  
• "will aquaponics be compatible with our modern world?" - Can't imagine why it wouldn't be compatible, but if not the modern world, certainly the future world...like tomorrow!  It addresses every one of the serious problems that are causing our future food supply to be at risk. 
• "would it be better suited towards home use?" - I agree with TC.  It is equally suited to both, but perhaps using different systems just like you probably wouldn't grow a field of wheat for home use, and a polyculture square foot garden may not be appropriate for a commercial farm (but then again....)

[RupertofOZ]

At the risk of sounding negative... I think we need a dose of realism...

 

Sylvia Bernstein said:

•  "if aquaponics can be made into a profitable business model" - I am certain that aquaponics can be made into a profitable model.  If you take the need to heat water and use plant lights out of the equation - i.e. the UVI or Friendly AP situations - I think we already have profitable models.  

 

Unfortunately I don't agree with you that either of those models can be considered "profitable models"

 

The UVI systems were set up within, and with academic grants, and never seriously as a "commercial" operation... and limited to specific crop production

 

I've heard increasing evidence regarding the Friendlies operation, that ranges from over-stated production claims... to abuses of workers through the "internship" program... bad hygene and operational maintenance... and over-stated financial figures..

 

I've also heard of unpaid accounts and near insolvancy...

 

•  While I agree with TC that it is hard to imagine people becoming rich from this, there are very profitable hydroponic lettuce growing operations out there so it might be possible.

Yes there are many profitable hydroponics operations in existance... but it took several decades before the necessary techniques were developed to make the "model" replicable and profitable... such that anyone with the desire and funding could reproduce a successful business...

 

And there is a necessary scale for a successful "commercial" hydroponics business.... and a neccassary level of capital investment required... and sufficient investment capital availability...

 

Similarly, it took a decade or more to develope an acceptance of hydroponics.... and grow the market to the point where it became "commercially" viable...

 

Aquaponics is not yet at any of those points...

• " replace or change "agrabusiness"". - I strongly believe that aquaponics will be a very important part of our global food future.  I don't think it will ever replace agribusiness, nor do I think it will change it.  What will change agribusiness is increased cost of fossil fuels due to peak oil, decreased availability of water, a less predictable climate, and oceans drained of fish.  

Aquaculture already produces nearly 45% of fish ... but the majority of the fish to market... is produced in countries with low land and labour costs... with near non-existant regulatory compliance requirements...

 

All of the same costs and factors, that will impact on agri-business are in most cases, other than reduced water costs... just as applicable to aquaponics...

• "will aquaponics be compatible with our modern world?" - Can't imagine why it wouldn't be compatible, but if not the modern world, certainly the future world...like tomorrow!  It addresses every one of the serious problems that are causing our future food supply to be at risk. 

I'd like to think so... but frankly, while awareness is certainly growing rapidly... there's still not a wide spread acceptance or even knowledge about aquaponics throughout the world... at street level, or corporate level...

• "would it be better suited towards home use?"

Indeed ... it has complete relevance to home food production.. and the paradigm that goes with that

But there's one thing that's almost always left out of all discussions relating to commercialising aquaponics...

The need to incorporate proper Food Safety and other regulatory compliance issues... even if they don't exist, or aren't currently enforced...

Aquaponic "businesses" might get away without doing so for as long as it remains a "boutique" farmers market style operation... but heaven help the day when someone falls ill with food poisoning...

The aquaponics "industry" will suddenly become regulated into near non-existance... especially if it has gained a commercial foothold that begins to infringe on traditional producers and/or markets...

[Kobus Jooste]

Eric - thanks for starting a nice discussion!

 

Rupert - are you guys alright down where you stay?  Seems like mother nature has taken a serious dislike to your Island.  Which part of Oz do you reside in?

 

I skimmed through most replies and must say that I will almost 100% back Rupert on this one.  Whenever there is talk of regulation on this forum, a great many folk get the shivers and start fearing the demise of AP as big brother steps in to ruin the fun, but when you want to be commercial, HACCP and ISO is waiting for you.  I really like the fact that hydropinics was highlighted, including the legth of time that was required to get it mainstream.  AP will need that time, and it will have to compete head on with a saturated market.  That is not easy going when your competition is super robust.  As an example I will use the tomato market in South Africa.  We have a huge corp called ZZ2 (No, they are not cool rockbilly types) that completely controls the market.  If they catch a sniff of a new player trying to get in, they drop their selling price to below cost for as long as it takes.  They win because they are huge and can take the ripple on a few % of their annual output.  Another issue: Food prices are skyrocketing, which is not good for niche market stuff.  Already, I am seeing organic and standard produce offered at the same price here in South Africa.  Thus you are going up against a dirt farmer and getting the same price per kg while your Cap Ex is far more than his to begin with. 

 

Also, the profit lies in the value add, not the farm.  Your best bet is to have a production and packing facility, as your margins will look a whole lot better.  Expect to pay off most of your life on the capital costs though.......

