THE BIOECONOMIC FEASIBILITY OF CULTURING TRIPLOID CRASSOSTREA ARIAKENSIS IN NORTH CAROLINA Jonathan H. Grabowski Gulf of Maine Research Institute, Portland, ME 04101

Bioeconomic Model of C. ariakensis Culture Venture (1) Quantify investment costs (2) Quantify production costs (3) Estimate cash flow (4) Calculate the annual enterprise budget

Bioeconomic Model (Continued) (5) Evaluate the sensitivity of profitability during the first five years of operation to variation in the following parameters: –Seed price –Operation size –Market price –Mud-blister infestation –Oyster survivorship

Background Information: C. Ariakensis Culture Venture 3 acre lease in North Carolina 500,000 triploid oysters planted per year 5 year duration (annual crops) Rack-and-cage grow-out

Growout Phases 1.Hatchery phase – oyster spawned, eggs fertilized, & larvae reared to ~3 mm shell height (SH) seed –6-8 weeks duration –Not included in our analyses 2.Nursery phase – 3 mm (SH) oysters raised to 25 mm (SH) in upwellers or in fine-mesh cages in the field –6-8 weeks duration Grow-out phase -25 mm oysters raised to edible sizes (75+ mm SH) –4-9 months duration (time-length depends on season of initiation and salinity regime)

Culture Scenarios Investigated Nursery phase –On-site nursery grow-out in the field (3 mm SH) vs. purchase of more costly larger seed (25 mm SH) Seasonal comparisons –Spring vs. summer vs. fall initiation Salinity regimes –intermediate (10-25‰) vs. high (>25‰)

Sources of Data and Info Used in Calculations Growth and survivorship data –Grabowski et al. 2004, Bishop and Peterson 2005a Palatability data –Grabowski et al. 2003, Bishop and Peterson 2005b Additional info (i.e., Labor estimates, materials costs, etc.) –Unpublished data (Peterson, Grabowski and Bishop) –Numerous conversations with NC fishermen

Biological Data Used in Analyses Season of InitiationSalinity Regime Survivorship (%) Grow-out Time (months) SpringHigh (>25 ‰)56.24 Intermediate (10-25‰)75.47 SummerHigh56.24 Intermediate75.47 WinterHigh90.06 Intermediate94.09

Mud Blister Data Season of InitiationSalinity Regime % of Oysters with >25% Mud Blister Coverage SpringHigh (>25 ‰)35.3 Intermediate (10-25‰)61.6 SummerHigh35.3 Intermediate61.6 WinterHigh0.1 Intermediate0.1

Triploid C. ariakensis Seed Costs Season of Initiation Spawned Purchase Size Purchase Date Seed Cost ($/1000 seed) Grow-out Stage Begins SpringMarch3 mmApril211-Jun 25 mmLate May961-Jun SummerMay3 mmJune141-Aug 25 mmLate July641-Aug WinterAugust3 mmSeptember141-Nov 25 mmLate October641-Nov

Financial Operation (Assumptions) Market price –Half-shell market = consumed raw or steamed $0.25 per oyster –Shucked market = processed oysters $0.063 per oyster

Continued Capital asset depreciation – straight-line All costs and expenses were inflated by 3%/yr Laborers are self-employed and paid $10/hr maintenance costs: –2% for rack and cage materials –10% for skiff, skiff motor, boat trailer, and truck

Continued Taxes were calculated for a sole proprietorship Federal and state income & self-employment taxes Net return to owner: Total Revenues – (Capital Costs + Production Costs + Taxes) Percent return on investment: Total Revenues/ (Capital Costs + Production Costs + Taxes)

Results: (1) Investment Costs for All Scenarios

Investment Costs for the Most Profitable Scenario: Winter Culture at High Salinity with On-site Nursery Grow-out

(2) Production Costs for All Scenarios

Production Costs: Winter Culture, High Salinity, & On-site Nursery

(3) Ending Annual Cash Balance for All Scenarios

Cash Flow: Winter Culture, High Salinity, & On-site Nursery

(4) Average Enterprise Budget: Winter Culture, High Salinity, & On-site Nursery

Profitability of C. ariakensis culture for all scenarios

(5) Sensitivity Analyses: Winter Culture, High Salinity, & On-site Nursery

Conclusions Triploid C. ariakensis culture could be profitable Need to consider salinity regime and especially seasonal timing of culture operation Assessment conducted with NC data –Needs to be conducted with info from Chesapeake

Importance of Timing Only operations initiated in winter were profitable –Annual profits ranged from 33-36% with on-site nursery and 16-18% without –Purchasing larger seed results in more modest return but removes risk of nursery phase mortality In summer, operations lost b/w 18 and 44%: –High-salinity sites experienced poor survivorship –Mud blistering was very high at intermediate salinities

Additional Concerns & Suggestions Successful winter culture requires new or expanded oyster markets in May, June, and July Impacts of large increases in triploid oyster supply on market prices are unclear Overcoming high mortality & mud blister infestation critical to turning a profit in summer Further investigation is needed to determine the threshold size at which oysters are no longer susceptible to mortality from Bonamia

Additional Concerns & Suggestions Alternative solution: developing a triploid native oyster –Currently produced by one grower –Produces a marketable product during the off season (i.e., not watery like diploid C. virginica in the spring and summer) –Increased growth rates would potentially reduce risk of mortality from dermo –Would avoid potential ecosystem risks associated with non-native species introductions

Acknowledgements Funding Sources: North Carolina Division of Marine Fisheries, NOAA, and the Golden Leaf Foundation. S. Allen, Jr., J. Braddy, R. Carnegie, R. Graham, M. Hooper, P. Hooper, M. Marshall, D. Newman, D. Schmidt, J. Swartzenberg, H. Summerson, and M. Ulery provided data on labor requirements, seed and market prices, and equipment costs associated with oyster culture.