ANNUAL PROGRESS REPORT

The U.S. aquaculture industry is an important sector of U.S. agriculture. Production in 2002 was about 867 million pounds and generated approximately $866 million for producers. Yet, anticipated growth in the industry, both in magnitude and in species diversity, continues to fall short of expectations.

Much of what is known about aquaculture science is a result of institutional attention given to our traditional capture of wild fisheries with the goal of releasing cultured fishes into public waters for enhancement of declining public stocks. Despite extensive efforts to manage wild populations for a sustained yield, as a nation we consume substantially greater amounts than we produce. Much of the United States= demand for seafood has been met by imports. The value of imported fisheries products has substantially increased over the last two decades. In 2003, the U.S. imported $21.3 billion of fisheries products and the trade deficit was $9.3 billion for all fisheries products, most of which was for edible fish and shellfish.

Landings for most commercial capture fisheries species and recreational fisheries of the United States have been relatively stable during the last decade, with many fish stocks being over exploited. In this situation, aquaculture provides an opportunity to reduce the trade deficit and meet the rising U.S. demand for fish products. A strong domestic aquaculture industry is needed to increase U.S. production of fish and shellfish. This can be achieved by a partnership among the Federal Government, State and local public institutions, and the private sector with expertise in aquaculture development.

Congress recognized the opportunity for making significant progress in aquaculture development in 1980 by passage of the National Aquaculture Act (P.L. 96-362). Congress amended the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (P.L. 95-113) in Title XIV of the Agriculture and Food Act of 1981 (P.L. 97-98) by granting authority to establish aquaculture research, development, and demonstration centers in the United States in association with colleges and universities, State Departments of Agriculture, Federal facilities, and non-profit private research institutions. Five such centers have been established: one in each of the northeastern, north central, southern, western, and tropical/subtropical Pacific regions of the country. The Farm Security and Rural Investment Act of 2002 (P.L. 107-171), otherwise known as the Farm Bill, has reauthorized the Regional Aquaculture Center program at $7.5 million per annum. As used here, a center refers to an administrative center. Centers do not provide monies for brick-and-mortar development. Centers encourage cooperative and collaborative aquaculture research and extension educational programs that have regional or national application. Center programs complement and strengthen other existing research and extension educational programs provided by the U.S. Department of Agriculture (USDA) and other public institutions. As a matter of policy, centers implement their programs by using institutional mechanisms and linkages that are in place in the public and private sector.

The mission of the Regional Aquaculture Centers (RACs) is to support aquaculture research, development, demonstration, and extension education to enhance viable and profitable U.S. aquaculture production which will benefit consumers, producers, service industries, and the American economy.

The North Central Regional Aquaculture Center (NCRAC) was established in February 1988. It serves as a focal point to assess needs, establish priorities, and implement research and extension educational programs in the twelve state agricultural heartland of the United States which includes Illinois, Indiana, Iowa, Kansas, Michigan, Missouri, Minnesota, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. NCRAC also provides coordination of interregional and national programs through the National Coordinating Council for Aquaculture (NCC). The council is composed of the RAC directors and USDA aquaculture personnel.

ORGANIZATIONAL STRUCTURE

Michigan State University (MSU) and Iowa State University (ISU) work together to develop and administer programs of NCRAC through a memorandum of understanding. MSU is the prime contractor for the Center and has administrative responsibilities for its operation. The Director of NCRAC is located at MSU. ISU shares in leadership of the Center through an office of the Associate Director who is responsible for all aspects of the Center's publications, technology transfer, and outreach activities.

At the present time the staff of NCRAC at MSU includes Ted R. Batterson, Director, and Liz Bartels, Executive Secretary. The Center Director has the following responsibilities:

< Developing and submitting proposals to USDA Cooperative State Research, Education and Extension Service (USDA/CSREES) which, upon approval, becomes a grant to the Center;

< Developing appropriate agreements (sub-contracts) with other parties, including ISU for the Associate Director=s office, for purposes of transferring funds for implementation of all projects approved under the grants;

< Serving as executive secretary to the Board of Directors, responsible for preparing agenda and minutes of Board meetings;

< Serving as an ex-officio (non-voting) member of the Technical Committee and Industry Advisory Council;

< Coordinating the development of research and extension plans, budgets, and proposals;

< Coordinating and facilitating interactions among the Administrative Center, Board of Directors, Industry Advisory Council, and Technical Committee;

< Monitoring research and extension activities;

< Arranging for review of proposals for technical and scientific merit, feasibility, and applicability to priority problems and preparing summary budgets and reports as required;

< Recruiting other Administrative Center staff as authorized by the Board of Directors;

< Maintaining liaison with other RACs; and

< Serving on the NCC.

