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business newsA Futures Market in Fish Is Inevitable. The Question Is When?
By
Justin Rohrlich
Jun 29, 2010 11:45 am
Aquaculture lags agriculture by 10,000 years, but that's all beginning to change.
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AquaBounty’s fish carries a growth gene from a Chinook salmon and a genetic “on-switch” from the ocean pout, a salmon relative, to maintain production of that gene, even in cold weather -- when salmon normally don't produce it.
“You don’t get salmon the size of the Hindenburg,” Ronald Stotish, CEO of AquaBounty, told the New York Times. “You can get to those target weights in a shorter time.”
It's a process not dissimilar to what scientists at the Fraunhofer Institute for Molecular Biology and Applied Ecology in Munich say about a potato they developed last year that exclusively contains amylopectin starch -- useful in emulsifying soups and desserts.
"We are working here with natural principles. In nature, sunlight triggers changes in the genome. With chemistry, we accomplish the same thing -- only faster," says Jost Muth, one of the researchers on the project.
Elliot Entis, AquaBounty’s founder, said that crossing a salmon with a pout “is really no different from selectively breeding desirable traits into cows to make a tastier prime rib.”
However, the issue extends far beyond taste. Scientists at the ARS Catfish Genetics Research Unit in Stoneville, Mississippi, believe that genetic improvement of channel catfish is essential for long-term viability of the US catfish industry.
Salmon, in particular, has been overfished to the point that only 5% of the salmon we eat today is wild.
Aquaculture can reverse this. A report from the Cato Institute notes that “Wild salmon stocks will likely be saved from extinction because farmed salmon is driving down the price and thus removing the incentive to catch the last wild stocks even as it makes salmon abundant for consumers and profitable for producers.”
“I was in the supermarket yesterday and the farm-raised fish were all in the $5.99 to $6.99 range. But the halibut -- which they don’t yet farm -- was $28/lb,” Shawn Hackett, president and CEO of Hackett Financial Advisors, a money-management firm with a focus on agricultural commodities, tells Minyanville. “When they figure out how to farm halibut, that price will drop. If we plan on eating fish 20 years from now, we will undoubtedly need aquaculture.”
Hackett says this would eventually lead to a futures market.
“All you need for a futures market is an active market. An active aquaculture industry will lead to this, and there would have to be some sort of pricing mechanism to manage risk, very much like the petroleum market.”
In other words, it will be possible for end-users and traders to hedge their bets on fish, the same way big ag companies like Tyson (TSN), Hormel (HRL), Smithfield (SFD), Kraft (KFT), and ConAgra (CAG) do now.
No positions in stocks mentioned.
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