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Financial analysis of a potential scallop culture operation in British Columbia Pugh, J. David


A financial model, developed in ASEASY AS spreadsheet software for application in shellfish aquaculture, is used to evaluate the profitability of culturing certain scallops in B.C. Growth and survival data are obtained from a project which cultured mixed populations of rock scallops (Hinnites multiruqosis), pink scallops (Chlamys rubida), and spiny scallops (Ci. hericia) . Cost data is derived from accounts of Japanese scallop culture and from examples of oyster long line culture in B.C. Product prices are estimated from Vancouver sales of fishery caught Chlamys and of east coast fresh adductor muscles. Given the estimated costs and assuming that seed is available, it is concluded that producing whole, live, 5-7 cm Chlamys and Hinnites would be profitable, assuming that Hinnites substitutes for Chlamys in this market segment. Lantern net culture, slightly more profitable than pearl net and ear hanging methods, exhibits an average annual net profit during years four and five of $72,192, based on production from one million seed per year, but the net present value is lower than that achieved by investing funds at 10% per year (compounded quarterly) for seven years. A 20% increase in selling price to $0.26/scallop results in an annual net profit greater than $100,000 for lantern net production of whole, 5-7 cm scallops, while the break even price is projected to be $0.13/scallop. Significant improvement in financial performance can be achieved by reducing labour cost, which is 33% of total costs for lantern net culture. However, doubling labour cost still does not reduce the net profit to zero. Increasing the growth rate by 175%, to approximately that of the Japanese weathervane scallop, increases the average annual profit from producing whole, 5-7 cm scallops, to $88,963. It is concluded that marketing the shucked meats of the mixed population of Chlamys and Hinnites from the above project is not profitable. From the limited data available, production of faster growing, 8-9 cm rock scallops for shucking is not profitable unless a price equivalent to $0.18/scallop is achieved. Production of 10-11 cm weathervane scallops for shucking is projected to provide a net profit of $36,981, but further delineation of financial feasibility must await data from ongoing culture projects.

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