Cultivation Tips

Reducing Production Costs, Maintaining Profit Margins

Wildan Gayuh Zulfikar
Wildan Gayuh Zulfikar
26 October 2023
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In the midst of uncertain conditions of the shrimp industry, risks related to shrimp cultivation business are not just attributed to diseases. Financial risks also threaten the existence of your business. Risks are defined as uncertain consequences that might arise from unwanted results due to incomplete knowledge.

Risks can be minimized by getting rid of threats that arise. Threats from market conditions occur due to shrimp price declines, which also cause a decrease in income from production. Increased production input price further deplete farmers of their profits.

Not only that, threats also come from production processes which impact harvest and financial losses. Production threats include unfavorable environmental conditions, equipment damage, poor fry or broodstock, disease infection, and pests. These threats increase production costs, yet the income stays unpredictable.

Production costs include all the costs associated with production processes, which in this case refers to cultivation processes. Production costs are divided into fixed and variable costs. Fixed cost for shrimp cultivation includes land rent, asset depreciation, and employee wages. Variable cost includes feed costs, agricultural production facilities, and energy (electricity and fuel).

Can costs be decreased without compromising cultivation quality? 

Reducing production costs without impacting cultivation quality can be done in several ways. The first one is based on cultivation targets, such as cultivation duration. Determining duration and production levels will affect production costs. The higher the cultivation level, the higher the costs, especially due to the variety and quantity of input required.

Cultivation levels also depend on the farm area. Production costs will be higher in larger farms. However, feed cost always remains the biggest component in variable or operational costs, contributing to 60% of total operational costs.

Comprehensive management when it comes to feed is crucial, consisting of choosing high-quality feed, efficient feeding, and health maintenance of shrimp, which altogether will increase feed efficiency and result in better economic profitability from the harvested shrimp. Implementing good feed management hugely contributes to efficient production costs.

The next aspect is energy. Energy costs increase when running cultivations, as much electricity is required. Aeration should be constantly running, and this requirement increases together with stocking density. The use of high-quality aerators with high energy efficiency can reduce production costs without compromising with the supply of sufficient oxygen for shrimp.

Reducing production costs begins during planning

To maintain economic efficiency in shrimp farms, using high-quality fry is recommended, together with the application of methods that minimize chemical costs, monitor spread of diseases, fix energy usage, and manage cultivations better. Not only that, determine the cultivation intensification by reflecting on your capacity.

A high stocking density causes the risks to increase as well. The risk of income loss subsequently increases. To solve this, decrease the stocking density or implement shorter cultivation, which helps improve energy efficiency levels. Healthy shrimp growth, feed efficiency, and absence of disease infections also improve energy efficiency from the aerators.

The pond size as well as farmer and technician experience also positively impacts financial efficiency in the shrimp farm business. Employees with adequate knowledge and experience in production play an important role in reducing production risks.


Examining energy use in shrimp farming | Responsible Seafood Advocate
Kam, L. E. and P. Leung. 2008. Financial Risk Analysis in Aquaculture. In M.G BondadReantaso, J. R. Arthur and R. P. Subasinghe (eds). Understanding and applying risk analysis in aquaculture. FAO Fisheries and Aquaculture Technical Paper. No. 519. Rome, FAO. pp. 153–207.
Nguyen, K. A. T., T. A. T. Nguyen, C. Jolly, and B. M. Nguelifack. 2020. Economic Efficiency of Extensive and Intensive Shrimp Production under Conditions of Disease and Natural Disaster Riks in Khanh Hoa and Tra Vinh Provinces, Vietnam. Sustainability, 12: 1-19. doi:10.3390/su12052140
Strategies to improve feed efficiency in shrimp farming | Alltech
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