1. The Role of Cooperatives for Aquaculture Producers
Iowa Aquaculture Conference
November 17, 2016
Bill Lynch
President Ohio Aquaculture Association

2. Snapshot of NCR Aquaculture
Data from USDA Aquaculture Censuses
Slide Courtesy of Chris Weeks - NCRAC

3. Snapshot of NCR Aquaculture
Data from USDA Aquaculture Censuses
Slide Courtesy of Chris Weeks - NCRAC

4. Value ($) per Farm
2005
2013
Source: 2005 & 2013 USDA Aquaculture Census

5. Top NCR Fish Species (Bait not included) Sport Fish Sunfish Walleye
Largemouth bass
Sunfish
Walleye
Smallmouth bass
Crappies
Sport Fish
Source: USDA Census of Aquaculture

6. Top NCR Fish Species (Bait not included) Food Fish Carp spp. HSB
Channel
catfish
Carp spp.
Rainbow trout
Yellow
perch
HSB
Food Fish
Source: USDA Census of Aquaculture

7. Synopsis of NCR Aquaculture
Composed largely of numerous small, family farms
Production costs high as economy of scale cannot be take advantage of.
Slim profit margins!
High annual turnover rates as facilities close and new facilities try their luck.
Very diverse
Up to 22 fish / crustacean species grown commercially.
Rainbow trout & walleye the big two!

8. Market Segment Priority
If NCRAC were to focus on one market with the best potential to
substantially increase NCR aquaculture in the next five years, it would be (check only one):
I agree 100%!!!!!
Slide Courtesy of Chris Weeks - NCRAC
All Responses Combined

9. Do You Sense a Problem?
NCR’s small family farms are not positioned to grow the food fish market in a profitable manner because . .
Small farms lack the production to meet client needs;
Lack access to cost effective, quality fingerlings;
Cannot realize economy of scale in terms of costs;
Can’t justify the costs of being a HAACP approved processor for fillet market;
Many owners are uncomfortable with market development and marketing.

10. Solution
Aggregation of Small Fish Farms (even large ones) into a Well Functioning Cooperative.

11. Cooperatives Could Address . . .
Slide Courtesy of Chris Weeks - NCRAC

12. What is a Cooperative?
A cooperative is a business owned and controlled by members who use its services so as to maximize the profitability of the members.
Can you do something better as a group than you can individually?

14. Economic Reasons for Forming An Aquaculture Cooperative
Vertical integration
To obtain a fair or efficient price of products
To reduce costs through economies of scale
To pool risks
To provide markets, supplies, and services that are missing or in danger of being lost
To capture profits from another level
To benefit from increased market power

15. Benefits
Allows culturists to pool financial resources and conduct business activities they could not independently perform as efficiently.
Provide culturists with access to goods and services.
Share knowledge amongst culturists to benefit both the cooperative and its members.

16. Possible Co-op Types Purchasing Co-ops Marketing Co-ops Service Co-ops
Or some combination of above

17. Purchasing Co-ops
Obtain needed products, attain economies of scale to reduce costs, maintain quality of products.
Feed and water quality monitoring supplies.
Probably the easiest cooperative to form and maintain.

18. Service Co-ops Fish processing Harvest Transportation
HAACP approved facility.
Makes no sense for every culture operation to have processing capability.
Harvest
Team & equipment to assist in or do harvest.
Transportation
Truck to move feed and fingerlings.
Vet on contract to provide aquatic health services.

19. Marketing Co-ops Move culture products to markets.
Access / develop new markets, add product value.
Likely to require a marketing person.
Probably the most difficult cooperative to form and maintain.

20. Keys to an Effective Cooperative I
Trust! Trust! Trust!

21. Keys to an Effective Cooperative II
Democratic governance process
Member elected Board consisting of members
Manager held accountable
Board members must have:
Vision
Good communication skills
Sense of fairness

22. Typical Cooperative Structure
Members
Members
Board of Directors
Manager
Employees

23. Keys to an Effective Cooperative III
A Comprehensive Business Plan
Cooperatives are a business! So have a plan!
Failing to Plan is Planning to Fail!
Should be a living document, subject to annual review and revision.