At the present time NCRAC's Office for Publications and Extension Programs at ISU is under the direction of Joseph E. Morris, Associate Director. The Associate Director has the following responsibilities:

< Coordinating, facilitating, and executing regional aquaculture extension program activities;

< Serving as head of Publications for NCRAC, including editor of the fact sheet, technical bulletin, culture manual, and video series as well as of the NCRAC Newsletter;

< Serving as the NCRAC liaison with national aquaculture extension programs, including in particular, extension programs of the other four USDA Regional Aquaculture Centers; and

< Serving as a member of NCRAC's Extension Executive Committee.

The Board of Directors (BOD) is the primary policy-making body of the NCRAC. The BOD has established an Industry Advisory Council (IAC) and Technical Committee (TC). Membership of the BOD consists of four persons from the IAC, a representative from the region's State Agricultural Experiment Stations and Cooperative Extension Services, a member from a non-land grant university, representatives from the two universities responsible for the center: Michigan State and Iowa State, and chairs of the two subcommittees of the Center=s Technical Committee. The IAC is composed of representatives from each state=s aquaculture association and six at-large members appointed by the BOD who represent various sectors of the aquaculture industry and the region as a whole. The TC is composed of a sub-committee for Extension (TC/E) and a sub-committee for Research (TC/R). Directors of the Cooperative Extension Service within the North Central Region appoint representatives to the TC/E. The TC/R has broad regional make-up and is composed of scientists from universities and state agencies with varied aquacultural expertise who are appointed by the BOD. Each sub-committee of the TC has a chairperson who serves as a member of the BOD.

NCRAC functions in accordance with its Operations Manual which is periodically amended and updated with BOD approval. It is an evolving document that has changed as the Center's history lengthens. It is used for the development of the cooperative regional aquaculture and extension projects that NCRAC funds.

ADMINISTRATIVE OPERATIONS

Since inception of NCRAC February 1, 1988, the role of the Administrative Center has been to provide all necessary support services to the BOD, IAC, TC, and project work groups for the North Central Region as well as representing the region on the NCC. As the scope of the NCRAC programs expand, this has entailed a greater work load and continued need for effective communication among all components of the Center and the aquaculture community.

The Center functions in the following manner.

< After BOD approval of Administrative Center costs, the Center submits a grant to USDA/CSREES/Grants Management Branch for approval. To date the Center has received 17 grants from USDA for FY88 (Grant #88-38500-3885), FY89 (Grant #89-38500-4319), FY90 (Grant #90-38500-5008), FY91 (Grant #91-38500-5900), FY92 (Grant #92-38500-6916), FY93 (Grant #93-38500-8392), FY94 (Grant #94-38500-0048), FY95 (Grant #95-38500-1410), FY96 (Grant #96-38500-2631), FY97 (#97-38500-3957), FY98 (#98-38500-5863), FY99 (#99-38500-7376), FY00 (#00-38500-8984), FY2001 (#2001-38500-10369), FY2002 (#2002-38500-11752), FY2003 (#2003-38500-12995), and FY2004 (#2004-38500-14269) with monies totaling $12,532,757. Currently, five grants are active (FY00-04); the first twelve grants (FY88-99) have terminated.

< The Center annually coordinates a program planning meeting which typically sets priorities for the next funding cycle and calls for development of project outlines to address priority problem areas.

< Work Groups are formed which submit project outlines to the Center. The projects are peer reviewed by experts from both within and outside the region and a Project Review Committee.

< The BOD, using the Project Review Committee=s recommendation and reviewers= responses, decides which projects are to be approved and funding levels. The Center conveys BOD decisions to all Project Work Groups. Those that are approved for funding are asked to submit revised project outlines incorporating BOD, Project Review Committee, and reviewers= comments.

< The Center then submits the revised project outlines as a Plan of Work (POW) to USDA for approval.

< Once a POW is approved by USDA, the Center then prepares subcontracts for each participating institution. The Center receives all invoices for subcontractual agreements and prepares payment vouchers for reimbursement. Thus, the Center staff serve as fiscal agents for both receiving and disbursing funds in accordance with all terms and provisions of the grants.

Through August 31, 2004, the Center has funded or is funding 66 projects through 338 subcontracts from the first 15 grants received. Funding for these Center supported projects is summarized in Table 1 below (pages 5-6). Information about funded projects is also available at the Center=s Web site (http://ag.ansc.purdue.edu/aquanic/ncrac).

During this reporting period, the Publications Office at ISU produced and distributed a number of publications including fact sheets, technical bulletins, videos, and the Center=s newsletter. A complete list of all publications from this office is included in the Appendix under Extension.

Other areas of support by the Administrative Office during this reporting period included: monitoring research and extension activities and developing progress reports; developing liaisons with appropriate institutions, agencies and clientele groups; soliciting, in coordination with the other RACs, written testimony for the U.S. House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies and the U.S. Senate Appropriations Subcommittee on Agriculture, Rural Development, and Related Agencies; participating in the NCC; numerous oral and written presentations to both professional and lay audiences; working with other fisheries and aquaculture programs throughout the North Central Region; and in conjunction with the Aquaculture Network Information Center (AquaNIC) maintaining the NCRAC Web site.

