Indoor Production of Marine Shrimp at an Inland Location

With the continuing growth in the demand for shrimp and the ever-increasing reliance on imports to satisfy that demand, there is a tremendous and growing need for sustainable domestic sources of marine shrimp. Neither US wild harvest (~ 300 million lbs annually) nor the domestic outdoor pond-based farm-raised shrimp industry (8 million lbs annually) provides the solution, since these sources together produced only 15% of total shrimp consumption in 2004 and are significantly constrained due to the limits of nature, land, climate, disease, environmental concerns, and other factors. Magnolia has developed a technical approach using recirculating aquaculture system (RAS) technology that we believe can produce shrimp economically on a consistent basis. In order to be commercially viable, this system must be capable of achieving biological productivity sufficient to offset the higher energy and capital costs characteristic of such systems. In addition, since these systems can be located in-shore (inland) near attractive population centers, a premium price should also be achievable for fresh and even live product with an effective marketing and sales effort. In these niche markets, Magnolia believes it can be successful even though its production costs will be higher than the pond reared or wild caught animals. These production costs, however, are estimated to be dramatically lower compared with traditional methods of production and other competing re-circulating systems, e.g., our capitalization costs are much lower that what has been reported in the literature and we expect our productivity per unit footprint of building to be higher than other systems to date due to our selective breeding program and our high percentage coverage of floor area by water raceways. Based upon Magnolia's efforts over the previous 24 months, we have built a prototype production facility in Beaver Dam, KY that will be the basis of a refined system that is capable of producing a repeatable quality product on a continuous basis. The Phase II research will build on the results of Phase I to take the final step towards the successful development of environmentally-sustainable marine shrimp production.