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

Introduction

Review worldwide tilapia tradeUS suppliers and consumersTechnological advances US productionOpportunities to expand consumption

World Tilapia Production in 2001

China46%

Taiwan Prov.7%

Philippines7%

Thailand7%

Mexico7%

Others4%

Indonesia4%

Costa Rica1%

Colombia2%

United States1%

Brasil5%

Egypt4%

Cuba3%

Ecuador2%

Major Tilapia Producers (for year 2000)

China - 629,182 metric tons / yearMexico - 102,000 mt / yearThailand - 100,000 mt / yearPhilippines - 92,284 mt / yearTaiwan Province - 85,000 mt / yearBrazil - 65,000 mt / year Indonesia - 50,000 mt / year

Established market demandAccepted in many national dishesPopular in many forms (live,

whole, fillets, fresh and frozen, smoked, sashimi, fried skins)

US Tilapia consumption - 2002 (Jan-Nov)(117,842 mt of live weight)

(259,723,000 lbs of live weight)

0

20,000

40,000

60,000

80,000

100,000

120,000

Met

ric

tons

1986

1988

1990

1992

1994

1996

1998

2000

2002

US Tilapia supply (Jan-Nov 2002) 259,723,000 lbs (live weight)

CHINA29%

ECUADOR16%

INDONESIA6%

TAIWAN Prov.25%

HONDURAS7%

COSTA RICA7%

Brazil0%

US8% OTHER

2%

US. Tilapia imports 1993-2002Sources of imported tilapia to US

0

20000

40000

60000

80000

100000

120000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

(LW

E in

met

ric to

ns)

others

Thailand

Indonesia

Colombia

China

Mexico

Jamaica

Ecuador

Costa Rica

Taiw an

Value of Tilapia product forms imported to the U.S. through Nov. 2002

Fillet Fresh

Fillet Frozen

Whole Frozen

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

$180,000,000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

$ U

S Whole Frozen

Fillet Frozen

Fillet Fresh

$155,371,374 (Jan-Nov 2002)

Problem areas in US tilapia aquaculture

High feed & other production costsSlow growing femalesOff-flavorsEffluents and other regulationsMarketing to new customersMarketing to old customersMarketing, marketing, marketing

Advances and Solutions: Lowering feed costs

Alternative ingredientsGreen systems for fry and

fingerlingsIncrease volume purchases (co-

operative buying)

Advances and Solutions: Slow growing females

Methyltestosterone for sex-reversalGenetically male tilapia All male hybridsHigh density cultureO. niloticus with larger females

Advances and Solutions: Off-flavors

Depuration systemsControl of blue-green algaeProduction in systems with limited

access to benthic algae

Advances and Solutions: Effluents & other Regulations Integrated farming systemsField crop irrigation, hydroponics, golf courses

Advances and Solutions: Marketing

AdvertisingProduct placementEndorsementsCo-market with big buyers

Advertising

Product placement

“Saving Faith” Murder mystery Detective fixes elegant tilapia dinner to

seduce the beautiful blonde.

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

www.tilapia.org

Co-market with big buyers Provide live tanks in restaurants and

grocery stores (Trader Joe’s) Live tanks at farmers markets Sell to processors along with other fish

(catfish)

Direct retail sales

USA 9,000 mt

Production in many states Mostly intensive systems, many

recirculating Sales to ethnic markets as live fish, high

value

USA - Intensive tanks

Tanks in Arizona

Tanks in California

USA - Ponds and cages

Raceway Systems

Intensive raceways

Extensive raceways

Intensive farms in New York and Iowa

Intensive farms in Illinois & Louisiana

Typical prices for Tilapia products sold in the U.S. (Feb. 2003.)

Pond-side/Processor

$/kg

Wholesale$/kg

Retail$/kg

Whole live fish 2.20 - 6.60 2.80 - 7.50 4.00 - 10.00Whole frozenfish

1.10 - 2.00 2.00 - 2.35 2.20 - 5.00

Whole freshfish

2.30 - 3.00 3.00 - 4.00 4.00 - 9.00

Fillets, fresh 5.00 - 7.00 6.00 - 8.00 8.00 - 12.00Fillets, frozen 4.80 - 6.75 5.50 - 7.80 7.00 - 11.50

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.

Major Tilapia Producers in International Trade

China - whole frozen, IQF filletsEcuador - fresh filletsTaiwan Prov. - whole, IQF, sashimiCentral America - fresh filletsIndonesia - IQF filletsThailand - IQF fillets

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.

New recipes

New recipes

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

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

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

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

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

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)

Changes and Predictions

US production will increase slowly, intensifying current production methods

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

Thank you Reminder: tilapia dinner at

Lilly’s at 8:00 tonightQuestions ???

Typical Chinese Farms0.2 to 1.0 hectare

pondsOften polyculture

with other fishSometimes have

single aeratorFamily operatedSell to harvester

Boxed with retailer labels US and European

markets Boxed with frozen

fillets or whole fish

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

Markets in Mexico

Strong domestic markets; on ice, fillets in grocery stores

All domestic consumption - Will eventually develop export markets.

Raceway system

Carbon monoxide Most plants appear to

use carbon monoxide Some gas in chambers

others infuse in bags before freezing

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

Estimated cost of productionChina - $0.70/kgPhilippines, Indonesia - $0.80/kgBrazil, Ecuador, Thailand - $0.85/kgHonduras, Costa Rica - $0.90/kgMexico - $1.00/kgTaiwan Province - $1.05/kgUS - $2.00/kgCanada - $2.10/kg

Sashimi

Fried tilapia skins