Tilapia International Supply and Demand: How do we grow it cheaper and sell more?

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Tilapia International Supply and Demand How do
we grow it cheaper and sell more?

• Kevin FitzsimmonsUniversity of Arizona
• American Tilapia Association
• Louisville, KY
• Feb 20, 2003

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Introduction

• Review worldwide tilapia trade
• US suppliers and consumers
• Technological advances
• US production
• Opportunities to expand consumption

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Major Tilapia Producers (for year 2000)

• China - 629,182 metric tons / year
• Mexico - 102,000 mt / year
• Thailand - 100,000 mt / year
• Philippines - 92,284 mt / year
• Taiwan Province - 85,000 mt / year
• Brazil - 65,000 mt / year
• Indonesia - 50,000 mt / year

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Established market demand

• Accepted in many national dishes
• Popular in many forms (live, whole, fillets,
  fresh and frozen, smoked, sashimi, fried skins)

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US Tilapia consumption - 2002 (Jan-Nov)(117,842
mt of live weight)(259,723,000 lbs of live
weight)
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US. Tilapia imports 1993-2002
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155,371,374 (Jan-Nov 2002)
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Problem areas in US tilapia aquaculture

• High feed other production costs
• Slow growing females
• Off-flavors
• Effluents and other regulations
• Marketing to new customers
• Marketing to old customers
• Marketing, marketing, marketing

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Advances and Solutions Lowering feed costs

• Alternative ingredients
• Green systems for fry and fingerlings
• Increase volume purchases (co-operative buying)

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Advances and Solutions Slow growing females

• Methyltestosterone for sex-reversal
• Genetically male tilapia
• All male hybrids
• High density culture
• O. niloticus with larger females

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Advances and Solutions Off-flavors

• Depuration systems
• Control of blue-green algae
• Production in systems with limited access to
  benthic algae

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Advances and Solutions Effluents other
Regulations

• Integrated farming systems
• Field crop irrigation, hydroponics, golf courses

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Advances and Solutions Marketing

• Advertising
• Product placement
• Endorsements
• Co-market with big buyers

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Advertising
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Product placement

• Saving Faith
• Murder mystery
• Detective fixes elegant tilapia dinner to seduce
  the beautiful blonde.

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• Dear Kevin,
• I recently began using Tilapia fillets farm
  raised by Sea Best and distributed by Beaver
  Street Fisheries, Inc. I buy these in individual
  vacuum sealed packages in one pound bags at
  Wal-Mart in San Marcos, Texas. My husband has
  diabetes and we both are very weight conscious.
  This fish is the perfect food item for us, I love
  the way it is packaged, just use what I need for
  one meal, it is reasonably priced, always
  available in the market and consistently high
  quality. I trust you will forward these comments
  to the producer.
• I LOVE THE PRODUCT!!!!
• Marian Birnie Aug. 12, 2001

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www.tilapia.org
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Co-market with big buyers

• Provide live tanks in restaurants and grocery
  stores (Trader Joes)
• Live tanks at farmers markets
• Sell to processors along with other fish (catfish)

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Direct retail sales
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USA ? 9,000 mt

• Production in many states
• Mostly intensive systems, many recirculating
• Sales to ethnic markets as live fish, high value

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USA - Intensive tanks
Tanks in Arizona
Tanks in California
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USA - Ponds and cages
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Raceway Systems
Intensive raceways
Extensive raceways
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Intensive farms in New York and Iowa
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Intensive farms in Illinois Louisiana
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Typical prices for Tilapia products sold in the
U.S. (Feb. 2003.)
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International/US Supply and Demand TRENDS

• Supply of fillets primarily from China, Southeast
  Asia, Ecuador and Central America.
• Demand for live fish needs to expand beyond Asian
  markets
• With rapid increases in supply, demand must
  increase at least as fast to support price.

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Major Tilapia Producers in International Trade

• China - whole frozen, IQF fillets
• Ecuador - fresh fillets
• Taiwan Prov. - whole, IQF, sashimi
• Central America - fresh fillets
• Indonesia - IQF fillets
• Thailand - IQF fillets

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Current International Market Trends

• Increase in demand for all forms of tilapia
• Demand increase will be greatest for fresh
  fillets
• Prices have been constant for several years and
  will remain stable, will not increase with
  inflation.

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New recipes
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New recipes
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Changes and Predictions

• Further intensification in virtually every
  country
• Production will be 75 Oreochromis niloticus, 20
  Red strains, O. aureus and O. mossambicus mostly
  for hybridization
• Production will be 50 intensive ponds, 25
  cages, 10 intensive recirculating systems

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Changes and Predictions

• Further intensification in virtually every
  country
• Production will be 75 Oreochromis niloticus, 20
  Red strains, O. aureus and O. mossambicus mostly
  for hybridization
• Production will be 50 intensive ponds, 25
  cages, 10 intensive recirculating systems

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Changes and Predictions

• Further intensification in virtually every
  country
• Production will be 75 Oreochromis niloticus, 20
  Red strains, O. aureus and O. mossambicus mostly
  for hybridization
• Production will be 50 intensive ponds, 25
  cages, 10 intensive recirculating systems

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Changes and Predictions

• Leather goods from skin will become a significant
  contributor to profitability
• Processing and "value-adding" will intensify in
  producing countries
• Polyculture with shrimp will become common in
  most shrimp farming areas

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Changes and Predictions

• Leather goods from skin will become a significant
  contributor to profitability
• Processing and "value-adding" will intensify in
  producing countries
• Polyculture with shrimp will become common in
  most shrimp farming areas

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Changes and Predictions

• Leather goods from skin will become a significant
  contributor to profitability
• Processing and "value-adding" will intensify in
  producing countries
• Polyculture with shrimp will become common in
  most shrimp farming areas (already practiced in
  Thailand, Philippines, Mexico, US, Ecuador, Peru,
  Eritrea)

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Changes and Predictions

• US production will increase slowly, intensifying
  current production methods

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Changes and Predictions

• US production will increase slowly, intensifying
  current production methods
• World tilapia production will reach 1,500,000 mt
  in 2003 and 2,000,000 mt by 2010

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Thank you

• Reminder tilapia dinner at Lillys at 800
  tonight
• Questions ???

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Typical Chinese Farms

• 0.2 to 1.0 hectare ponds
• Often polyculture with other fish
• Sometimes have single aerator
• Family operated
• Sell to harvester

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Boxed with retailer labels

• US and European markets
• Boxed with frozen fillets or whole fish

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Marketing in China

• Most fish sold locally to restaurants
• Just beginning advertising
• Suggest product placement, inclusion in
  government food programs, value added for
  domestic markets

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Markets in Mexico
Raceway system

• Strong domestic markets on ice, fillets in
  grocery stores
• All domestic consumption - Will eventually
  develop export markets.

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Carbon monoxide

• Most plants appear to use carbon monoxide
• Some gas in chambers others infuse in bags before
  freezing

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Egypt and other Middle East

• Egypt - Production in cages, polyculture ponds
  and rice paddies.
• Israel - Intensive, center of research and
  technology transfer
• Saudi Arabia - Intensive with crop irrigation
• Jordan - Intensive

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Estimated cost of production

• China - 0.70/kg
• Philippines, Indonesia - 0.80/kg
• Brazil, Ecuador, Thailand - 0.85/kg
• Honduras, Costa Rica - 0.90/kg
• Mexico - 1.00/kg
• Taiwan Province - 1.05/kg
• US - 2.00/kg
• Canada - 2.10/kg

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Sashimi
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Fried tilapia skins