|Langston University Aquaculture|
Marketing Fish In Oklahoma
By Kenneth Williams
MARKETING IS TOO often an overlooked aspect of commercial fish farming. Without adequate attention to marketing strategy, even the most efficient fish production may not be financially profitable. Several marketing possibilities exist for the Oklahoma fish producer. Wholesale marketing to a fish processing plant is often the first market explored, however, this is usually not the most profitable market for small-scale or diversified fish farms. Enterprise budgets based on new pond construction indicate 40 acres of ponds may produce a net pre-tax income of about $21,000 dollars. Other options include selling live or processed fish to restaurants, grocers, ethnic markets, and live for pond stocking or fee fishing. Finding markets for fish is often confusing for the beginning fish culturist but with careful investigation and an understanding of market requirements, a marketing plan can be developed that fits producer needs.
It is much more profitable to determine market demand and plan production accordingly. Raising a crop of fish first and then looking for places to sell it can result in low or no profit. To determine possible markets begin with an inventory of your operation. Ask yourself the following questions:
Determining a potential niche market for your enterprise may seem a daunting task. It can be made easier by developing a network of contacts. Begin by calling a state aquaculture extension specialist or a state Aquaculture Association. Find out when meetings are held and plan to attend even if you are not currently producing fish. Introduce yourself and get to know other producers. They often know of markets or outlets for fish that they are unable or do not choose to service. Get to know what other fish farmers are raising and why they are producing certain species. Each fish farm is unique, but, you may find similarities between your enterprise and that of others. Find out what has not been successful in your area and what were the causes of the failures. Learn from others' mistakes. Do not repeat them.
After speaking with other producers and extension specialists, it may be desirable to conduct a survey of potential customers in the area. Telephone surveys are the easiest and fastest method to estimate a market, however, personal interviews with possible buyers will get more accurate results and more detailed information.
When conducting telephone surveys keep questions brief and to the point. Most people will be occupied with their business and not have time for detailed discussions. Try to call during slow times. Prepare a list of questions before calling and write down information as it is received. Questions to consider include:
When conducting personal interviews with prospective buyers it is important to present yourself in a professional, business-like manner. Dress neatly, and conduct yourself in a courteous, pleasant and sincere manner. After each interview write down important information. Most successful marketers also take genuine interest in their customers. Remember the names of your contacts. Before ending telephone or personal interviews always ask if the potential client knows of other people interested in your product. This information can often lead to previously unknown sources of potential sales.
Aquaculture is highly competitive. Know sources of competition well, before beginning production. Calculate your cost of production as closely as possible to determine if you can sell fish at a competitive price and maintain adequate profitability. If you can't demonstrate profitability with an enterprise budget then you are not likely to produce income when the fish are marketed. Carefully work out costs and returns on paper before committing to production.
Competitive pricing is the method usually used to market aquaculture products. The competitive price is the price most producers receive for their product. This price can be determined by contacting buyers and other aquaculture producers that service your potential market.
The cost plus method of determining a price is calculated by adding a required level of profit to the cost of production. Cost per unit of production must be accurately known for this method to be successful.
Contact fish processing plants in the region. Ask for the plant manager and discuss their criteria for purchasing fish. Questions to ask include: What species of fish are purchased? What size of fish are required? Are fish picked up by the plant or must they be delivered? When and how often are fish purchased? When and how often are fish flavor tested? Are purchasing contracts available? Are harvesting crews available?
Selling fish to a processing plant is usually the least profitable means of moving fish. Direct retailing to niche markets produces the greatest returns to the fish farmer.
Niche markets for food fish
Each niche market has unique characteristics, however, niche markets such as small grocers, ethnic markets and restaurants share some common features.
Retail marketing of food fish requires:
These requirements will result in increased transportation costs for the producer. Harvesting frequency will be increased; also, fish holding and grading facilities will be needed.
Monthly fish sale economics
Based on sales of 1,000 lb per month and a sale price of $1.25 per lb of fish.
Gross returns: $1,250
Fish production $0.50/lb (can range to$0.65/lb)
1,000 lb of production @ $0.50/lb $500
Transportation $ 50
Total variable cost $678
Itinerant merchants license $ 8.33
Sales tax permit $ 4.17
Liability insurance $35.33
Total fixed costs $47.83
Total production cost $725.83
Net return to producer $524.17
With more frequent sales and several sale locations, production and profits can be increased.
Fingerling production continues to provide a successful market for many species of fish. Fingerlings may be produced for food fish production or farm pond stocking. Food fish fingerling producers may specialize in one species of fish such as channel catfish, or offer more variety. Producers of food fish fingerlings market relatively large quantities of graded fish to commercial fish farms. Vehicles capable of transporting large quantities of fingerlings are usually needed and fish may be hauled long distances. Tanks for holding several sizes of graded fish are needed on the farm. A water supply for tanks and ponds are also needed. A minimum water flow rate of 25 gallons per minute per acre of pond is adequate. Usually, large quantities of fish are sold to a relatively small number of commercial fish farmers. Advertising in national commercial aquaculture trade magazines, promotional information, and displays at state aquaculture conventions are good means of contacting potential buyers.
A large market exists for fish to stock recreational fishing ponds. Common species include: largemouth bass, bluegill, hybrid bluegill, fathead minnows, channel catfish and grass carp. Marketing is usually to individual pond owners. Relatively small quantities of one or more species are sold. Fish are sold from the farm or delivered to the pond. Fish hauling equipment can be small enough to fit in a standard pickup. Ponds and holding tanks for several species of fish must be available. Advertising in rural newspapers and state farm magazines is a good way to promote the enterprise. "Word of mouth" also becomes important when marketing fish in local areas.
Fee fishing enterprises are most profitable within 30 miles of a large population center . A fee fishing enterprise demands the ability to deal with the public on a daily basis. Fish weighing at least one pound are usually purchased from a commercial fish farmer or fish distributor. Income is derived from sale of fish, refreshments and processing. The best marketing tool for this enterprise is "word of mouth" from satisfied customers. Radio and newspaper advertisements are effective for introducing the new business. Promotions or special weekend and holiday prices help keep the operation visible to the public. Advertising targeted to group outings such as company picnics, church socials and civic clubs can be profitable.
Successful marketing requires careful planning based on factual information.
Surveys and above all, personal contact with potential buyers and other producers will provide the information needed to analyze potential markets. Making the best match of prevailing market conditions, fish culture potential of the farm, and personal preferences will optimize the possibility of a profitable fish culture enterprise.
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