As onshore and inshore aquaculture sectors are experiencing growth bottlenecks associated with diseases and environmental emissions, the vast oceans available to offshore aquaculture seem to present opportunities for greater growth. Central drivers towards offshore oceans may be less conflicts with other users, greater distance to fish disease pressure from inshore, and opportunities to exploit economies of scale in an environment with no other aquaculture producers. This paper provides a comparative analysis of various offshore salmon aquaculture scenarios. We focus on scale and utilization of the fish farm and economic risks. Through comparative investment analysis of offshore projects our paper demonstrates the importance of upfront investment costs and capacity utilization for rates of return. We identify the following critical issues for development of offshore aquaculture – CAPEX of offshore fish farm concept, capacity utilization, risks and constraints in the offshore environment, different sizes of post-smolt and offshore fish farm capacities. Our analysis shows that the production strategies will have implications for post-smolt production strategies and investment decisions.
The purpose of this article is to investigate the economics of offshore salmon farming. This will be achieved by comparing different scenarios of relevant offshore production strategies. Offshore oceans provide biophysical environments and risks that are new to the salmon farming industry and new innovations are required in several stages of the value chain.
This paper analyses biological, technological, operational, and biophysical challenges and risks, and implications for investments, production strategies and financial returns. The harvest potential of each production strategy is found, together with cost of production, Net Present Value, Internal Rate of Return, and discounted payback period.
Our analysis shows that relevant offshore production strategies are highly dependent on the ocean environment. The production strategies and size of smolt or post-smolt have significant consequences for capacity utilization, cost productivity and financial returns.