Intensive and Extensive Oyster Aquaculture CORPORATION COWART SEAFOOD A.J. Erskine Bevans Oyster Company Cowart Seafood Corporation July 6th, 2012 Preliminary shucking yield results of triploid virginica sparked some oyster industry members to significantly invest in commercial scale oyster aquaculture as a supplementary method to ensure availability of oysters in the future. Bevans Oyster Co and Cowart Seafood are two of the largest oyster processing companies on the east coast. In any one year each company may process between 20 and 60 million oysters. Approximately 85% of these oysters are used for shucking. In the way of brief background, we began this aquaculture development cooperatively between these two companies to anticipate any future difficulty in harvesting oysters. This program is designed to provide commercial-scale quantities of market size triploid C. virginica oysters, approximately 3 inches, to continue operating these shucking houses.

Lower disease mortality compared to higher salinity regions Potomac River BEVANS COWART CHESAPEAKE BAY Low salinity ~10-14ppt Lower disease mortality compared to higher salinity regions ATLANTIC OCEAN Bevans Oyster Co and Cowart Seafood are both located in smaller tributaries off of the Potomac River in Virginia. Both are in lower salinity environments typically ranging from 8-12 ppt. These sites are also lower disease prevalence areas because disease concentration is directly proportional to salinity. As our aquaculture program expands this year to several hundred to a few thousand cages deployed in each of these systems there are certain objections by waterfront landowners. Somewhat lucky for us is that these are rather rural locations and we can identify lower development areas. Also, this region of Virginia seems to understand and fully support the oyster industry in both the past and during this new aquaculture direction that is beginning. VIRGINIA BEACH

OUTLINE Why aquaculture? Development Dual approach Future

REASONING Readily available local product Protection from cow-nose ray predation Improved shucking yield Commercial-scale volume for shucking at specific times of the year Specifically, we entered into this venture to allow these companies to harvest local product and not have to bring a truck up from Texas or buy oysters out of Delaware Bay, simply have a large quantity of oysters in protected structures planted on their leased oyster ground. We are forced to contain these oysters in structures due to heavy predation by the cow nose ray. Although aquaculture is an expensive method to raise oysters we anticipate that the high shucking yield using triploid oysters will return that investment and in addition the use of disease tolerant oyster strains will hopefully allow us to outgrow any parasite proliferation.

‘PHASES’ Phase I : Commercial-scale development of seed nursery for intensive culture Phase II : Mechanization of nursery and development/mechanization of grow-out system for intensive culture. Development of extensive culture system. Phase III : Design and implementation of commercial-scale hatchery

OYSTER AQUACULTURE Intensive (containerized, protected, single seed): - high labor - high cost - high return Extensive (planted loose, clustered seed): - low labor - low cost - low return Specifically, we entered into this venture to allow these companies to harvest local product and not have to bring a truck up from Texas or buy oysters out of Delaware Bay, simply have a large quantity of oysters in protected structures planted on their leased oyster ground. We are forced to contain these oysters in structures due to heavy predation by the cow nose ray. Although aquaculture is an expensive method to raise oysters we anticipate that the high shucking yield using triploid oysters will return that investment and in addition the use of disease tolerant oyster strains will hopefully allow us to outgrow any parasite proliferation.

INTENSIVE AQUACULTURE 14 -21day larval period INTENSIVE AQUACULTURE Set larvae on finely ground shell Stock in nursery/FLUPSY Plant loose in cages Specifically, we entered into this venture to allow these companies to harvest local product and not have to bring a truck up from Texas or buy oysters out of Delaware Bay, simply have a large quantity of oysters in protected structures planted on their leased oyster ground. We are forced to contain these oysters in structures due to heavy predation by the cow nose ray. Although aquaculture is an expensive method to raise oysters we anticipate that the high shucking yield using triploid oysters will return that investment and in addition the use of disease tolerant oyster strains will hopefully allow us to outgrow any parasite proliferation.

FLoating UPweller SYstem (FLUPSY) So, we started by developing a commercial-scale floating upweller system last year at this time. This nursery is essentially a conditioning system for small oyster seed to force feed 24 hours a day. The floating part is made of treated lumber while the upwelling part is the aluminum structure that is suspended in the middle. This frame structure holds each individual oyster bin which has a screen on the bottom where the oyster seed is placed and a door near the top for water to flow into the central channel. The channel is closed at one end and open at the other where the paddlewheel sits. The upwelling action is initiated by rotation of the paddlewheel as is it pulls water from the channel it can only be replaced by pulling water from the bottom of each bin, through each door and back into the channel.

CULTCHLESS SEED OYSTERS Oyster larvae obtained directly from hatchery (triploid) 4-8 weeks in FLUPSY to one inch in size Planted in seed cages Transferred to grow out cages in early spring Maintenance coincides with splitting/harvesting Harvest within 12-18 months

EXTENSIVE AQUACUTLURE 14-21 day larval period Set larvae on shells Plant on bottom Traditional harvest Specifically, we entered into this venture to allow these companies to harvest local product and not have to bring a truck up from Texas or buy oysters out of Delaware Bay, simply have a large quantity of oysters in protected structures planted on their leased oyster ground. We are forced to contain these oysters in structures due to heavy predation by the cow nose ray. Although aquaculture is an expensive method to raise oysters we anticipate that the high shucking yield using triploid oysters will return that investment and in addition the use of disease tolerant oyster strains will hopefully allow us to outgrow any parasite proliferation.

CULTCHED SEED OYSTERS Oyster larvae obtained directly from hatchery (diploid/triploid) Set on whole oyster shells in large tanks Held in tanks for ~10-14 days Planted loose on bottom; no maintenance Harvest between 18-24 months

Phase III--Hatchery

Future Continue to expand intensive and extensive operations Continue to refine hatchery operation Management of nuisance species—cownose ray