Monday April 14, 2014

My goal for the week is to get together all of my start up costs and assign in a budget I will set up.  I got a lot of information from Scotty on Friday, so I decided to split it up.  Today I will be talking about the rest of our conversation.

Scotty has been in the aquaculture business for a little more than a decade and is a veritable fountain of information.  In the short time I spent talking with him (short being and hour and a half), he was able to give me more information than I had been able to gather after my entire spring break.  He was very frank with me: “it’s a really rough business to be in and requires A LOT of work and time.”  (This was something he often repeated.  But despite the tiredness with which he said these words, I also got a sense, when he spoke about his farm, that he was profoundly proud of his work.)  Scotty most importantly gave me a lot of facts and figures, which has been extremely helpful in figuring out my start-up costs.

Scotty has invested around $50,000 in his business (chains, bags, boat, outboard, etc.).  Scotty had a grant in Marion that is a ½ acre.  (In Marion grants do not exceed ½ an acre.)  On it he has a floating bag system that grows around 750,000 oysters.  (According to him, every 300,000 oysters you need to hire another person.  Which indicates he has 3 other people working with him during the busy season, which is summer.) He arranges the bags on a ladder type system, where the rungs indicate the size of the oysters.  (See picture of his layout.)

He said that he used to order 1.5mm sized seed, but he decided that it was too small and he was loosing oysters, so now he orders 2.0mm size seed.  His seed is disease resistant seed, which can bring down the mortality to 10-20%.  (Since mortality is so high, some growers will use the “fudge factor” and order 20% more seed to cover their losses.  This is an option that I am curious about and will have to calculate.)  One can order seed from hatcheries, and it is usually done by quantity, so from 10,000 to 10,000,000 oyster seeds.  Scotty told me that his first year he ordered 50,000 oyster seed, every year since then he has ordered 200,000.

From each batch, you can expect a 30% mortality rate (yes, it is really high) and 30% to reach market size in 18 months.  3 inches is market size for the half shell market.  There is also a shucked, petite, and jumbo market.  Shucked oysters are solely the meat of the oyster and it is priced by weight.  Petites are 2 inches rather than 3 and they are considered to be a better quality oyster since the meat is sweeter and silkier.  Petites are not sold in MA, however they are sold in all of the surrounding states.  Therefore, MA has created a permit that allows farmers to petites to other states, so they will not feel cheated.  Jumbos are larger than 3.5 inches and are usually bought for soups or stews.

Obviously this is a lot of information, and honestly it took me a while to ingest.  Once I did, I was really excited.  Having actual numbers and being able to apply them is really great, and now I have some parameters as I sort out the costs in my business plan.