Cargill is casting its line into the aquaculture industry. The U.S. food giant recently announced its $1.5 billion acquisition of Norwegian salmon-feed supplier EWOS and a $30 million joint venture with Ecuadorian shrimp producer Naturisa to build a shrimp feed facility.
Around the world, aquaculture has been driven by supply challenges created by population growth and overfishing. The industry has had to advance quickly. Output for food production from aquaculture has surpassed that of wild capture fisheries — more than 50 percent of seafood imported into the U.S. is farm-raised.
Likewise, fish feed has come a long way. In 2003, WWF said that 4kg of wild-caught fish were needed to produce 1kg of farmed fish, but by 2010, the feed conversion rate fell to 1.4kg of feed to 1kg of farmed fish. Today, many farms report using 1kg or less of wild fish for each kilogram of salmon produced; feeds use vegetable meal and oils as supplements. Feed has always been the biggest cost for fish producers, and contributes 60% of costs in the salmon sector.
As WWF aquaculture expert Piers Hart recently told the Guardian, salmon farming has the “most efficient animal feed in the world.” He believes Cargill’s real interest is in the expertise in improving feed efficiency.
“I don’t think [Cargill] is seeing much growth in salmon, where expansion and production costs are high. It wants to transfer the [feed] technology to other sectors, such as tilapia and its poultry business,” Hart said.
If this is the case, Cargill may be headed into battles of ethics and sustainability. The poultry business is no stranger to ethical dilemmas, and caged salmon have been called the “battery hens of the sea.” To cut costs, some aquaculture farms overstock tanks, which forces the use of chemicals, antibiotics and the like. The seafood industry also struggles with modern-day slavery on its fishing boats and behind the palm oil that goes into fish feed.
Still, if Cargill could apply the lessons from the feed conversion rate improvements seen with salmon to its poultry or other animals, it could see significant cost savings. In an ideal world, the company could put the savings towards initiatives to improve the ethical and sustainability performance of its products. Perhaps the company will borrow ideas from others in the industry, such as those running carbon- neutral or even carbon-negative aquaculture farms
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Published Sep 8, 2015 4pm EDT / 1pm PDT / 9pm BST / 10pm CEST