PROJECT REPORTING

As indicated in Table 1, NCRAC has funded a number of projects for many of the project areas it has selected for research and extension activities. For example, there have been eight separately funded projects in regard to Extension and Yellow Perch. Project outlines have been written for each separate project within an area, or the project area itself if only one project. These project outlines have been submitted in POWs or amendments to POWs for the grants as indicated in Table 1. Many times, the projects within a particular area are continuations of previously funded activities while at other times they are addressing new objectives. Presented below are Progress or Termination Reports mostly for projects that were underway or completed during the period September 1, 2003 to August 31, 2004. Projects, or Project components, that terminated prior to September 1, 2003 have been reported on in earlier documents (e.g., 1989-1996 Compendium Report and other Annual Progress Reports).

A cumulative list of all publications, manuscripts, papers presented, or other outputs for all funded NCRAC project areas is contained in the Appendix.

Table 1. North Central Regional Aquaculture Center funded projects.

Project Area	Project Number	Proposed Duration Period	Funding Level	Grant Number
Aquaculture Drugs	1 2 3 4 5 6	7/1/96-6/30/97 12/1/96-11/30/97 10/1/99-9/30/00 6/1/04-12/31/05 7/15/04-7/14/05 11/1/04-10/31/06	$27,000 $950 $8,415 $223,677 $60,000 $50,000 $370,042	95-38500-1410 95-38500-1410 97-38500-3957 2002-38500-11752 2003-38500-12995 2002-38500-11752
Baitfish	1	9/1/92-8/31/94	$61,973	92-38500-6916
Conferences/Workshops/Symposia
Environmental Strategies Symposium	1	9/1/00-5/31/01	$5,000	96-38500-2631
Nat=l. Aquaculture Exten. Conf.	1 2 3	10/1/91-9/30/92 12/1/96-11/30/97 11/1/02-10/31/03	$3,005 $3,700 $4,500 $11,205	89-38500-4319 95-38500-1410 00-38500-8984
NCR Aquaculture Conference	1 2	6/1/90-3/31/91 12/9/98-6/30/99	$7,000 $3,000 $10,000	90-38500-5008 96-38500-2631
Percis III	1	11/1/02-12/31/03	$4,000	00-38500-8984
Crayfish	1	9/1/92-8/31/94	$49,677	92-38500-6916
Economics/Marketing	1 2 3 4 5	5/1/89-12/31/91 9/1/91-8/31/92 9/1/93-8/31/95 9/1/99-8/31/01 9/1/03-8/31/04	$127,338 $34,350 $53,300 $40,000 $47,916 $50,000 $352,904	88-38500-3885 89-38500-4319 91-38500-5900 93-38500-8392 97-38500-3957 2002-38500-11752
Extension NOTE: Projects 1-9 are deemed ABase@ Extension Projects; Project 10 is the Aquaculture Regional Extension Facilitator	1 2 3 4 5 6 7 8 9 10	5/1/89-4/30/91 3/17/90-8/31/91 9/1/91-8/31/93 9/1/93-8/31/95 9/1/95-8/31/97 9/1/97-8/31/99 9/1/99-8/31/01 9/1/01-8/31/03 9/1/03-8/31/05 9/1/03-8/31/05	$39,221 $37,089 $31,300 $94,109 $110,129 $10,813 $20,391 $38,000 $94,000 $28,500 $18,000 $28,000 $100,000 $649,552	88-38500-3885 89-38500-4319 89-38500-4319 91-38500-5900 91-38500-5900 92-38500-6916 95-38500-1410 97-38500-3957 99-38500-7376 99-38500-7376 2001-38500-10369 2002-38500-11752 2002-38500-11752
Hybrid Striped Bass	1 2 3 4 5 6 7	5/1/89-8/31/91 6/1/90-8/31/92 9/1/91-8/31/93 9/1/93-8/31/95 9/1/95-8/31/97 6/1/99-5/31/00 9/1/01-5/31/04	$68,296 $68,114 $101,000 $96,550 $168,000 $150,000 $15,000 $98,043 $211,957 $976,960	88-38500-3885 89-38500-4319 90-38500-5008 91-38500-5900 93-38500-8392 95-38500-1410 96-38500-2631 98-38500-5863 2001-38500-10369
National Aquaculture INAD/NADA Coordinator	1 2	9/1/93-8/31/94 5/15/95-5/14/96 5/15/96-5/14/97 5/15/97-5/14/98 5/15/98-5/14/99 5/15/99-5/14/00 7/15/04-7/14/05	$2,000 $5,000 $6,669 $3,331 $15,000 $13,241 $10,000 $9,000 $64,241	89-38500-4319 94-38500-0048 92-38500-6916 95-38500-1410 96-38500-2631 94-38500-0048 95-38500-1410 2003-38500-12995
Nutrition (HSP & YP)	1	9/1/04-8/31/06	$200,000 $200,000	2002-38500-11752
Salmonids	1 2 3 4	6/1/90-8/31/92 9/1/92-8/31/94 9/1/94-8/31/96 9/1/97-8/31/99	$9,000 $120,799 $149,997 $199,290 $158,656 $637,742	89-38500-4319 90-38500-5008 92-38500-6916 94-38500-0048 97-38500-3957
Sunfish	1 2 3 4 5	6/1/90-8/31/92 9/1/92-8/31/94 9/1/94-8/31/96 9/1/96-9/31/98 9/1/99-8/31/01	$130,758 $149,799 $173,562 $199,921 $199,748 $853,788	90-38500-5008 92-38500-6916 94-38500-0048 96-38500-2631 99-38500-7376
Tilapia	1 2	9/1/96-8/31/98 9/1/98-5/14/00	$118,791 $150,000 $268,791	96-38500-2631 98-38500-5863
Walleye	1 2 3 4 5 6 7	5/1/89-8/31/91 6/1/90-8/31/92 9/1/91-8/31/92 9/1/92-8/31/93 9/1/93-8/31/95 9/1/95-8/31/97 9/1/99-6/30/02	$177,517 $111,657 $109,223 $75,000 $150,000 $117,395 $59,835 $127,000 $927,627	89-38500-4319 90-38500-5008 91-38500-5900 89-38500-4319 93-38500-8392 94-38500-0048 95-38500-1410 98-38500-5863
Wastes/Effluents	1 2 3	9/1/92-8/31/94 9/1/96-8/31/98 9/1/01-8/31/04	$153,300 $100,000 $106,186 $88,814 $448,300	92-38500-6916 96-38500-2631 00-38500-8984 2001-38500-10369
White Papers	1 2	7/1/98-12/31/98 9/1/99-12/31/99	$4,999 $17,495 $22,494	96-38500-2631 97-38500-3957
Yellow Perch	1 2 3 4 5 6 7 8	5/1/89-8/31/91 6/1/90-8/31/92 9/1/91-8/31/93 9/1/93-8/31/95 9/1/95-8/31/97 9/1/97-8/31/99 9/1/98-8/31/00 9/1/01-5/31/04	$76,957 $85,723 $92,108 $99,997 $150,000 $199,507 $185,458 $92,370 $326,730 $125,016 $1,433,866	88-38500-3885 89-38500-4319 90-38500-5008 91-38500-5900 93-38500-8392 95-38500-1410 97-38500-3957 98-38500-5863 00-38500-8984 2001-38500-10369

