Iowa is poised to capitalize on the burgeoning demand for farm-raised fish, experts said last week at an aquaculture conference sponsored by the Coalition to Support Iowa’s Farmers (CSIF).

"I think a lot of folks want a story to go along with their dinner," said Keith Driver, president of VeroBlue Farms in Webster City. "I think the story for aquaculture is just coming into its prime."

However, the opportunities are tempered with challenges, especially in terms of marketing, business experts cautioned. Iowa farmers noted that consumers here are still price-sensitive, despite a growing interest in local food production.

"There’s a big opportunity here," said Bridget Owen, executive director of the Soy Aquaculture Alliance. "The sky is the limit, but I would caution the market is also the limit. Paying attention to your market needs, and what it’s willing to pay for, is critical."

Aquaculture has been around in Iowa for more than two decades, but interest is soaring as a number of factors converge to suggest the time is right for significant industry expansion. The CSIF Aquaculture Conference attracted more than 200 attendees, including a mix of farmers who are already raising fish and others who are exploring an opportunity to diversify their farms.

"We’re excited about the opportunities that aquaculture presents to diversify agriculture in the state of Iowa," said Iowa Deputy Secretary of Agriculture Mike Naig. "There’s a lot of room on the American customer’s plate to increase the amount of seafood consumed. We think we’re very well-positioned to serve that market from the Heartland."

A lot to learn

However, experts cautioned raising fish isn’t as easy as filling up tanks with water and adding fish. It takes significant investment, a steep learning curve in production techniques, a solid marketing plan and compliance with numerous rules and regulations, among other things, before diving into business.

That’s where CSIF can help farmers who are considering aquaculture, as well as raising other livestock species, said CSIF Executive Director Brian Waddingham. He said the coalition, which offers free, confidential assistance to farmers across the state, has received an uptick in calls from farmers considering aquaculture as a way to diversify or bring children back to the farm.

"We’re telling folks don’t just go build something, because odds are there are rules and regulations attached that are going to have an impact on your farm," he said.

The aquaculture industry is experiencing the growing pains associated with any fledging industry, said Dan Burden, a value-added agriculture specialist at Iowa State University. Farmers are hesitant to make investments in production until processing and marketing outlets are established, but processors won’t build facilities until there is a consistent and reliable supply of fish, he explained.

"We’re in that chicken-or-egg stage right now," he said.

Some farmers, like Sherill Ryan of Ridgeway, have begun raising fish or shrimp and are handling marketing to restaurants or consumers on their own. The effort has required a lot of learning as they continue to tweak their facilities to optimize production, she said.

"When we started, there wasn’t a lot of information out there for inland fish farmers," said Ryan, who operates Sherlock Shrimp with her husband. "The thing I think is really important is you have to find people to work with who know what they’re doing."

At the other end of the spectrum, farms like VeroBlue of Webster City are building larger, integrated systems backed by investors. VeroBlue aims to increase its production of barramundi to 7.2 million pounds annually to go along with a processing, packaging and training facility in Webster City. It eventually hopes to expand production through local independent growers as well, Driver said.

"One of the challenges historically has been scale," said Driver. "You can be small or you can be large, but there is a chasm. No restaurant is going to menu your item unless you can produce it every week or every two weeks."

Working together

Cooperatives could help independent farmers reach the scale needed to be a reliable supplier, said Bill Lynch of Millcreek Perch Farms in Ohio.

"Small family farms are not really positioned to grow the food fish industry because they lack the production to meet client needs," he said. "That’s why you see some companies getting big very quick, because they’re trying to realize the economies of scale."

Cooperatives could help small farmers overcome challenges associated with feed costs, fingerling availability, processing, marketing and grower learning, Lynch said. For example, Lynch said he reduced his feed costs by 27 percent by partnering with five other nearby fish farms.

But for fish farms to succeed, they have to overcome the notion that they’re competing with each other, he said. At this point, fish farmers are competing for market share against other protein sources, he said.

The lack of cooperation causes many start-up fish farmers to fail because they aren’t learning from the mistakes of others, Lynch said.

"In Ohio, our turnover rate is fairly high. People come in and out," he said. "Everybody has to reinvent the wheel. It drives me bonkers."

Lynch raises perch for stocking ponds, but he sees opportunities for growth in the food market that didn’t exist a few years ago.

"Five years ago, I would have thought food fish didn’t have any future in Ohio, but my attitude is changing," he said. "We’re seeing a real change in need for fresh filets to high-end restaurants and specialty stores. I think that’s where it’s going to go."

More than 90 percent of fish consumed in the U.S. are imported, said Owen. "That’s a $12 billion hit to our trade. It’s a missed opportunity," she said.

Wild-caught fish production has peaked, opening the door for more farm-raised fish, Owen added. That would boost demand for soy-based fish food, which has become an important alternative to fishmeal-based diets in aquaculture systems, she said.