Do you want to know how much money shrimp farm owners make yearly? If YES, here are 7 factors that determine the income & profit margin for shrimp farms.
Shrimps have been farmed for several decades and although the industry is concentrated in two major regions, Asia and the Americas, shrimps are farmed in almost every country in the world. If you are searching for a lucrative farming business idea, then you don’t need to search further than shrimp farming.
Shrimps are always in high demand and if you can create and run a successful freshwater shrimp farm, you will definitely find financial success. Shrimp farms, just like other livestock farms, are known to make money through the sale of their farm raised livestock.
For re-stocking or for commercial food services, shrimp farms tend to sell their produce by quantity or by the pound. Depending on the size and location, prices can range between $10-$30 per pound or from $40 to upwards of $500 per 100 counts.
Also depending on how large the operation, the annual salary of a shrimp farm owner can range between $35,000 to upwards of $150,000.
Many factors have been suggested as influencing the profitability of any shrimp farmer in a positive or negative way. To properly ascertain the amount of money earned by shrimp farms, factors like farm size, sales strategy, farm location and many more crucial factors needs to be considered and analyzed. These factors are expantiated below:
7 Factors That Determine How Much Money Shrimp Farms Make
Table of Content
- 1. Farm Size
- 2. Possible Diseases
- 3. Additional Product and Services
- 4. Sales Strategy and Target Market
- 5. Management Style of the Farm Owner
- 6. Industry Experience
- 7. Farm Overhead Cost
- 8. Harvesting & Marketing Pattern
- 9. Choice and Availability of Aqua feeds
- 10. Technology
- The Average Profit Margin for a Shrimp Farm
1. Farm Size
Most shrimp farmers in the United States use ponds to raise shrimp. However, some start with their basement in tubs, containers, or in old swimming pools. The size of the farm directly affects the capital, time and resources needed to start the farm. The size of the farm will also dictate the output and survival of the shrimps.
For one thing, too many shrimps in one tank can actually stunt shrimp growth. That means that they won’t grow to their full size. Stressed-out shrimps don’t grow at their optimal rate. The larger space a farm has available, the more shrimp farming it can do, which will lead to greater profits.
2. Possible Diseases
The global shrimp farming industry have continually faced numerous challenges. One of the most challenges that have affected the growth and income of these farmers are the various diseases rampaging shrimps globally; there are various viral, bacterial and fungal diseases plaguing the industry.
The history of the industry has been one of serious, periodic global pandemics and diseases. Various diseases will continue to be relevant drivers that influence the profit margin of farmers in the industry.
3. Additional Product and Services
Some shrimp farm owners tend to expand their market base by selling fishes or fish related products, such as feed, pumps, aeration units, water testing supplies, or harvesting devices. By offering these additional items, the possible profit these farmers can make tend to increase due to the added products on the supply list.
4. Sales Strategy and Target Market
Indeed the target market and avenue used to sell the shrimps matter a lot in terms of the profit. Customer types tend to vary, and each will have a different pricing strategy or sales agreement.
Shrimp farm customers might be larger businesses, which need higher volume of shrimps or even private users in the neighbourhood. Some customers may even consist of state or federal organizations who re-stock depleted natural resources.
There are customers who might want a shrimp for their aquariums or as pets. Some shrimp farms use distributors, while some might decide to let customers contact them directly, in order to expedite sales and cut the cost of the middleman. All these affect the exact amount a shrimp farm can make and the profit margin of the farm.
5. Management Style of the Farm Owner
The way a shrimp farm owner manages the livestock and farm will ultimately affect the output of the farm, and indeed the ability to state the farms exact profit.
Shrimp farm owners are expected to have a background in farming and have familiarity with basic biology of fishes. To grow the profit of the farm, their job is expected to involve some manual labour from time to time. Overseeing this type of operation, either small scale or large, will require hands-on management of the livestock.
Owners are expected to monitor the living conditions and water quality regularly. Regular water changes also help ensure good water quality, which is something shrimps need to stay healthy and keep growing.
6. Industry Experience
Having knowledge or experience in the business is very important in succeeding in this business. Understanding shrimps and how to take care of them is critical to the success and profit of any farm.
Owners are also expected to maintain positive business contacts in order to market and sell their products. Being personable and pleasant, yet shrewd in business, is necessary to continue to be profitable. It is sometimes very tempting for new entrants in the industry to feed the shrimps more food to make them get bigger faster.
All this does is add more waste to the tank’s water, since any uneaten food will break down into ammonia and could cause the water quality to drop, thereby affecting the output of the farm.
7. Farm Overhead Cost
The overhead or ongoing cost of a shrimp farm will totally depend on the size and scope of the operation, and this will dictate the amount of profit the farm can make. Average associated costs of starting and managing a shrimp farm will stem from:
- Buying juvenile shrimps for re-stock purposes.
- Food and maintenance of the shrimps.
- Replacing pumps and oxygen/aeration systems.
- Digging new ponds or buying additional tanks.
- Electricity per month.
- Plumbing maintenance.
- Insurance for employees and the business.
- Transporting/shipping of shrimps in and out of your farm.
8. Harvesting & Marketing Pattern
Note that harvesting shrimps at the right time and with right method will inversely affect the income of any farm, and indeed its profitability. Any farmer who can conduct this last stage of shrimp farming can make very good income and a substantial profit. Note that good quality, organic farm raised shrimp is in high demand and sells for top dollars around the world.
9. Choice and Availability of Aqua feeds
The availability of enough aqua feed ingredients is another major challenge to the amount of revenue a shrimp farmer can generate.
A significant amount of ingredients for aqua feeds will originate from various land-based activities like agriculture, through increased production of major current ingredients like soybeans and other crops, from processed animal by-products, and from new ingredients like bacterial products, insect meals and others.
Land-based production of feed ingredients has several important advantages over other ingredient sources, because significant planning and control is possible, and they are expandable, sustainable, responsible and certifiable.
Improving shrimp lines is now a top consideration among farmers and farmed shrimp species have much potential for further genetic improvement through a variety of old and new technologies, including traditional genetic technologies like selective breeding, genome-based genetic selection and more the advanced genome editing tools like CRISPR/Cas9 (Clustered Regularly Inter-spaced Short Palindromic Repeats) and
TALEN (Transcription activator-like effector nucleases) – all of which can lead to profits in growth rates, resistance and other desirable selection traits. Healthier shrimp are now possible in the industry through improved biosecurity, from pond to zone management.
Other areas for improvement include better pathogen detection and a better understanding of their mode of action; effective use of immunostimulants and probiotics, and even the development of vaccines now appears not so far-fetched.
The Average Profit Margin for a Shrimp Farm
According to reports, profit margins of 43 percent or higher are very possible on a single shrimp in the United States market. Especially since the cost of farming is not particularly high, but it is advised that every shrimp farmer fully invests the time required to make their shrimp very healthy and the business profitable.
Most times a 37-55 percent margin gives room for both the farmer and the retailing group to make money and generate good profits. If a large enough order comes in, a farm might even want to give further discounts.