Project Area

Project

Number

Proposed Duration Period

Funding Level

Grant Number

Aquaculture Drugs

7/1/96-6/30/97

12/1/96-11/30/97

10/1/99-9/30/00

6/1/04-12/31/05

7/15/04-7/14/05

11/1/04-10/31/06

$27,000

$950

$8,415

$223,677

$60,000

$50,000

$370,042

95-38500-1410

97-38500-3957

2002-38500-11752

2003-38500-12995

2002-38500-11752

Baitfish

9/1/92-8/31/94

$61,973

92-38500-6916

Conferences/Workshops/Symposia

Environmental Strategies Symposium

9/1/00-5/31/01

$5,000

96-38500-2631

Nat=l. Aquaculture Exten. Conf.

10/1/91-9/30/92

12/1/96-11/30/97

11/1/02-10/31/03

$3,005

$3,700

$4,500

$11,205

89-38500-4319

95-38500-1410

00-38500-8984

NCR Aquaculture Conference

6/1/90-3/31/91

12/9/98-6/30/99

$7,000

$3,000

$10,000

90-38500-5008

96-38500-2631

Percis III

11/1/02-12/31/03

$4,000

00-38500-8984

Crayfish

9/1/92-8/31/94

$49,677

92-38500-6916

Economics/Marketing

5/1/89-12/31/91

9/1/91-8/31/92

9/1/93-8/31/95

9/1/99-8/31/01

9/1/03-8/31/04

$127,338

$34,350

$53,300

$40,000

$47,916

$50,000

$352,904

88-38500-3885

89-38500-4319

91-38500-5900

93-38500-8392

97-38500-3957

2002-38500-11752

Extension

NOTE: Projects 1-9 are deemed ABase@ Extension Projects; Project 10 is the Aquaculture Regional Extension Facilitator