 

On a positive note, I think there are reasons to be positive about the possibility of small commercial ventures working (especially if there is co-operation between farms using a central processing facility).  As food scarcity and production costs grow, I think there will be gaps for locally produced.  In the last three weeks, we have seen the governments of three 3rd world nations going pear.  More will follow, and I think developed countries should start producing rather than importing.  This will not be an overnight issue, and for those that want to start commercially now, the slog is on.  My figures show a very protracted ROI for a medium to large tunnel farming venture in South Africa, and I'm sure it will be the same everywhere else in the world.  AP is 80% cost up front and 20% annual running costs, or something like that.  If you can handle the cost of a loan, ensure quality control and secure a market, you have a sniff. 

 

The sad thing though, is that even if AP is shown to be very efficient, that alone is not enough for doors to open.  Plain business capability, competitive ability and bravery will get some off the ground, while others crash and burn.  I recently attempted a discussion around realistinc growth rates and production expectations in order to see how people respond.  Things were rather quiet.  The consulting marketers have been busy selling up a storm around AP potential - the next ten years will show the reality, and as Rupert said, there may just be a tad gap between the two curves......

 

 

[David Owens]

I believe everyone is debating the point, only because no public records of commercially viable AP businesses have been available. It seems that AP is a fledgling industry full of practicing "craft" growers however it could become viable if we can bring experts from other profitable agriculture businesses together. Currently, there are profitable aquaculture, hydroponic, agriculture and marketing businesses out there as well as new technologies like LED and plasma horticulture lighting, green energy technologies and greenhouse geothermal heating. I believe that the future of AP is bright and shiny and should be approached as the challenge it is. We can all agree that oil is a limited resource and the worlds population at large is underfed. This is something that can be corrected by all of us AP enthusiasts by starting our own backyard systems and conducting experiments, sharing information and making leaps in AP science. Eventually, someone will figure out the ratios and numbers and become a role model for people to start successful commercial AP businesses. The future should be very interesting

[Matt Denten]

Although aquaponic farming may have many regulatory "hoops" to jump through, I believe this is the future of farming.  Soils are becoming depleted and large fish are out of stock.  While one country dries up, another country gets its rain and floods.  Disasters like this increase the price of food around the world.  Well, what if we didn't need to plow down the rainforest for canola and cattle fields? What if we didn't have a growing hypoxia zone in the Gulf of Mexico (merely 1 example)?  What if a changing climate and over-fishing really kills the oceans?  Or, what if we did something about it?

 

What if we finally started the real food revolution.  One where we didn't waste fertilizers down our rivers, but applied them methodically as our plants needed them?  What if we recycled "waste water" (as it has been called in the past) from aquaculture tanks into a controlled environment agricultural system?  A system that does not depend on mother nature for nurturing, but rather depends on timers for proper sunlight,  computer controlled feeding systems that add nutrients as they become depleted, humidity and temperature systems that keep the environment as pristine as pre-Columbus America.  A system where everything is just right.

Hydroponic and Aquaponic systems are commercial and will become more common as time goes on.  Any sane person doesn't just sit around and scratch their heads while their field floods year, after year, after year.  They do something else.  That something else is lying in the grow beds of hydroponic and aquaponic systems.  The future is here my friends.

[Kobus Jooste]

One thing that I did not state before is that the group I am involved with in South Africa did a very detailed cost analysis of a commercial aquaponic venture under our conditions.This is where my caution comes from.  With the fish value low and the fish food prices high due to a general lack of aquaculture, a few critical cost drivers rapidly emerged.  First was the food cost, second was electricity costs and third was labour for a large venture (The South African model was made labour intensive for political reasons).  As stated, organic is not big here, thus you are likely farming aquaponically for the same price as everyone else.  Under these conditions, the profits on the farming side was marginal, while adding a small processing facility to value-add on site made a huge difference to the venture's bottom line and ROI.

 

This work was performed before the world went haywire in terms of 2010 / 2011 world agriculture failures, but for our type of market, I still think the value of the work is there.  It will be interesting to see how small to medium size commercial ventures take of elsewhere, as I believe they will.

[Harold Sukhbir]

The question of sustainability cannot escape the world nations forever. Everything has a process.At present Hydroponic and Aquaculture enterprise are commercially successful worldwide.........but they aren't sustainable. One of the more critical limiting factors in commercial AP is the fish feed. Fish feed are designed for use in Aquaculture. We have to develop a suitable Ap fish food which may include a higher iron and potassium content and fatty acids from farmed algae, we have to prepare all this before the question of pollution and depleting natural resources becomes a question  of importance.

 

In my country the cost of gas and electricity is very low and food prices are inflated(greedy middlemen), even with imported high quality fish pellet my estimate indicates a very profitable AP farm. Regulation, as Kobus would know, in Third world countries, are approx. 5-10 years behind implementation of the first world countries.As I have grown up here on this site with the likes of Sylvia, TC and others, profitability would always remain of secondary concern to me.

[Roger Pilon]

Harold,

 

I just stumbled on this document about Cost/Benefit Analysis of Aquaponic Systems

 

http://www.backyardaquaponics.com/Travis/CostBenefitAnalysisofAquap...

