Squid farming: Don’t assume it’s easy money

Editor’s Note: As interest in squid farming continues to grow, Nguyen Ba Ngoc, Chairman of the Board of Directors of Muc Nhay Bien Dong JSC, shares practical experience gained from more than 10 years of squid farming, while offering some important cautions for those considering investing in this farming sector.

A few successful models are not enough to establish a sustainable farming industry

Recently, images and videos on social media showing schools of feeding and growing have attracted considerable attention, prompting the question: If squid can be farmed on land, could this be a new investment opportunity? After more than 10 years of studying squid farming, we have found that raising squid to a marketable product is far from simple. To keep squid alive is one thing; to prove that a squid-farming operation can be economically viable is another.

There is a whole series of challenges: the source and quality of juveniles; water quality; temperature; salinity; oxygen levels; stocking density; feed; etc., and lastly, the market for one’s product. A model only becomes really profitable when its critical factors are under control, results are monitored using data, and its economics are clearly calculated.

Squid have a number of characteristics that set them apart from more commonly farmed aquatic species. The problem is not merely food. Farmers also need to monitor the squid’s ability to adapt to the environment, their responses to changes in temperature and salinity, their ability to catch prey, stocking density, and changes in behavior at different stages.

Investors need to answer a long list of questions: What is the survival rate? How much feed is required to produce one kilogram of market-size squid? How long does it take squid to reach market size? How much do water, electricity, oxygen, and environmental treatment cost? If squid prices fall, will the operation remain profitable? And, after all costs have been taken into account, how much money will the farmer be left with?

“Keeping the squid alive is only the first step; turning squid farming into a new economic sector is a much bigger challenge. Do not rush to conclusions because of what you see on social media. Go and see the operation for yourselves, and calculate everything. Only by approaching a new industry with a clear head can we make squid farming develop sustainably.”

A reliable supply of juveniles is the foundation

One of the most important issues in squid farming is the supply of juveniles. No production industry can result unless the supply is stable and its quality reliable.

The second issue, not to be underestimated, is squid transportation and acclimatization. For short journeys, squid can be transported in systems that maintain controlled water and oxygen conditions. For longer journeys, the demands on the transport system - and on oxygen, temperature and water quality - become considerably greater.

When they have just arrived, the juveniles should not be transferred immediately into the new environment. They need to be acclimated gradually to the new temperature and salinity. When squid are transported in plastic bags, the bags should be placed in the water at the farming site upon arrival for an appropriate period to allow the squid to adjust before release. If water tanks have been used for transport, water from the farming site can be gradually introduced into the transport system so that the squid can acclimate.

Currently, six squid per cubic meter is our reference point. This, however, is not a fixed formula. The appropriate density also depends on water quality, water-exchange capacity, oxygen systems, temperature, juvenile size, cage or tank design, etc. If stocking density is increased without adequate control of environmental conditions, farmers may face lower survival rates, greater competition for feed, higher costs, and deteriorating water quality.

Feeding, whose cost is far from negligible, is divided into sessions according to the squid’s stage of development and actual needs. Squid have periods of low activity and periods of high prey demand. Feeding therefore needs to be adjusted according to the squid’s stage of development, size and ability to catch prey. Feed should be introduced slowly and evenly so that the squid can catch it, while minimizing how much sinks to the bottom. This is particularly important in land-based farming systems, where uneaten feed is not only a direct financial loss: if it is not controlled, it can also pollute the water.

Under suitable farming conditions, after approximately five to six months, market-size squid can reach around 0.5–1.2 kg per animal. We recorded live first-grade squid selling for around VND 420,000 per kilogram at certain times. As for survival rates, under our current production process, survival from stocking to harvest has been recorded at around 30% in some models. After costs are deducted, a profit of around VND 70–100 million per tonne may be achievable under suitable conditions. Of course, one cannot simply multiply the market price of squid by the expected production volume and call the result profit.

Land-based squid farming is no easy game

If squid are to be farmed in tanks on land, farmers must address issues related to water input, salinity, temperature, oxygen, water circulation, waste treatment, electricity, feed, and biosecurity. If a recirculating or semi-recirculating system is used, the capital and operating costs will differ significantly from those of sea-based farming. If seawater is drawn directly from the sea, farmers must instead consider the quality of the water source, the distance to the intake point, the ability to exchange water, water treatment, and seasonal environmental fluctuations.

Prospective farmers should answer at least seven questions before deciding to invest:

1. Where will the juveniles come from, and is the supply reliable?

2. Is the water source at the proposed farming site suitable?

3. Can the system control temperature, salinity, oxygen and water quality?

4. How many farming cycles have the actual survival rate been verified over?

5. How much does it really cost to produce one kilogram of market-size squid?

6. If squid prices fall or feed prices rise, will the operation remain profitable?

7. After harvest, who will buy the product, and at what price?

We have aspirations extending beyond raising marketable squid alone. If squid can be developed into a farmed species that can be produced reliably, a profitable chain could emerge encompassing breeding, juvenile production, farming technology, farming areas, feed, equipment, logistics, processing, trade, tourism and other marine-economy services. But getting there will require further research, more pilot projects, and the participation of scientists, businesses, farmers and regulatory authorities.

We have had many failures, and what we are doing is far from perfect; but hopefully someone after us can make use of our experience and do something better.

$ 1 = VND 26,320 - Source: Vietcombank.