5/1/89-4/30/91

3/17/90-8/31/91

9/1/91-8/31/93

9/1/93-8/31/95

9/1/95-8/31/97

9/1/97-8/31/99

9/1/99-8/31/01

9/1/01-8/31/03

9/1/03-8/31/05

$39,221

$37,089

$31,300

$94,109

$110,129

$10,813

$20,391

$38,000

$94,000

$28,500

$18,000

$28,000

$100,000

$649,552

88-38500-3885

89-38500-4319

91-38500-5900

92-38500-6916

95-38500-1410

97-38500-3957

99-38500-7376

2001-38500-10369

2002-38500-11752

Hybrid Striped Bass

5/1/89-8/31/91

6/1/90-8/31/92

9/1/91-8/31/93

9/1/93-8/31/95

9/1/95-8/31/97

6/1/99-5/31/00

9/1/01-5/31/04

$68,296

$68,114

$101,000

$96,550

$168,000

$150,000

$15,000

$98,043

$211,957

$976,960

88-38500-3885

89-38500-4319

90-38500-5008

91-38500-5900

93-38500-8392

95-38500-1410

96-38500-2631

98-38500-5863

2001-38500-10369

National Aquaculture INAD/NADA Coordinator

9/1/93-8/31/94

5/15/95-5/14/96

5/15/96-5/14/97

5/15/97-5/14/98

5/15/98-5/14/99

5/15/99-5/14/00

7/15/04-7/14/05

$2,000

$5,000

$6,669

$3,331

$15,000

$13,241

$10,000

$9,000

$64,241

89-38500-4319

94-38500-0048

92-38500-6916

95-38500-1410

96-38500-2631

94-38500-0048

95-38500-1410

2003-38500-12995

Nutrition (HSP & YP)

9/1/04-8/31/06

$200,000

2002-38500-11752

Salmonids

6/1/90-8/31/92

9/1/92-8/31/94

9/1/94-8/31/96

9/1/97-8/31/99

$9,000

$120,799

$149,997

$199,290

$158,656

$637,742

89-38500-4319

90-38500-5008

92-38500-6916

94-38500-0048

97-38500-3957

Sunfish

6/1/90-8/31/92

9/1/92-8/31/94

9/1/94-8/31/96

9/1/96-9/31/98

9/1/99-8/31/01

$130,758

$149,799

$173,562

$199,921

$199,748

$853,788

90-38500-5008

92-38500-6916

94-38500-0048

96-38500-2631

99-38500-7376

Tilapia

9/1/96-8/31/98

9/1/98-5/14/00

$118,791

$150,000

$268,791

96-38500-2631

98-38500-5863

Walleye

5/1/89-8/31/91

6/1/90-8/31/92

9/1/91-8/31/92

9/1/92-8/31/93

9/1/93-8/31/95

9/1/95-8/31/97

9/1/99-6/30/02

$177,517

$111,657

$109,223

$75,000

$150,000

$117,395

$59,835

$127,000

$927,627

89-38500-4319

90-38500-5008

91-38500-5900

89-38500-4319

93-38500-8392

94-38500-0048

95-38500-1410

98-38500-5863

Wastes/Effluents

9/1/92-8/31/94

9/1/96-8/31/98

9/1/01-8/31/04

$153,300

$100,000

$106,186

$88,814

$448,300

92-38500-6916

96-38500-2631

00-38500-8984

2001-38500-10369

White Papers

7/1/98-12/31/98

9/1/99-12/31/99

$4,999

$17,495

$22,494

96-38500-2631

97-38500-3957

Yellow Perch

5/1/89-8/31/91

6/1/90-8/31/92

9/1/91-8/31/93

9/1/93-8/31/95

9/1/95-8/31/97

9/1/97-8/31/99

9/1/98-8/31/00

9/1/01-5/31/04

$76,957

$85,723

$92,108

$99,997

$150,000

$199,507

$185,458

$92,370

$326,730

$125,016

$1,433,866

88-38500-3885

89-38500-4319

90-38500-5008

91-38500-5900

93-38500-8392

95-38500-1410

97-38500-3957

98-38500-5863

00-38500-8984

2001-38500-10369

PROJECT TERMINATION

PROGRESS REPORTS

ECONOMICS/MARKETING^{^[1]}

Project Termination Report for the Period

September 1, 2003 to August 31, 2004

NCRAC FUNDING LEVEL: $50,000 (September 1, 2003 to August 31, 2004)

PARTICIPANT:

Susan T. Kohler	Southern Illinois University-Carbondale	Illinois
*Industry Advisory Council Liaison:*
Russ Allen	Seafood Systems, Inc., Okemos	Michigan
*Extension Liaison:*
Laura G. Tiu	Ohio State University	Ohio

REASON FOR TERMINATION

The project objectives were completed.

PROJECT OBJECTIVES

1. Investigate the pros/cons of alternative forms and scopes of a marketing organization, i.e., species; market information, marketing, or market development.

2. Survey aquaculture growers and existing co-ops in the North Central Region (NCR) to assess interest and willingness to commit and invest in a grower-owned marketing organization.

