Economies of scale for juvenile production of common snook (Centropomus undecimalis Bloch)

Abstract

Construction and operating costs for three common snook (Centropomus undecimalis) hatcheries in Florida, USA, are illustrated. Hypothetical capacities and targets of the three hatcheries (Scenarios I, II and III respectively) were 615, 000 juveniles (8 ‐ 10 g in weight) for stock enhancement, and 1, 275, 000 and 3, 000, 000 juveniles (1‐g in weight) for commercial grow‐out. Estimated production costs were lower than for many marine finfish species. The 20‐year mean costs per 1, 000 juveniles were estimated to be $324, $215, and $159, for hatcheries I, II, and III respectively, and the initial capital investments were $731, 660, $1, 162, 460, and $1, 896, 0301, respectively. Major cost items of annual production were labor (22 ‐ 33%), supplies (14 ‐ 20%), fixed costs (15 ‐ 17%), and interest (13 ‐ 15%). The most profitable hatchery was the 3 million 1‐g juvenile hatchery due to the hatchery size effect, with a net present value (NPV) of $1, 760, 000, an internal rate of return (ERR) of 81%, a payback period of 3.6 years, and a profitability index of $2.86 for every dollar invested. Possible cost reductions to increase financial profitability were discussed.