The U.S. state of Minnesota recently released a draft of a new state aquaculture plan, drawing a wide array of public opinions that all agree the industry has potential in the state.
Just how much potential, though, has been up for debate.
The draft plan, commissioned by the Minnesota Department of Agriculture (MDA) and prepared by Portland, Maine, U.S.A.-based Steamboat Consulting, is the first of its kind since 1989 in the state, and outlines a strategy for effective investment in the future of Minnesota aquaculture.
The plan seeks to outline how the state can bring in USD 10.5 million (EUR 10.2 million) in annual revenue across all aquaculture sectors by 2034, which would nearly double the state’s current USD 5.5 million (EUR 4.8 million) annual aquaculture revenue, according to the 2023 U.S. Department of Agriculture (USDA) aquaculture census.
Of the three Minnesota aquaculture sectors – bait fish, sport fish, and food fish – the “largest long-term potential” is in the food fish sector, according to the draft.
“We believe there's a huge opportunity, especially with food fish, but that’s also where the most economic challenges lie,” said Edward Aneshansley, who is one of the authors of the Minnesota plan and the president of Massachusetts-based EdA-Aquatic Design Services, which focuses on the development and construction of aquaculture technology. “Our recommendations are really for conservative growth to develop and understand the industry. This is an industry that grows relatively slowly, and if you try to do things too quickly, you make mistakes and get ahead of what the infrastructure can support.”
In 2023, Minnesotan food-fish aquaculture operations generated total annual revenue of only USD 210,000 (EUR 202,500), according to the USDA. The majority of aquaculture in Minnesota focuses on the sport fish and bait fish sectors, which support the state’s USD 5.9 billion (EUR 5.7 billion) annual recreational fishery.
Though Aneshansley and others are shooting for moderate, measured growth, some stakeholders, including members of the Minnesota Aquaculture Association (MNAA), a trade group composed of stakeholders, scientists, and volunteers supporting aquaculture development, believe the projections vastly underestimate the potential of Minnesota’s food fish sector.
According to a presentation drafted by the MNAA, the state can produce USD 3 billion (EUR 2.9 billion) in annual aquaculture revenue across all sectors in the next decade.
“This plan is looking at the industry given the current situation with infrastructure,” said Clarence Bischoff, the board president of the MNAA and the CEO of Blue Water Farms, a Minnesota startup aiming to be the first to commercially raise walleye at a large scale in the U.S. “Our projections are based on enhanced infrastructure and what we think is going to be possible. That's what it boils down to.”
Bischoff said the first state aquaculture plan brought forth in this nature in 35 years should be a time to dream big and show legislators, investors, and consumers what is possible.
“It's the power of defining goals, and that's what we need to do here with this aquaculture plan,” he said.
In the U.S., total sales of aquaculture products in 2023 totaled USD 1.9 billion (EUR 1.8 billion), increasing 26 percent from 2018, according to the USDA. The industry is largely dominated by operations in Mississippi, Louisiana, Florida, Alabama, and Washington, with catfish mostly raised in outdoor ponds in the U.S. South and oysters grown in the ocean as the top farmed species.
However, innovations in aquaculture – namely recirculating aquaculture systems (RAS) – are opening the door for inland states like Minnesota to sustainably raise finfish.
“We're really not promoting any kind of open cage culture in lakes or open water bodies [in the state plan],” Aneshansley said. “We're focused on technology that grows finfish responsibly and that respects the state’s natural resources and the existing industries.”
Additionally, feed innovations, such as feed made with insects and soy, are reducing pressure on wild stocks. In Minnesota, this is of particular interest, as the state ranks as one of the top soybean producers nationwide.
Minnesota startups, such as Bischoff’s Blue Water Farms, are planning to develop their own feed to reduce costs and take advantage of “locally produced, sustainable products.”
“I feel the vulnerability in aquaculture is the feed,” Bischoff said. “It's a major cost of raising fish and supplies have been difficult. I thought, ‘Let’s develop our own feed that's nutritious and affordable.’”
Aneshansley told SeafoodSource that these innovations are promising, but that the draft version of the state plan is taking a more conservative approach with projections because of the serious challenges currently stunting growth – including a lack of private capital and government incentives, high input costs, and stringent regulations.
