An Ag Giant Is Spending More Than $1 Billion to Get Into Fish Farming

Cargill is buying a Norwegian salmon-feed company.

Sockeye salmon. (Photo: Darryl Leniuk/Getty Images)

Aug 18, 2015· 3 MIN READ
Tove Danovich is a journalist based in Portland, Oregon.

Though humans long ago tamed the land with farms and feedlots, the sea has always been a wild place. Even now, commercial fishing is one of the most dangerous occupations in the United States. Yet little by little technology has found a way to tame the oceans too, making it possible to raise fish in confinement on a massive scale. Following decades of strong growth—between the early 1950s and 2004, global aquaculture grew from a production of less than 1 million tons to 59.4 million tons, according to the FAO—the same companies that have helped turn the hog farm into a factory are now getting into the business.

Cargill, one of the largest agricultural companies in the world, is making big investments in aquaculture. On Monday, it announced a 1.35-billion-euro deal (roughly $1.5 billion) to purchase the salmon-feed-manufacturing company EWOS. The acquisition is “a strategic investment in our long-term growth and evidence of our commitment to the growing aquaculture industry,” David MacLennan, Cargill president and CEO, said in a statement.

This large purchase is just one of many for Cargill, which became part of a $30-million joint venture to build shrimp-feed facilities in July and has “aquaculture capabilities” in Mexico, Central America, China, United States, Southeast Asia, India, and Ecuador, according to the company’s press release.

While overfishing is quickly depleting supplies of wild fish, that alone doesn’t explain Cargill’s move. It’s part of a larger shift that has made aquaculture the fastest-growing segment of animal farming in existence. In 2011, world production of farmed fish outpaced beef for the first time, according to the Earth Policy Institute. Consumption of red meat has gone in and out of fashion over the last decades, with diets like Atkins and Paleo urging people to eat more of it and concerns over saturated fat and cholesterol warning them away from the stuff. Meanwhile, fish has been on a steady climb to the top—and salmon, in the U.S. at least, is second only to shrimp in popularity.

“With the need for protein expected to grow by 70 percent worldwide by 2050, farmed fish and shrimp offers one solution to meeting this demand,” Sarena Lin, president of Cargill’s Feed & Nutrition business, said in the statement, “and Cargill intends to play a major role in this growing and important market.” A 2014 World Bank report on the future of fish projected that farmed fish will equal wild fish catch by 2030.

There is a rising demand for protein in general as the world population increases, but the stunning growth of aquaculture raises serious questions. In addition to feeding grain to farmed fish, carnivorous species like salmon often consume fishmeal or fish oil made from wild-caught forage fish. The industry is reducing its reliance on fishmeal given to farmed fish, but rising demand makes it likely that the use of forage fish in aquaculture will either continue at current levels or grow. A study on the impact of fishing on forage-fish populations found that fishing can have “far reaching consequences on marine food webs unless safeguards are in place to avoid depleting forage fish to dangerously low levels, where dependent predators are most vulnerable.” Or, more simply, big fish need small fish to eat, and the circle of life taught in elementary school classrooms is real.

Compared with beef and other land meats, fish are much more efficient at converting feed into meat. A pound of chicken requires 1.9 pounds of feed, while beef takes 8.7 pounds. Fish are closer to a break-even ratio, at only 1.2 pounds, according to the National Oceanic and Atmospheric Administration. This effect is compounded by the high price of grain as well as limited land for free grazing. Not only do beef and its ilk have a higher environmental footprint than fish, but they have higher costs—and less room to grow.

Yet concerns over the environmental impact of aquaculture make its growth seem more like a necessary evil than a celebration. According to a 2013 USAID report, “Much of the world’s initial aquaculture development occurred during times when technical capacity, governance, policy, and oversight were weak.” With the fast growth of the industry, people have started trying to avoid past mistakes and making new and existing aquaculture operations sustainable for the environment and the communities that rely on it for income. Producers in Norway have been particularly successful on this front: adopting the use of tiny lumpsucker fish to control sea lice instead of relying on pesticides and using far less antibiotics than fish farms based in Chile, for example.

That the demand for farmed fish will continue to rise owing to increased demand from an increasing population and a depleting wild fish supply is fairly undisputed. And fish grown on farms need to be fed. Just as many terrestrial farmers have long turned to Cargill—a major player in other agricultural feed types—for the corn and soy and other fodder their livestock are raised on, salmon farmers will soon be doing the same.