Economic Conditions for Improving Profitability through Limited Liability Partnerships for Cultivating Yellowtail (Seriola quinqueradiata) in Japan

Abstract

This study investigated Yellowtail (Seriola quinqueradiata) farmers in Japan. It used the net present value method to quantitatively clarify the economic conditions through which aquaculture farmers could improve profitability engaging in joint operation via a limited liability partnership. The analysis showed that if aquaculture farmers jointly ship the fish to a local processing company at the same 670 yen/kg average unit price in the wholesale market, then the investments were profitable as long as the unit cost of the purchased extruded pellet feed was no greater than 169 yen/kg. In addition, if farmers shipped Yellowtail to the local processing company at 831 yen/kg, which was 24% higher than the average unit price in the wholesale market, then the investments were profitable as long as the unit cost of the purchased extruded pellet was no greater than 226 yen/kg. If aquaculture farmers who have established an LLP decide to jointly ship to a local processing company, it would be important to set the unit shipping price of cultured Yellowtail and the unit cost of the purchased extruded pellet in the terms of a contract with that local processing company in order to ensure continued profitability.