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Kuterra Salmon Farm Nears Economic Viability

Ottawa Citizen
Jan. 26, 2016

Land-based salmon farm on Vancouver Island nears economic viability

Randy Shore

North America’s only land-based Atlantic salmon farm battled through technical and equipment issues in 2015, but the operators are edging close to covering production and overhead costs.

The Kuterra land-raised Atlantic salmon farm — a commercial pilot project located near Port McNeill on Vancouver Island — has been forced to replace several substandard pumps, install additional oxygenation and carbon dioxide stripping capacity and repair a malfunctioning feeding system that over-fed the fish by up to 75 kilograms a day.

Equipment problems forced the operators to impose feed restrictions and lower temperatures to slow growth of some fish while repairs were made, leading to poor growth.

As a condition of its philanthropic funding from Tides Canada, Kuterra releases regular detailed reports on its technical operations and financial results in order to demonstrate the viability of land-based Atlantic salmon aquaculture.

“One of our goals is to lower the risk to new entrants to this industry by providing them with data and information that will help inform their decision-making,” said Garry Ullstrom, CEO of Kuterra.

The facility was designed based on trials run by the Freshwater Institute in West Virginia that failed to accurately portray some biological issues.

“The fish produce far more CO2 and consume far more oxygen than we expected,” said Ullstrom.

The first three cohorts of Kuterra salmon consisted of 23,000, 33,000 and 40,000 fish as the facility ramped up, but fungal infection on the smolts entering the facility led to unexpected mortality.

Fungus is killed when smolts go directly into the ocean, but Kuterra raises fish in freshwater necessitating the application of salt when young fish enter the facility.

Mortality from all causes ranged from 13 to 29 per cent in the first three cohorts, but projected mortality has since dropped to less than 10 per cent, Ullstrom said.

The next cohort of about 45,000 salmon — the facility’s sixth — is now being harvested for sale, with most of the unanticipated costs of commission well behind.

Kuterra will break even in the next fiscal year, Ullstrom said.

The facility was built with $9.5 million of government and charitable investment, including $1 million from the Namgis First Nation, which owns the plant.

The first groups of fish to pass through the facility have been prone to a number of quality issues, including “paling out,” discoloured flesh due to early sexual maturation, under-sized fish and off flavour.

“We don’t grade the fish at each harvest to avoid handling, which leads to slower growth because it stresses the fish, so we harvest at all sizes,” Ullstrom explained.

Kuterra earns about $9 per kilogram of salmon (sold head on, gutted) from its distributor Albion Fisheries.

Fish that meet all of Albion’s quality requirements typically sell for 15 to 35 per cent more than conventional net-pen Atlantic salmon, according to Albion vice-president Guy Dean.

Demand for the product — certified sustainable by SeaChoice, Seafood Watch and Ocean Wise ­— has expanded considerably since Kuterra was introduced in April, 2014.

“We are getting more interest from U.S.-based retailers than before,” said Dean. “As Kuterra gets more exposure, more and more people are asking about it.”

Kuterra has some high profile local fans, including Ned Bell, chef at Yew Seafood in the Four Seasons Hotel Vancouver, who said its “consistency, flavour and quality are second to none.” Safeway is the only grocer in B.C. that stocks Kuterra.

Closed-containment aquaculture answers many of the pressing environmental issues that the ocean-based industry is wrestling with, including Atlantic salmon escapes, chemical controls for sea lice and the spectre of disease transfer to wild fish.

When conditions in the tanks are carefully controlled, fish grow faster with less feed and draw a higher price in the market. Atlantic salmon in closed-containment systems grow to market weight in 12 to 15 months, compared with 21 to 24 months in ocean-based net pens.

rshore@postmedia.com

http://www.ottawacitizen.com/life/land+based+salmon+farm+vancouver+island+nears+economic/11677279/story.html