PRINCIPAL ACCOMPLISHMENTS

Case histories of ten agricultural cooperatives were reviewed to acquire knowledge concerning cooperative structures, strengths and weaknesses, industry opportunity and threats, and lessons learned. A SWOT (strengths, weaknesses, opportunities, and threats) analysis was employed to assess the pros/cons of the various options a marketing cooperative could provide, i.e., market information, marketing, or market development; species-specific assistance; processing; and bulk purchasing of supplies and other inputs.

A Amarketing@ cooperative has strengths such as concentration on sales and market identification. The Coop Marketing Specialist (CMS) could enhance relationship building between producers and buyers, research markets to establish a profitable pricing strategy for multiple species, and ensure members comply with all interstate, intrastate, and international commerce regulations. An immense weakness is the geographical size of the NCR. Markets for rainbow trout are much different in Madison, Wisconsin, than in Carbondale, Illinois. If a farmer wants to take advantage of markets in Madison, that=s a long distance from Carbondale. Another weakness revealed in a couple of case histories is the ability to find a CMS with sufficient knowledge, experience, and networking skills to accomplish the objectives of the coop. A candidate may have superior knowledge concerning fish production and handling, but inferior experience in financial matters and account management. It=s rare to find such a variety of professional attributes in one individual. An opportunity associated with a market development cooperative would be the ability to network and forecast changes in consumer preferences. A CMS would have the time and resources to research current trends, as well as cultural, political, and environmental changes, whereas an individual farmer may not. A threat to market development cooperatives, as indicated by a couple of the case histories, is the tendency for some members to bypass the coop and make deals with buyers on their own. Some farmers desire a Afree ride@ on the back of the coop and then penetrate the market when they think the time is right. What those farmers often learn is that the buyers would rather deal with a unified coop than a maverick whose product may not be consistent from order to order. The mavericks often are not successful, but the attempt disrupts the flow of product from the coop and may divert the buyer=s attention from this region entirely.

The Aspecies-specific@ option includes the strengths of being overall less complicated, easier to build a grower=s knowledge base for research and development, and quicker to become a force in the marketplace, compared to handling multiple species. Weaknesses may include a limited number of growers committed to just one species; such growers may be widely spread throughout the NCR; and the loss of flexibility in the market when one species drops in price compared to another. Opportunities may include a brand name or image (i.e., Midwestern Trout), processing efficiency, and bulk purchasing of raw inputs needed by one species. Threats could be changes in interstate and international commerce regulations, market changes (away from the one species), and proximity of producers to the market. A species-specific marketing cooperative may be the best option available among the four with respect to simplicity issues.

A Aprocessing@ option offers strengths in self-sufficiency to get to market, the flexibility to change product form to meet consumer demands, and the ability to explore and develop niche markets. But, as emphatically stated in one case history, a processing coop is Aextremely expensive to build and enormously complicated and expensive to operate.@ The Illinois Fish Farmers Coop was able to use state grants to build their facility, which totaled about $4.5 million, but they underestimated costly equipment maintenance, routine sanitation problems, workers= compensation claims, union-scale wages, unforeseen distribution costs, sewage lagoon construction problems, and so on. They stated that they could buy the fish from regional farmers and process them in a satisfactory manner, but they could not operate the plant profitably. The overhead costs were beyond their expectations. The processing plant manager had ten years of experience operating a similar plant in Arkansas, but was surprised by the complexity and cost of plant operation in Illinois (various external business threats). A processing cooperative would be the most intense, expensive, risk-laden form of a cooperative among the four options. Additionally, as a farmer-owned enterprise, any losses, which could be sizeable, would be shared by the farmers.

A Abulk purchasing@ option has the strengths of lowering production costs for its members by enhancing their Abuying power@ and acquiring customized products for its members. However, if the products purchased are not directly delivered to the individual fish farms, costly centralized warehousing would be needed where excess inventory may become problematic. These costs may cancel any money saved through bulk purchasing. Direct delivery would have to occur to ensure success. Opportunities associated with the bulk purchasing option may be the development of product lines to supply the entire industry, bulk purchasing during the off-season or when another enterprise is liquidating, and the increase in Ainter-farmer@ communications and exchange of critical production information. Farmer Aknowledge base@ can become a valuable asset by itself. A few threats may be the absence of consensus about a specific item of equipment or supplier of goods (fragmentation disrupts bulk purchasing) and collection of payment in a timely manner to assure the bulk order.

A mail survey was administered as an initial assessment of the willingness of producers in the NCR to commit to and invest in a grower-owned marketing cooperative. Supporting data were also gathered. The survey was designed and pilot tested with the assistance of the North Central Regional Aquaculture Center (NCRAC) extension contacts in each state. A mailing list was created by contacting the NCRAC extension contact in each state for the names and addresses of producers. Questionnaires were mailed to 857 producers. The response rate was 33.1%.

