Tasmania's fishy business

Perspectives

Tasmania's fishy business

Agribusiness Bulletin

This article focuses on Tasmanian’s role in the Australian aquaculture industry.

The Agribusiness Bulletin

The Agribusiness Bulletin focuses on national and local industry, as well as cross-industry insights and trends. This includes some of the drivers we expect to shape the future of the industry and potential challenges that may arise.

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Tasmania’s fishy business

In a previous edition of the Agribusiness Bulletin we looked into the commercial aquaculture industry; an industry providing a method of food production with low land-use intensity as an alternative to the need for yield and productivity gains to meet the consumption requirements of a growing world population.

The growth of global aquaculture - Fishy business discussed the efficiency of feed conversion into protein being twice as high for commercial aquaculture as for land-based protein production systems. Given the more efficient utilisation of feedstock in producing a unit of output in the aquaculture industry, resulting in lower input costs per kilogram of protein produced, commercial aquaculture is often considered to be both efficient and sustainable.

In this article we focus on Tasmanian’s role in the Australian aquaculture industry. Due to its climate, pristine waters providing low disease risk, and ideal water temperatures, Tasmania has proven to be an ideal location for commercial salmonid (including Atlantic salmon and Ocean trout) aquaculture. Salmonid farming occurs predominantly in two locations in Tasmania, being Macquarie Harbour on Tasmania’s west coast, and south east Tasmania. Moving along the value chain, processing and value-adding of the fish occurs in nearby economic centres (near the producers) as well as along the north coast (close to mainland transport links).

Two decades of growth

From an initial 56 tonne harvest in 1986-87, the Tasmanian salmonid industry now produces in excess of 43,000 tonnes of Atlantic salmon and Ocean trout, with a Gross Value of Production (GVP) of approximately AU$625 million. Did you know, the Tasmanian salmonid industry is now:

  • The largest single ‘fishery’ sector in Australia by GVP
  • The second largest primary production sector in Tasmania (behind agriculture)
  • Larger than all other aquaculture and fishery sectors in Tasmania combined.
The competitive landscape

This impressive growth story can be attributed to several elements of the competitive landscape:

  • Barriers to entry into the salmonid aquaculture industry are perceived to be high and increasing, with the threat of new market entrants considered low
    • High capital costs along the value chain (including hatcheries, nets, feed delivery systems/vessels, harvesting vessels and processing and storage facilities)Limited (and tightly held) marine licences
    • Stringent quarantine and biosecurity laws restrict or prohibit international product (including brood stock and live eggs) from entering Australia
    • Environmental conditions for growing salmonid species are not suitable in other Australian states, specifically due to its favourable climate, pristine waters affording low risk of disease, and ideal water temperatures 
  • Tasmanian salmonid companies have focussed on sustainable production of healthy and nutritious salmon and trout, at the same time that consumers appear to have a growing awareness of the health and nutrition aspects of fish 
  • Advances in product development and retail-ready packaging has given the consumer an easy to prepare fish product that is consistent in quality.
Risks and challenges

But the industry is by no means immune from risks and challenges to further growth including:

  • The incursion of pests and diseases, therefore quarantine and biosecurity measures need to be strictly complied with and monitored throughout the production cycle and value chain
  • The desire to expand production volumes requires development approvals that balance industry’s appetite for access to more natural resources in a way that is environmentally sustainable and maintains community support for the industry
  • Sustainable sources of feed stock and fishmeal could become constrained as competition from other (global) aquaculture producers for quality feed inputs increases.
More growth to come?

The vast majority of products stay within Australia, being sold through wholesale and retail channels including fish markets, restaurants, and supermarkets. As a result of the strong domestic demand, little of the annual harvest is currently sold into the export market.

But that could well change over the coming decades. The four key industry participants ambitiously plan on turning the Atlantic salmonid and Ocean trout industry into a billion dollar industry by 2030. This ambitious target plays to aquaculture’s position as the fastest developing source of animal protein, growing by more than 60% over the past decade, according to a report from the Tasmanian Salmonid Growers Association.

Not unlike the growth opportunities for other Australian primary products, geographic isolation and suitable climatic conditions mean the industry is free of many production challenges facing international producers, boosted by favourable currency movements and new trade agreements with key and emerging markets that can absorb the stated production growth targets, Tasmania’s fishy business is well placed to capture it’s unfair share of new and growing international market opportunities.

Author

Fiona Beven
Account Director | Deloitte Private

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