Dynamic, stochastic model of a land-based summer flounder Paralichthys dentatus aquaculture firm

Exploring the possibilities for commercial aquaculture has historically concentrated on reducing production uncertainty by focusing on an animal's biology and the engineering of the production facility. However, the aquaculturist faces both production and market uncertainty, both of which may significantly affect the economic feasibility of a production facility. We developed a dynamic stochastic model to compare alternative production and marketing scenarios and used the net present value of returns to evaluate the scenarios. Based on the model and the scenarios we examined, firms producing summer flounder Paralichthys dentatus are unlikely to be profitable unless they locate near and use a source of salt-water, sell their product predominately to sushi chefs (or other premium market outlets) who desire medium-sized live fish, and engage in strategies that account for market dynamics.