A summary of survey results include:

< Catfish and trout are the predominant species cultured in the region, based on poundage reported.

< Food fish enterprises were the most common type of operation, fingerling/stockers were second, and hatcheries were third.

< Wholesale and retail methods of marketing were fairly even in number, with a slight edge towards wholesale marketing.

< Approximately 40% of the responding producers plan to expand in the coming year.

< Nearly half (49%) of the respondents to the survey planned to expand by approximately 10,000 pounds in the next year.

< Forty-two percent of NCR aquaculturists stated they would be willing to commit all or part of their product to a regional cooperative. Twenty-three percent indicated they would be willing to spend time serving on committees or the board of the cooperative.

< Twenty producers (24.4%) indicated a willingness to contribute $1,000 toward a cooperative, twelve producers (14.6%) indicated a willingness to contribute $5,000, and twelve producers (14.6%) indicated a willingness to contribute only $50.

< Positive comments included: AA marketing organization is critical to the region=s aquaculture industry development, especially development of niche markets@ and AIt sounds like a very good idea because aquaculture will definitely grow here in the future.@ Questions or neutral comments included: AWhere would the headquarters be located?@ and AWe would have to know a lot more before committing any money.@ Negative responses included: AMany coops have tried and failed. Please let me know how this one is going to succeed @ and AI think the geographic area is too large, diversity too great, and average size of farms too small to support a coop.@

IMPACTS

< The results of this project will provide information on the pros and cons on the various options a marketing cooperative may provide.

< It will provide an assessment of the willingness of producers in the NCR to commit to and invest in a marketing cooperative.

< The results will provide the information necessary for producers and other stakeholders to make educated decisions concerning the potential feasibility of a marketing cooperative as well as the services and options that may be made available through a cooperative entity.

< Producers and other stakeholders will be able to evaluate the perceived benefits against the risks and required resources.

RECOMMENDED FOLLOW-UP ACTIVITIES

Based on the results of the regional survey, it appears that a marketing cooperative, with one or more of the four options, would not be feasible at this point in time. However, NCRAC needs to consider avenues to address the most requested services and determine a method to provide them. According to the survey, technical assistance, particularly in the area of disease diagnostics, marketing and brokering, and bulk supplies are the most sought after services. Providing all of these services would be difficult for a single cooperative. It would require the services of several individuals with diverse backgrounds.

The following recommendations are made in an attempt to address the requested services in the absence of a regional cooperative. In the area of bulk supplies, a central person/business could be contracted with to determine the needs of producers, place orders, and arrange for direct delivery of the supplies and equipment. A small commission on sales might be sufficient to cover costs for this service. This option would alleviate the expense of bulk warehousing and still provide a quantity discount.

To provide marketing services to producers, NCRAC could contract with an individual/business to develop and maintain a Web site of potential buyers. NCR producers, through a password, could access the site. This would be one method of linking producers with buyers without the expense of a broker. Similar to the previous scenarios, a small commission on sales might be sufficient to cover the cost of the service. It may also be possible to combine the bulk purchasing and the sales clearinghouse services.

Technical assistance for the NCR is provided through the University of Wisconsin-Milwaukee. Their assertion is that if they can=t answer a question over the phone, they will contact an individual who can. Technical services providers throughout the NCR should be added to their contact list. As a result, producers with questions could be linked with a local provider if a site visit is necessary.

Even though a regional marketing cooperative does not seem warranted at this point in time, as the industry grows and producers work together to achieve certain goals, the opportunity of a cooperative may be presented again.

PUBLICATIONS, MANUSCRIPTS, OR PAPERS PRESENTED

See the Appendix for a cumulative output for all NCRAC-funded Economics/Marketing activities.

SUPPORT

YEAR

NCRAC-USDA FUNDING

OTHER SUPPORT

TOTAL

SUPPORT

UNIVER-SITY

INDUSTRY

OTHER

FEDERAL

OTHER

TOTAL

2003-04

$50,000

TOTAL

$50,000

EXTENSION^{^[2]}

Project Component Termination Report for the Period

September 1, 1989 to August 31, 2004

NCRAC FUNDING LEVEL: $521,552^{^[3]} (September 1, 1989 to August 31, 2004)

PARTICIPANTS:

Fred P. Binkowski	University of Wisconsin-Milwaukee	Wisconsin
James M. Ebeling	Ohio State University	Ohio
Donald L. Garling	Michigan State University	Michigan
Jeffrey L. Gunderson	University of Minnesota-Duluth	Minnesota
Terrence B. Kayes	University of Nebraska-Lincoln	Nebraska
Ronald E. Kinnunen	Michigan State University	Michigan
David J. Landkamer	University of Minnesota	Minnesota
Frank R. Lichtkoppler	Ohio State University	Ohio
Joseph E. Morris	Iowa State University	Iowa
Robert A. Pierce II	University of Missouri	Missouri
Daniel A. Selock	Southern Illinois University-Carbondale	Illinois
Fred L. Snyder	Ohio State University	Ohio
LaDon Swann	Purdue University	Indiana/Illinois
Laura G.Tiu	Ohio State University	Ohio

REASON FOR TERMINATION

Work on the objective was completed.

