Research

Economic Feasibility of Clam Farms in Alaska

Problem: Shellfish farming is a new and growing enterprise for Alaska’s coastal economy. Since the passage of the 1988 Aquatic Farm Act by the Alaskan Legislature, the industry has grown to 56 farms permitted to culture shellfish on 219 acres of state tidelands. Farming of Pacific oyster (Crassostrea gigas) currently dominates the shellfish farming industry. In addition to oyster culture, the state of Alaska Department of Natural Resources initiated significant regulatory reform enabling expansion of on-bottom tidelands leasing for clam and cockle farming. Currently three farms have on-bottom leases, and eleven additional applications totaling 43 acres are pending under new leasing program. The question is what is the “break-even” point for these farms in Alaska.
Approach: The goal of this work is to conduct an economic feasibility study of hypothetical littleneck clam farms in Alaska based on current farming technology. We will develop a Code of Conduct and Best Management Practices for this nascent industry in Alaska, based on our studies.

Results: This work provides an analysis of the economic feasibility of one of many small-scale aquaculture operations being considered, little neck clam farms, as one type of supplemental economic activity for rural communities in Alaska. Specifically, projections of financial performance of a small-scale 2 acre clam farm have been conducted. Results show that initial capital investment is ~$13,000. Annual operating expenses are ~$38,000 during full operation. The largest costs contributing to annual operating expenses are labor including farm owner’s opportunity cost (65.54%), seed cost (18.22%), and PSP (7.86%). The base model presented in this work suggests profitability over a 20-year horizon. The internal rate of return over a 20-year farm horizon is 11%. Sensitivity analysis on profit due to the variability of market price, survival, and cost of seed and other inputs are in the process of being analyzed.

Presentations & Publications:
Fong, Q.S.W. Economic Feasibility of Clam Farms in Alaska. MS in preparation.

Contact person: Dr. Quentin Fong email: qfong@sfos.uaf.edu