Economic analysis of Nile tilapia (Oreochromis niloticus) production based on farm size and number of rearing tanks

Ahmed Burad-Méndez, Roger Domínguez-May, Miguel A. Olvera-Novoa, Daniel Robledo, Silvia Salas

Submited: 2023-03-29 17:51:02 | Published: 2023-10-31 21:22:21

DOI: https://doi.org/10.3856/vol51-issue5-fulltext-3071

Abstract


This study evaluated the scale effect of the production, investment, and profitability of tilapia Oreochromis niloticus farming through benefit/cost ratio (B/C), the average and marginal return on investment (ROI), net present value (NPV) and the internal rate of return (IRR). The financial return of the annual production based on the number of grow-out tanks was considered a decision criterion for the size or scale to invest in or expand a tilapia aquaculture farm. The model considered two yearly rearing cycles with a density of 35 fish m-3 and a mortality rate of 5%. HDPE liner tanks of 16 m in diameter with a volume of 212 m3 were used as the unit of scale in an outdoor intensive system. The simulation model determined that the farm sizes of 32, 48, 64, and 80 tanks with IRR values of 78, 94, 104, and 111%, respectively, had the highest economic efficiency considering the economic model criteria proposed in this study. Increasing returns to scale were evidenced in farm sizes from 1 to 30 tanks, with a tendency for constant returns to scale in sizes greater than 30. The most indicative scale effect was observed when increasing from 32 to 48 tanks, with a change of -1.5% in the average cost of production, -13.9% in the unit investment cost, 63% in NPV, and 21.1% in IRR. It is recommended to first invest in a system of 32 grow-out tanks and further increase the production scale to 48 tanks to improve the industry's profitability.

Burad-Méndez A, Domínguez-May R, Olvera-Novoa M, Robledo D, Salas S. Economic analysis of Nile tilapia (Oreochromis niloticus) production based on farm size and number of rearing tanks. Lat. Am. J. Aquat. Res.. 2023;51(5): 747-759. Available from: doi:10.3856/vol51-issue5-fulltext-3071 [Accessed 3 Dec. 2023].
Burad-Méndez, A., Domínguez-May, R., Olvera-Novoa, M., Robledo, D., & Salas, S. (2023). Economic analysis of Nile tilapia (Oreochromis niloticus) production based on farm size and number of rearing tanks. Latin American Journal of Aquatic Research, 51(5), 747-759. doi:http://dx.doi.org/10.3856/vol51-issue5-fulltext-3071