What a difference a year makes.
In its State of World Aquaculture 2006 report, the United Nations Food and Agriculture Organization said that while vegetable protein could substitute for fishmeal in farmed fish diets, it was not competitive.
Relying on data gathered in 2004 and 2005, the report concluded that using enzymes to remove the antinutritional factors and amino acids found in crops made vegetable protein more costly than fishmeal.
Those market dynamics turned on their head in 2006 when fishmeal prices doubled in a tumultuous year that saw them surge as high as $1,450 US per tonne.
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What transpired last year was proof of what aquaculture experts have known for a long time.
“That’s just real world evidence that fishmeal supplies are under pressure,” said Todd Lahti, president of Can Pro Ingredients Ltd., which is building a plant in Arborfield, Sask., that will turn canola meal into a high protein substitute for fishmeal.
When higher fishmeal prices are combined with a revolutionary new technology being employed by Can Pro that drives down the cost of fractionating grain to improve canola’s nutritional profile, Lahti is confident his company can produce a product that will be priced below fishmeal.
Ron Hardy, director of the Aquaculture Research Institute at the University of Idaho, said the new price structure is good news for vegetable protein manufacturers.
“It looks to me as if we’re seeing a new price range that is outside the price range that I’ve seen my entire professional career, which is 30 years.”
Fishmeal manufacturers experienced what Hardy called a “triple whammy” in 2006:
- Out of nowhere, China, which accounts for two-thirds of world aquaculture production, bought an additional one million tonnes of the product.
- Hurricane Katrina knocked out capacity in the Gulf states to produce Menhaden meal, an important fishmeal component.
- An El Nino weather phenomenon drove anchovy populations far enough off the coast of Peru that they couldn’t be fished. The Peruvian anchovy fishery accounts for almost 30 percent of worldwide fishmeal production.
Fishmeal prices have cooled to about $900 per tonne, but analysts believe they will never return to historic lower levels.
“The new floor is going to be the former high,” said Hardy, which means vegetable protein concentrates made from crops such as canola, peas and soybeans and products such as wheat gluten are now competitive with fishmeal.
Murray Drew, a professor in the University of Saskatchewan’s animal and poultry science department, estimated that at least 50 percent of modern aquaculture diets comprise vegetable matter, largely because of the new price complex.
“The technologies we’re using are quite expensive but all of a sudden our products look very economical,” Drew said.
He agreed with Hardy that fishmeal prices have reached a new, higher plateau, and with a finite supply and expanding demand for the product, future price hikes are more likely than further contraction.
“Everybody has been predicting this was going to happen for about the last 15 years and it finally did.”
