Abstract
Shellfish aquaculture in Florida has continued to develop and become a more attractive aquaculture venture. Carefully considering the initial and recurring costs involved with operating a vertically integrated aquaculture company is critical in determining the financial outlook. Variability in realized costs, growth rates, scale, and resources make it difficult to accurately create expectations regarding economics. With this being said, the financial framework I have created regards increases in production costs in all operating stages. Inflated prices of equipment, fuel, and labor are extremely important economic considerations in determining how a shellfish aquaculture operation plans to succeed in the long-term. Revenues that have been projected in the economic orientation are slightly inflated to better reflect expected prices in the near future. Utilizing projections from similar production methods, costs and revenues are conservative and should accurately resemble the outlook of vertically integrated shellfish aquaculture facility with a five-acre main lease. Utilizing a capital structure that allows stakeholders to obtain equity in the company allows the economic trade-off between initial annual expense and future profitability to exist. Critical assumptions exist to define that the hatchery will produce 80 million animals. Mortality is assumed in each production stage and is estimated conservatively. For both oyster and clam production methods the total operating cost over the first two years post-inception amounts to $1,283,387. Projected revenues generated by both production methods amount to $1,596,000. The result is a two-year projected profitability of $312,612 less the assumed 40 percent owed back to the stakeholders and a return on investment of 24.36 percent. Growth opportunities are extremely prevalent in this venture as recurring costs decrease at an increasing rate post-inception. Realized revenues, profitability, and return on investment are projected to increase dramatically as costs incurred decrease relative to constant production.