THE ECONOMICS OF PRODUCING ALGAE AND BIVALVE SEED IN HATCHERIES

A computer program to estimate variable production costs in a bivalve hatchery was developed by using data from a working hatchery and from current literature. The empirical analysis focused on estimating algae costs to produce Atlantic oyster seed, because data on the algae process were more readily isolated from other hatchery processes and because feeding costs are recognized as a large proportion of total costs. Twelve simulations were made using different values for important parameters. Feed costs per bivalve were sensitive to the alternative specifications of feed cost functions, but not to assumptions about survival rates. To explore the implications of these feed cost simulations for the marketing of bivalve seed, total costs of production per bivalve were estimated on the basis of estimates of the proportion that feed costs are of total costs from an economic engineering study. Under optimistic assumptions, bivalve seed can be produced and marketed profitably. Within a given scenario, the "break-even" marketing period varied only by a week or two across the diverse assumptions made about the fraction that feed costs are of total costs. © 1990.