“It's a financial issue right now, and it's a capital investment issue. I just don't think the private equity industry or finances are quite ready to jump onboard with commercial aquaculture at this point,” Aneshansley said. “Everybody is concerned about the economics behind long-term, large-scale recirculating aquaculture.
Aneshansley pointed to several reasons private investors are wary to enter the industry, including “the slow rate of return, the time it takes to develop and design systems and construct and start to build biomass in these systems, and the time it takes to actually hit production goals.”
Another reason why investors have not gotten on board yet is a lack of education and publicly available information, Glenn Ford, the CEO of InCity Farms, an aquaponics startup aiming to open five facilities across the U.S. Midwest said. According to Ford the innovations bolstering aquaculture’s sustainability need to be properly relayed to both consumers and investors in order for the industry to grow in such states as Minnesota.
“We've done a really poor job of explaining our ability to raise fish in really clean environments and to allay any fears that people have about eating farmed fish,” Ford said. “When you think of farmed fish, sometimes you think of nets placed in large bodies of water, fish clustered in nets, and waste problems. That’s not what’s going to happen in Minnesota. [But,] no one has done a really good job of talking about how waste in closed systems can be used as fertilizer to grow land-based crops or to do it in aquaponics, where that waste is actually used to grow plants directly. The opportunity for sustainable farming is huge.”
Ford, in launching InCity Farms, has experienced financing challenges firsthand as the firm has tried to raise more than USD 200 million (EUR 193 million) over the past several years, which he said will hopefully become a reality in spring 2025.
“Investors are still very early in their understanding of the inland aquaculture world,” Ford said. “It has taken me years to get there, to find that right combination of financing, and, quite frankly, to find the right kind of private equity people who are not trying to control your business on the front end so much that it makes it mistake-prone. The skill of aquaculture lies with the entrepreneur, and it has to stay there.”
Even if startups are able to attract investors, they still have to deal with larger market dynamics. Aquaculture has struggled to grow in the U.S. due to competition with foreign producers who benefit from lower production costs and fewer regulatory constraints, according to Minnesota’s state plan.
Minnesota aims to partially combat this by focusing on more niche markets, such as the state’s home in the Midwest. Walleye, for example, could find success in an untapped market, according to the plan, as the state mostly imports walleye from commercial fishermen in Canada currently.
“If you look at Minnesota and the Northern Midwest in general, there's a different market for seafood,” Aneshansley said. “As you start to move away from the oceans, it's focused a lot around lake fish, like perch and walleye. I think there's an opportunity for those particular species in Minnesota to offset Canadian imports.”
The missing piece, though, is the government supporting the industry and paving the way for growth, according to Ford.
“Some of the biggest incentives that are given in this country, other than to the military, are incentives in the Farm Bill,” Ford said. “Aquaponics and aquaculture need to be a regular member inside of the bill, and that was just recently done. The industry now needs time to build upon that and for the USDA to develop some more skills around supporting the industry.”
How much time it takes is the question stakeholders are seeking answers to.
If Ford is successful in building his vision of five facilities across the Midwest, including in Minnesota’s largest city Minneapolis, he said just one of his aquaponics facilities will produce USD 50 million (EUR 48.2 million) in annual revenue after five years.
Bischoff, with Blue Water Farms, is hoping to finish raising USD 20 million (EUR 19.3 million) for his indoor walleye farm by the end of the winter this year.
“We have the plans and the people to do this, and as soon as we have the investor commitment, we can go to work,” Bischoff said.
Blue Water Farms is aiming to be operational by the spring of 2026, and its prototype form will aim to produce 1,000 metric tons of walleye per year.
The key to any aquaculture success in Minnesota, according to Bischoff, will be in developing infrastructure and partnerships, including with “breeding programs, research programs, educational programs, and financial incentives.”
“I know a lot of people who are eager to move forward,” he said. “If we had the right kind of loan guarantees available, it could be a win-win situation for everyone.”
With the public input period closed, the plan will continue to be edited and will be presented in its final form to the Minnesota legislature in February 2025.
