Shrimp farming taking off in the US

After a long fallow period, commercial-scale shrimp farming appears to be taking off in the United States.

For years, the U.S. shrimp-farming sector has struggled to compete against low-cost shrimp imported from mega-producing nations including India, Indonesia, and Ecuador. But buoyed by consumption figures showing shrimp is pulling away as America’s favorite type of seafood – with the National Oceanic and Atmospheric Administration (NOAA) reporting the average American ate more than five pounds of shrimp annually in 2020 – new shrimp-farming projects of all shapes and sizes are cropping up across the country, from small and large recirculating aquaculture systems (RAS) in California and Florida to traditional pond aquaculture in Texas.

Perhaps making the biggest waves in shrimp aquaculture in 2022 was Atarraya, a start-up tech company based in Mexico City, Mexico, known for developing the Shrimpbox. Essentially a shipping container that has been converted into a small commercial shrimp farm, the Shrimpbox requires minimal water exchange and contains an automated feeding system and biofloc waste-removal system, minimizing the work involved in farming shrimp in the unit while eliminating the need for using antibiotics and chemicals. It also relies on artificial intelligence that can remotely monitor water quality and regulate water temperature and oxygenation.

“Shrimpbox is more than a cargo container. It is a technological system designed to create life,” Atarraya Founder and CEO Daniel Russek said. “With automated systems and software capable of learning and making decisions, this piece of engineering has the potential to help aquaculture take its biggest step forward in decades.”

Even though only two prototypes have been built thus far, Atarraya has raised more than USD 10 million (EUR 9.16 million) since it was founded, including funding from some high-profile tech investors. The company’s first farm, based in Indianapolis, Indiana, U.S.A., recently opened for training and demonstration, in partnership with the Indiana Economic Development Corporation. And Atarraya is preparing to launch an early- adopter program to include companies in niche markets as it seeks to maximize early returns and prove that practically anyone can become a shrimp farmer.

“The main benefit for them is that Shrimpbox is very easy to operate. They don’t need to learn aquaculture, just how to maintain the Shrimpbox. We think of it like a big Tamagotchi,” Atarraya Marketing Manager Mariana Madrigal said. “After these first adopters, we will turn to farmers in different industries like hog, poultry, and crops. We want Shrimpbox to be an attractive alternative for income and farm diversification.”

Homegrown Shrimp, a RAS shrimp farm being developed by Bangkok, Thailand-based food giant Charoen Pokphand Foods (CP Foods) in Indiantown, Florida, U.S.A., is taking a radically different approach than Atarraya. With a pilot farm now in operation, CP Foods eventually wants to grow homegrown shrimp so that it operates a hatchery and farm capable of producing up to 720 metric tons of the species annually.

CP Foods Executive Vice President Robins McIntosh said the COVID-19 crisis caused an “unprecedented disruption in the global food supply chain,” prompting a reduction in international trade in shrimp and forcing countries to rely on their own domestic production to fulfill demand.

McIntosh said he believes this shift has been leading to countries increasing trade barriers to protect their domestic markets, opening up an opportunity to feed Americans with “home-grown” shrimp.

“Our objective is to provide local markets with the highest quality fresh shrimp year-round using a near-zero water exchange system,” McIntosh said. “In addition to shrimp for consumption, we will be operating a small hatchery to supply post larvae to the U.S.A. and European markets.”

In the U.S. shrimp-growing hub of Texas, Trans American Aquaculture is seeking to rehabilitate and reactivate an 1,880-acre shrimp farm shuttered for more than a decade. Located in Rio Hondo, Texas, U.S.A. in the Rio Grande Valley, the farm was purchased in 2017 by the Granda family – transplants from Ecuador with a long history in shrimp farming. According to Trans American Chairman and CEO Adam Thomas, who is married to a member of the Granda family, the company is now looking for funding to convert the purchase from its current set-up as a shrimp genetics research facility into a commercially- productive farm.

“Where we are in the southernmost part of Texas, we’re able to do two full cycles of shrimp harvests per year. We’re in our fifth and sixth generations of genetic lines right now. We feel it’s really a good time for us to start to tap into the public markets to get the funding for the growth that we’re looking to achieve over the next few years to really take the farm into full-bore production,” Thomas said.

To facilitate its public listing, Trans American conducted a reverse merger with a publicly traded company, allowing it to tap into a larger source of funding. Thomas said the company is seeking an initial USD 2 million (EUR 1.9 million) investment that will see it through its first harvest on half of the farm’s acreage. From there, the firm will need another USD 5 million (EUR 4.6 million) to expand into the southern 650 acres of the farm and complete intensification and equipment upgrades. That should get the farm to 11 million to 12 million pounds of production annually, Thomas said.

“I can sell [our total estimated production] to any of a number of distributors. I’ve had contacts who have said that they will buy everything we have up to two million pounds – that’s been two independent distributors. So that gave us confidence to go full-bore on this project,” Thomas said. “With HEB specifically, you say it’s from Texas and they want it. I think they’ll buy pretty much all the farmed shrimp that they can get their hands from the state of Texas. With Whole Foods, it’s a step above in terms of quality, but that’s a potential opportunity as well, because we use [Best Aquaculture Practices-certified] feed from Cargill and there’s no live animal products in it.”

Jim Wyban, a shrimp researcher and owner of Kurtistown, Hawaii, U.S.A.- based consultancy Marine Genetics LLC, is bullish on the future of the U.S. shrimp industry.

“The big thing that’s happening right now that’s interesting to me is an increase in indoor, controlled environment, high-density shrimp aquaculture. There are quite a few people doing that in the United States in all kinds of crazy places – Illinois and Iowa and Minnesota. I haven’t seen anybody compile a list, but it’s somewhere around 50 projects in the United States operating at various levels where people are farm-raising marine shrimp in some sort of tank-based indoor system,” he said.

There’s a solid economic foundation to the idea that shrimp farming can succeed in the U.S., Wyban said.

“The U.S. market for shrimp is almost insatiable. The argument can be made that if you farm-raise the animals closer to the big markets, you’ll eliminate the carbon footprint from global shipping and can deliver a fresh product to these local markets. There are a lot of people trying to do that – but to date, very few of them have cracked the code of how to do that and scale it,” he said. “They may be able to do four little tanks of shrimp and sell them at a farmer’s market for USD 20 [EUR 18] a pound to their community and that works, but the larger market is not going to pay those kinds of prices. They’ll have to come closer to the price of the obvious competition, which is imported shrimp from the global supply. There’s a sort of tension there between which of these small or not-so-small projects is going to break through and actually crack the code of that intensive, controlled-environment style farming to service the much larger market in the United States – a couple billion pounds a year in consumption.”

Wyban noted that the varied shrimp-farming start-ups cropping up around the country are evidence to him technology now exists to make a domestic industry feasible.

“There’s no question that these companies can do the production, [with the] kind of state-of-the-art production ... being done in lots of places,” Wyban said. “But the economics of it is the fundamental question. People are starting to invest in this space, but the economics of it all remains to be seen. The RAS technology has not really been proven at scale, both technically and economically. It will be very interesting to watch this unfold, but we’re on the brink of it. I believe someone will crack that code soon.” 

Photo courtesy of Shutterstock/P Maxwell Photography