Small scale fish producers in the state of Kentucky face both production and marketing challenges. Also, pond-based aquaculture can be an expensive enterprise, specifically in Kentucky where pond construction costs can be three times as expensive as other states due to widespread karst systems and rocky soil conditions. Indoor fish farming is very capital intensive with most enterprises requiring insulated building with road access, drainage, lighting, and temperature control. These high costs of entry and high levels of risk mean that it is very important for small-scale producers to have markets that can support their enterprise.
Ethnic markets for fish, particularly among African and Hispanic consumers, might pay premium prices creating an avenue for selling their products profitably. Although research has been done on Hispanic markets, very little research has been done around African markets.
This project looks at how small-scale fish farmers can sell live/whole catfish among African consumers in urban areas of Kentucky. A Becker-DeGroot-Marschak model auction was used in order to determine the willingness-to-pay for live catfish. The average willingness-to-pay for live catfish was $7.70/kg. Using these prices and consumer demand estimates, one could calculate the return on investment of a small-scale fish operation in the suburban regions of Kentucky. The results showed that direct-to-consumer sales in ethnic markets, particularly African markets, are one of the few viable options for small-scale fish producers.