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Evaluating the Economic Profitability of Establishing an Aquaculture Research Facility. The case of Clemson University's Aquaculture Center

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  • Frierson, McCauley
  • Vassalos, Michael
  • Beecher, Lance

Abstract

According to NOAA, imports account for over 90% of the value of seafood consumed in the US. The resulting trade deficit is more than $11 billion, and is expected to increase as demand for seafood products is increasing. Aquaculture can help reduce this deficit, create jobs, and support local economies. However, currently, aquaculture is a relatively small industry in the US. Land Grant institutions can educate consumers and producers, thus helping with the development of the industry. In addition to fulfilling their educational goals, universities may also benefit economically from the development of aquaculture facilities. The present study utilizes the Net Present Value (NPV) framework with Monte Carlo simulations to evaluate the economic viability of Clemson’s Aquaculture Center. The findings indicate that even with a 25% increase in the price of catfish and tilapia, the facility will still be profitable. However, there is a likelihood that the facility will not be profitable, if the initial investment cost exceeds $1,000,000, or the price of tilapia declines to below $2.79.

Suggested Citation

  • Frierson, McCauley & Vassalos, Michael & Beecher, Lance, 2016. "Evaluating the Economic Profitability of Establishing an Aquaculture Research Facility. The case of Clemson University's Aquaculture Center," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252799, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea17:252799
    DOI: 10.22004/ag.econ.252799
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