Economic analysis of off-bottom oyster culture

Abstract

We analyze costs, break-even prices, and profits for multiple scales of operation of an off-bottom oyster culture operation, ranging from 27,000 oysters planted on half an acre to 1.28 million oysters planted on four acres. The analysis focuses on the first five years of operation and accounts for factors such as operation startup, periodic adverse environmental conditions, variations in stocking and mortality rates, method of sale, and price to grower. We estimate total annual cost, including depreciation and interest on invested capital, labor, fuel, seed, and other expenses, to range from approximately $50,000 to operate a single line of floating bags to approximately $250,000 to operate twenty-four lines. We estimate the five-year average break-even price to range from $2.57 per oyster for 40,000 oysters planted on half an acre, to $0.71 per oyster for 480,000 oysters planted on two acres, to $0.52 per oyster for 960,000 oysters planted on four acres. Consistent with previous findings, we find that the average small-scale operation is not expected to be profitable. We estimate that it is generally necessary to operate at or above levels of 720,000 oysters planted on three acres to realize a positive average annual profit.

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