Land-based salmon: Big plans, big money

Land-based salmon farming -- is it the future?

No need to wait for the future -- it is already here. But despite what some NGOs and open net-pen haters would have you think, land-based salmon production has plenty of challenges to overcome to boast production levels anywhere near what comes from the world’s net pens right now.

What was clear after the first day of the event is that the technology being employed to grow fish in tanks on land and in other closed-containment recirculating aquaculture systems (RAS) is out of this world.

It is extremely sophisticated science that, at least at this point, leaves little margin for error on the part of the farm operator.

Nevertheless, the technology is advancing by leaps and bounds, and every advance solves another challenge facing the fledgling industry.

To understand RAS farming you need to make the distinction between that which seeks to grow fish full term -- from smolt to market-ready salmon -- and that which seeks to grow just salmon smolt. The latter approach is exploding. The big net-pen salmon farmers -- Marine Harvest, Cermaq and many others -- are investing millions and are seeing success.

They use the technology as a complement to their well-established net-pen operations around the world.

"We want to reduce number of days salmon spend at sea, so we invest in RAS to grow the smolt larger before they go to sea,” explained Trond Rosten of Marine Harvest.

But make no mistake, despite massive investments in building RAS smolt facilities, the salmon farming giants are committed to net pens right now; they aren't looking to replace net-pens with post-smolt operations.

“Net pens remain the most important technology,” said Rosten.

The use of RAS to raise smolts helps alleviate some of the most pressing problems facing net-pen farmers. By growing the smolts larger before transferring them to sea cages, costs of production can be lowered by reducing treatments for lice and disease, said Frode Mathisen of Grieg Seafood.

Raising salmon through the fish’s entire life cycle to market size in commercially significant volumes is where RAS enthusiasts dream of going. Globally, production is around 10,000 metric tons, compared to the more than 2 million metric tons produced by net pens – so there is a long way to go.

Plenty of folks are watching Johan Andreasssen and his Atlantic Sapphire land-based salmon farming ambitions.

The company is in the midst of building a massive commercial-scale RAS salmon farm in Florida, south of Miami.

It is developing a fully integrated production unit, with hatchery, growout, feed production and processing. In phases one and two, the company will produce 10,000 metric tons and 30,000 metric tons, respectively, and by phase three it plans on churning out 90,000 metric tons annually.

The land-based concept to be employed at the Florida facility was piloted and tested at the company’s Danish land-based supplier Langsand Laks, which is owned by Atlantic Sapphire A/S in Norway.

The company checks many of the boxes that investors in the sector look for: it has an experienced management team, proven technology and an established water supply infrastructure, among others.

By having the facility in the United States, the company can avoid the substantial cost of air freighting fish around the world and expenses associated with disease and other issues challenging net-pen farmers, he said.

Kuterra in British Columbia is commercially producing around 3,000 tons and actively selling it into the market with the help of its marketing partner Albion Farm and Fish. So, the concept is working. It just needs scale – and as far as I can tell lots of money.

In 2012, a study pinned the volume of farmed salmon production in Norway at 5 million metric tons annually by 2050, Jelena Kolarevic of NOFIMA said. Current production from Norway is around 1.3 million metric tons.

At the time of the release of that projection, however, Norway’s production had been steadily growing every year, Kolarevic said. Since then, however, growth has slowed, leading some to wonder if that 5 million metric-ton level is truly attainable.

A new report from PricewaterhouseCoopers (PwC) dials back the 2050 projection to around 3.3 million metric tons, she said. The report, however, also provided an optimistic production projection in the 5 million metric ton range. If Norway is to hit the optimistic forecast, though, it will need on-land production of 1 million metric tons, PwC estimated.

All indications are that salmon demand will continue to grow and there are real limits on how much can be supplied by open net pens. Will land-based farms fill the gap? Maybe, but there are still lots of challenges that won't be solved overnight or without plenty of money.