24. Keys to an Effective Cooperative IV
Bylaws – a set of rules by an organization for the governance of its members and the management of its affairs.
Effective Bylaws Build Trust!
Include:
Name, Purpose, & Objectives
Board of Directors, Officers, Elections
Committees
Dues, fees etc.
Meeting of Members
Finance

25. Keys to an Effective Cooperative V
A standardized set of guidelines, rules, & regulations that
are approved by the members and apply equally to all.
Fish production
Feed / feeding
Chemical use
Antibiotic use
Harvest
Develop BMP’s – best way to standardize grower practices.
Purchasing fish from members
Needs to be clear, this is where trust is often lost!
Order of purchases
Pricing
Dockage or bonuses for fillet yield?
Verification of yield - methods

26. Ohio: A case Study for an Aquaculture Cooperative

27. Ohio Production At A Glance . . .
Food Fish
Sport Fish
Largemouth bass
Rainbow trout
Bluegill / sunfish
Tilapia
Yellow perch
Freshwater prawns
Largemouth bass
Bluegill / sunfish
Rainbow trout
Channel catfish
Yellow perch
Tilapia (algae control)
Redear sunfish
Koi / goldfish

28. Ohio Farms by Category # 2005 2013
Source: 2005 & 2013 USDA Aquaculture Census

29. State Aquaculture
Permit Facility (N=182)

30. Gross Sales ($) per Ohio Farm
2013
2005
Source: 2005 & 2013 USDA Aquaculture Census

31. Ohio Food Fish Markets Current Future Potential
Largemouth bass live haul to large, eastern US cities.
Smattering of small sales on ice at farmers markets.
1-2 producers selling to in-state Asian stores.
Fresh fillets to high-end restaurants and specialty stores.
Frozen fillets to sports bars, chain restaurants, clubs, churches etc.
Largemouth bass live haul to large, eastern US cities.

32. Drivers of Future Potential
Dramatic increase in consumers preference for locally grown products.
Restaurants, specialty stores, clubs etc. scrambling to meet consumer preference.
2-5 calls monthly asking about availability.
Perception Lake Erie is once again contaminated due to cyanobacteria blooms.
A nutrient problem rather than manufacturing chemicals.
But still, perception is Lake Erie fish are suspect!

33. Toledo
Cleveland
Lorain
Akron-Canton
Lima
Youngstown
Mansfield
Marion
Springfield
Zanesville
Columbus
Dayton
Cincinnati
Portsmouth
If there were ever a state to substantially increase food fish aquaculture, it is Ohio! Numerous in-state markets!

34. Impediments of Ohio Food Fish Expansion
Absence of down-state HAACP approved processing near large urban centers.
Insufficient production on individual farms to service food fish markets.
Low availability of Ohio grown, high quality fingerlings for grow-out.
Answer: An Ohio Aquaculture Cooperative

35. 27% Feed Cost Reduction
Part of a Formal
Cooperative
Jointly purchase feed

36. What is Needed?
An aquaculture cooperative (s) centered around large Ohio urban centers that . . .
Buys food fish from small Ohio producers, processes the fish with a HAACP processing facility within the cooperative, and directly markets products to high-end restaurants, specialty stores etc. in the urban center.
Takes advantage of the locally-grown, support local farmers movement.
No middlemen – literally “farm to fork”!

37. Geographical Representation
Coop Member Farms
Coop Owned Processing
Facility
High-end Restaurants
Columbus
Population: 1 million +

38. Top-Down Representation
High-End
Restaurants
Specialty
Stores
Caterers
Cooperative - Owned
Processor
Grow-out
Producers
Fry Thru Grow-out
Producers
Fry /Advanced
Fingerling
Producers

39. Aquaculture Cooperatives Can For Small Producers ….
Reduce input costs thru collective purchasing power;
Provide services difficult to justify each producer having;
Increase sales via . . .
collective marketing and sales of high quality, locally grown aquatic products;
Access / develop new markets;
And thereby increase profitability!
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