Could salmon or shrimp be the new market opportunities for farmers in the Midwest?
An Iowa startup is seeking investors and raising funds to build a fish farm in the state that could potentially produce as much as 5.3 million pounds of salmon a year.
Inland Sea, started by a father and son, is holding meetings over the next week across Iowa, seeking investors for the project. Jackson Kimle, vice president of business development at Inland Sea, said the company represents a scaling up of aquaculture that also moves such production away from traditional areas of salmon production.
“There are a lot of projects going on in the United States of smaller scale, but we think this is one of the first that hits the economies of scale so that over time we can lower the price point and raise the availability for producing a lot more in one facility,” Jackson Kimle said.
Kimle said one of Inland Sea’s team members is Peder Hansen, an Omaha-based renewable energy consultant, who is originally from Denmark. Hansen had followed the progress of an aquaculture operation in Denmark and wanted to bring that concept to the U.S.
Jackson Kimle said he and his father, Kevin Kimle, met with Hansen about four years ago and slowly began working together on an aquaculture project. Kevin Kimle, the company’s chief executive officer, also is a professor and director of the Agricultural Entrepreneurship Initiative at Iowa State University.
More fish production will be needed to feed a growing population while raising fish in a controlled environment that protects the fish and consumers from pollution, Jackson Kimle said. Additionally, roughly 90% of fish and seafood eaten in the U.S. is imported. More domestic production is needed, he said. “Our plan is to provide the high quality supply of farm-raised salmon needed for growing U.S. demand,” he said.
As aquaculture develops, commodity organizations are working on ways to feed those fish and other seafood. Ohio farmer Bill Bayliss chairs the National Soy Aquaculture Alliance Board of Trustees, which was formed in 2010 to promote aquaculture as a market for soy. Bayliss said fish have the potential to become the biggest emerging livestock market for soybeans. Noting that capacity for other livestock is peaking, aquaculture is growing because fish and other seafood are eaten so widely outside the U.S.
“If we’re going to sell and grow more fish, we’re going to have to do it through aquaculture because the oceans are pretty well topped out,” Bayliss said. “Captivity also gives you a chance to ensure everything is more controlled to increase the supply.”
Noting every fish variety has a different feed type, some fish being farmed are already vegetarian, but others, such as salmon, are carnivores that demand more protein in their diets. While fish meal might be the dominant product in a mix, there are opportunities to blend in soybeans as well. More work is being done to develop soybeans with lower carbohydrates and higher protein content. Bayliss said a high-protein soybean meal would be cheaper than fish meal made with meats.
“We think we could furnish soy meal for about one-third to half the cost of what fish meal might be,” Bayliss said. “When you get right down to it, that’s one of the things that is going to go to help expand aquaculture is reducing the cost of their feed.”
Kimle said feed for the salmon at Inland Sea would include a mix of traditional fish meal and oil, as well as rapeseed oil and a soy meal using beans specifically bred for salmon and the aquaculture industry. Those soybeans provide good digestibility and a high protein content. Ideally, Kimle said, Inland Sea could begin working with growers to produce those soybeans near Harlan, Iowa.
Bayliss sees a lot of potential for soybeans as aquaculture grows. He pointed out the Soy Aquaculture Alliance recently toured a research facility in Minnesota working to raise trout, as well as build a facility to produce a salt-water shrimp. The company working on that facility bought a process patented at Texas A&M that could lead to growing 1 million pounds of shrimp per acre of water in a given year.
Inland Sea is planning to break ground in Harlan on its operation this winter or early spring with the facility designed to operate as a recirculating tank for raising salmon. Once the facility is up, it would take about a year to begin harvesting 10 to 12 pound salmon, Jackson Kimle said. The farm would harvest and process about 100,000 pounds of salmon a week, or about 5.3 million pounds a year. At 10 pounds each, that would be about 530,000 salmon harvested each year.
For now, Inland Sea is seeking to raise about $12 million in capital from accredited investors to help with funds needed to get further debt financing for the construction and startup operations. Inland Sea is conducting six meetings around Iowa through next week.
The company notes investors must have a net worth of $1 million, outside the value of their primary home, or have income topping at least $200,000 over the past two years, or $300,000 for a couple.
In a notice to potential investors, Inland Sea states the salmon operation could generate $16 million to $20 million in revenue, “depending upon prices and actual salmon production, with annual earnings between approximately $4 and $7 million.”
Kimle also said Inland Sea does not have plans to use genetically modified salmon approved by the FDA to grow quicker and larger than native salmon. Kimle said Inland Sea would keep an eye on that technology and customer acceptance before considering the GM salmon.
More details can be found on the company’s website: http://www.inland-sea.com/…
Chris Clayton can be reached at Chris.Clayton@dtn.com
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