 

Could you tel me if it makes sense... or not?

 

Roger Pilon,

Aquaponics Costa Rica

RupertofOZ said:

At the risk of sounding negative... I think we need a dose of realism...

 

Sylvia Bernstein said:

•  "if aquaponics can be made into a profitable business model" - I am certain that aquaponics can be made into a profitable model.  If you take the need to heat water and use plant lights out of the equation - i.e. the UVI or Friendly AP situations - I think we already have profitable models.  

 

Unfortunately I don't agree with you that either of those models can be considered "profitable models"

 

The UVI systems were set up within, and with academic grants, and never seriously as a "commercial" operation... and limited to specific crop production

 

I've heard increasing evidence regarding the Friendlies operation, that ranges from over-stated production claims... to abuses of workers through the "internship" program... bad hygene and operational maintenance... and over-stated financial figures..

 

I've also heard of unpaid accounts and near insolvancy...

 

•  While I agree with TC that it is hard to imagine people becoming rich from this, there are very profitable hydroponic lettuce growing operations out there so it might be possible.

Yes there are many profitable hydroponics operations in existance... but it took several decades before the necessary techniques were developed to make the "model" replicable and profitable... such that anyone with the desire and funding could reproduce a successful business...

 

And there is a necessary scale for a successful "commercial" hydroponics business.... and a neccassary level of capital investment required... and sufficient investment capital availability...

 

Similarly, it took a decade or more to develope an acceptance of hydroponics.... and grow the market to the point where it became "commercially" viable...

 

Aquaponics is not yet at any of those points...

• " replace or change "agrabusiness"". - I strongly believe that aquaponics will be a very important part of our global food future.  I don't think it will ever replace agribusiness, nor do I think it will change it.  What will change agribusiness is increased cost of fossil fuels due to peak oil, decreased availability of water, a less predictable climate, and oceans drained of fish.  

Aquaculture already produces nearly 45% of fish ... but the majority of the fish to market... is produced in countries with low land and labour costs... with near non-existant regulatory compliance requirements...

 

All of the same costs and factors, that will impact on agri-business are in most cases, other than reduced water costs... just as applicable to aquaponics...

• "will aquaponics be compatible with our modern world?" - Can't imagine why it wouldn't be compatible, but if not the modern world, certainly the future world...like tomorrow!  It addresses every one of the serious problems that are causing our future food supply to be at risk. 

I'd like to think so... but frankly, while awareness is certainly growing rapidly... there's still not a wide spread acceptance or even knowledge about aquaponics throughout the world... at street level, or corporate level...

• "would it be better suited towards home use?"

Indeed ... it has complete relevance to home food production.. and the paradigm that goes with that

But there's one thing that's almost always left out of all discussions relating to commercialising aquaponics...

The need to incorporate proper Food Safety and other regulatory compliance issues... even if they don't exist, or aren't currently enforced...

Aquaponic "businesses" might get away without doing so for as long as it remains a "boutique" farmers market style operation... but heaven help the day when someone falls ill with food poisoning...

The aquaponics "industry" will suddenly become regulated into near non-existance... especially if it has gained a commercial foothold that begins to infringe on traditional producers and/or markets...

[Kobus Jooste]

While the question was not directed at me, I'd like to toss some thoughts out there:

1. There is no mention made in the costing of water chemistry balancing - pH or alkalinity.  The cost is not enormous, but without it, the analysis is incomplete.

2.  There is no explanation of how maintenance or replacement components are allocated.  Pumps will not hold forever, and there need to be a factor allocated for this.

3. On the flip side, he uses seedlings as a cost.  Most people that germinate their own will have much lower costs, although again, he makes no provision for the equipment needed for this.  If you let some of your crops set seed, you will have a very low plant seedling cost.

4.  He has very low food costs per fish raised - lower than for me, and his market for the fish is a good rate.

5.  A general price for the crops are given, without any indication on what crops this is based.  For our work, we used PROVEN UVI and ALBERTA raft research results, and took the average yield.  I am also not sure if he assumes that yield will be max all the time or not. 

6.  His structural costs does not seem to include greenhouse / insulation, while his power use have no Cap EX for heaters or running costs for heating.  One has to consider this for areas outside of optimal water conditions.

 

I think his arguments are fine for the area he is in, although the lack of detail on the costing of crop yield, the failure to include maintenance / replacement costs into annual expenses and the ideal operating conditions of his assumptions make it a difficult template for general use.

Roger Pilon said:

Harold,

 

I just stumbled on this document about Cost/Benefit Analysis of Aquaponic Systems

 

http://www.backyardaquaponics.com/Travis/CostBenefitAnalysisofAquap...

 

Could you tel me if it makes sense... or not?

 

Roger Pilon,

Aquaponics Costa Rica

[Roger Pilon]

Thanks Harold.

 

I always like to see the 2 sides of a coin. Nice strait forward analysis by the way!

 

Roger Pilon

Costa Rica Aquaponics