PROJECT OBJECTIVE

Provide in-service training for Cooperative Extension Service (CES), Sea Grant Advisory Service, and other landowner assistance personnel.

PRINCIPAL ACCOMPLISHMENTS

In-service training for CES and Sea Grant personnel and other landowner assistance personnel have been held in most of the states in the region. Training has been in the areas of basic aquaculture, species-specific technologies, e.g., yellow perch, and safe seafood handling including Hazard Analysis Critical Control Point (HACCP). Many of these individuals have, in turn, trained industry representatives in respective subject matter.

To help prevent the spread of aquatic nuisance species (ANS) via cultured fish and baitfish, and to provide the industry with a tool to demonstrate to natural resource agencies that private fish culturists can provide a ANS-free product, the ANS-HACCP approach was developed by Gunderson and Kinnunen. Developed materials include a manual and video for use in the training sessions as well as a related poster use in for retail outlets.

The National Association of County Agricultural Agents Annual Meeting and Professional Improvement Conference in Green Bay, Wisconsin was held July 13‑18, 2003. NCRAC extension contacts who participated in this workshop included Gunderson, Kinnunen, and Morris.

IMPACTS

< In-service training for CES and Sea Grant personnel has enabled those professionals to respond to initial, routine aquaculture questions from the general public.

RECOMMENDED FOLLOW-UP ACTIVITIES

< Maintain a list of in-service opportunities on an annual basis for CES and Sea Grant personnel.

< Develop a list of regional aquaculture personnel and their respective areas of expertise. This list can then be provided to regional CES and Sea Grant personnel for their references.

PUBLICATIONS, MANUSCRIPTS, AND PAPERS PRESENTED

See the Appendix for a cumulative output for all NCRAC-funded Extension activities.

SUPPORT

YEARS

NCRAC-

USDA FUNDING

OTHER SUPPORT

TOTAL

SUPPORT

UNIVER-

SITY

INDUSTRY

OTHER

FEDERAL

OTHER

TOTAL

1989-91

$107,610

$237,107

$344,717

1991-93

$94,109

$152,952

$247,061

1993-95

$110,129

$198,099

$250,000

$55,000

$503,099

$613,228

1995-97

$31,204

$149,325

$5,000

$84,000

$238,325

$269,529

1997-99

$38,000

$110,559

$148,559

1999-01

$94,000

$108,124

$202,124

2001-03

$46,500

$99,702

$146,202

TOTAL

$521,552

$1,055,868

$5,000

$334,000

$55,000

$1,449,868

$1,971,420

EXTENSION^{^[4]}

Progress Report for the Period

May 1, 1989 to August 31, 2004

NCRAC FUNDING LEVEL: $535,802 (May 1, 1989 to August 31, 2004)

PARTICIPANTS:

Fred P. Binkowski	University of Wisconsin-Milwaukee	Wisconsin
James M. Ebeling	Ohio State University	Ohio
Robert D. Espeseth	University of Illinois	Illinois
Donald L. Garling	Michigan State University	Michigan
Jeffrey L. Gunderson	University of Minnesota-Duluth	Minnesota
F. Robert Henderson	Kansas State University	Kansas
Chester L. Hill	North Dakota State University	North Dakota
John N. Hochheimer	Ohio State University	Ohio
Paul B. Jarvis	North Dakota State University	North Dakota
Anne R. Kapuscinski	University of Minnesota	Minnesota
Terrence B. Kayes	University of Nebraska-Lincoln	Nebraska
David L. Klinkebiel	North Dakota State University	North Dakota
Ronald E. Kinnunen	Michigan State University	Michigan
Christopher C. Kohler	Southern Illinois University-Carbondale	Illinois
David J. Landkamer	University of Minnesota	Minnesota
Charles D. Lee	Kansas State University	Kansas
Frank R. Lichtkoppler	Ohio State University	Ohio
Terry A. Messmer	North Dakota State University	North Dakota
Jeff Mittlemark	University of Minnesota	Minnesota
Joseph E. Morris	Iowa State University	Iowa
Kenneth E. Neils	Kansas State University	Kansas
Robert A. Pierce II	University of Missouri	Missouri
Shawn H. Sanders	North Dakota State University	North Dakota
Daniel A. Selock	Southern Illinois University-Carbondale	Illinois
John P. Slusher	University of Missouri	Missouri
Fred L. Snyder	Ohio State University	Ohio
Brian R. Stange	North Dakota State University	North Dakota