Name: What It Costs to Operate an Underwater Cage Oyster Farm
Uploaded: 2023-08-01T09:30:00Z
Duration: 8 min 29 s
Description: Ward Oyster Co. is one of the largest cage oyster farms on the East Coast, selling 4 million oysters and tens of millions of larvae each year. But it takes years for oysters to mature, and in that time, a lot can go wrong. Photo: Graham Copeland

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Ward Oyster Co. is one of the largest cage oyster farms on the East Coast, selling 4 million oysters and tens of millions of larvae each year. But it takes years for oysters to mature, and in that time, a lot can go wrong. Photo: Graham Copeland

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What It Costs to Operate an Underwater Cage Oyster Farm

Narrator: These are oysters.

At first, it kinda looks like quinoa.

Narrator: More than 40 million pounds of oysters are produced in the US each year, and that supply has struggled to keep up with demand. It takes up to three years for oysters to grow and be ready to eat, and customers tend to buy them for about $3.

It's gonna be dirty, it's gonna be hard, it's gonna be physical, and it's gonna be time consuming.

Narrator: John Vigliotta is the owner of Ward Oyster Company in Virginia. It's one of the largest fully integrated oyster farms on the East Coast spanning more than 850 acres of river floor, and it raises around 4 million oysters each year. It sells these oysters to distributors for about 0.40 cents each. As people continue eating more seafood, the global oyster market is growing, but maintaining an operation like this takes a lot of work.

Hmm.

You know it's gotta be tasty when you can eat it raw.

Narrator: And it costs this farm around $1.9 million per year. It's a complicated web of processes with a lot that can go wrong.

This building is our conditioning building here at Ward Oyster Company. Starting in November, we start bringing in oysters to get ready for spawns later on in the season. Here we have some of our breeding oysters for the hatchery. They're kind of bred for low salinity.

Narrator: Lots of the company's breeding oysters come from VIMS, the Virginia Institute of Marine Science. They're bred for high survival, growth, and meat yield.

That comes with a price. They charge 15% of whatever our sale is on seed oysters, so we will pay probably 100, maybe over $100,000 just in royalty fees.

Narrator: Another big expense for the company is electricity and propane, which it needs to keep the oysters alive and spawning on schedule. That adds up to about 70 to $75,000 per year.

We usually start cold and then slowly raise the temperature of the water while increasing the food to kind of simulate spring. It usually takes between 6 and 10 weeks to get the oysters right, depending on conditions.

Narrator: Once the breeding oysters are ready to spawn, staff shuck them, and identify whether they're male or female.

Jared: All right. We have a girl.

Narrator: From a few thousand breeding oysters, Ward Oyster Co. ends up with about 1.5 billion larva. Around 200 to 250 million will set, and about 50% of those will make it to half an inch. Some will be sold to other oyster farms that don't have hatchery facilities while the rest will continue growing to market size at Ward.

It couldn't be any more sustainable. It's oysters well spent.

Narrator: The entire process takes about two years and involves the work of about three dozen people. As the oysters grow, they move from these tanks to these 10,000 gallon tanks. To feed up to 100 million baby oysters in each tank, they need a lot of algae.

We're usually feeding between 1,500 and 2,500 gallons of algae each day. There's enough food in this room to maybe accommodate the facility for two or three days. When it starts to look like pond water, it gets me excited.

Narrator: After feeding the baby oysters for about a month, the oysters come to this bottle system where they're fed directly from the river.

There's a lot of maintenance that goes into maintaining the bottles in particular, but really everything here. These animals are really filtering the water. They're eating voraciously. You can see how opaque the water is. My hand disappears right there. And then right here in this silo, it's crystal clear. Quarter inch animal like in this tank, you know, it's been out of the hatchery for probably a month, six weeks, is well on its way to getting planted in the field. These are some animals that were retained on a 7/16th screen at the beginning of this week, and it looks to me like they are just about ready to move on up and go out onto the farm.

So let's get the ropes, let's get your life jackets on, and let's ride. We work six days a week, most of us here. I usually have three to four people. We're all trained to do this job, and that's what we do every day. We are raising these oysters from babies to market oysters. After a good six or seven months, that's what we're working with.

Oysters grow, and they grow exponentially. The last five years our labor expense has not been below $1 million. The question each year is how much over a million dollars is it gonna be?

Hey, they're going back overboard. Right now we have almost 4,000 cages, and we're hoping to get even more soon.

Narrator: These cages cost about $200 each, so putting 4,000 cages in the water has cost about $800,000. After months of being underwater, many cages will need repairs.

John: Our repair costs run probably 100, maybe 150,000 per year.

Narrator: That's just for the cages. Other repairs around the farm bring the figure higher.

Beautiful.

Every now and then you might have a machine malfunction, but we come prepared if something breaks down. We have other parts that get us back in.

Narrator: The oyster business can be unpredictable, particularly due to climate change. Rising sea levels are increasing water salinity and making water more acidic. Both these things have a major effect on oysters.

An oyster has a calcium shell, and as the water becomes more acidic, you'll see that the calcium production for an oyster can be hampered. We've been very fortunate in our location to do well with what we've been producing.

Narrator: Ward has insurance to cover everything from floods to fire, product, and other liabilities, and employees when they're on the water.

It's bad weather, we don't come out. We try to keep enough oysters close and locally so we won't have to go out in the bad weather. We don't want to do that. We try to keep safety first.

Narrator: Ward Oyster Co. is on low lying areas that are prone to flooding, which means flood insurance can cost 12 to $15,000 per year.

This dock was one of the three that survived Hurricane Isabel. We had about six foot of water in here. We had to get a brand new ice machine. It's up in the air. That's not by accident. It cost us about $15,000. We spend probably somewhere around $70,000 a year in insurance.

Narrator: Ward spends about $100,000 dollars a year on new cages, which is about a third of its annual supply budget. After the oysters come out of the cages, they're graded for size with machines like this. The smallest ones stay in half inch cages. Larger ones go in one inch cages. And once they're about three inches in size, they're finally big enough to be sold to restaurants, grocery stores, and other buyers. It usually takes about two years for oysters to get to that point. After the machine grades them, the staff checks the oysters by hand and then loads them into these boxes, which also run the company about $100,000 per year.

A box like this is gonna cost roughly 2, 250, and we might send out over 1000 a week. This particular box had a required minimum that costs like $17,000. It's a fairly significant expense, but once you spend the 17,000, you're good for a while.

Narrator: Once they're boxed, the oysters go into the cooler and then refrigerated trucks where they're sent to buyers. These trucks cost about $100,000. Other large equipment can also add up. A skid-steer costs about $50,000, but they aren't part of the farm's annual budget.

We do not set aside a certain budget for capital expenses. If the year is going along poorly, we might do more repairs than replace.

Narrator: It all adds up to about $1.9 million in expenses, and the company has to recoup those costs by selling market oysters and also selling eye larvae and other seed to other aquaculture companies.

Our farm is one of the larger oyster farms on the East Coast. There are a lot of people that have a farm and a hatchery, but they don't sell seed to other farmers. We sell seed all up and down the East Coast from Florida to Rhode Island. We're helping a lot of other farms actually grow and compete in the industry itself.

How This Virginia Aquaculture Farm Raises Four Million Oysters for Market

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How This Virginia Aquaculture Farm Raises Four Million Oysters for Market

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