JOURNAL OF THE WORLD AQUACULTURE SOCIETY Vol. 42, No. 4 August, 2011 The Effect of Hybrid Catfish Fingerling Prices on the Relative Profitability of Hybrid Channel Catfish Ganesh Kumar and Carole Engle 1 Aquaculture/Fisheries Center, Mail Slot 4912, University of Arkansas at Pine Bluff, 1200 North University Drive, Pine Bluff, Arkansas 71601, USA Abstract Previous studies have indicated that the price premium charged for hybrid catfish fingerlings may be a significant factor in the adoption and profitability of hybrid catfish production. An enterprise budgeting simulation analysis was developed to compare costs, risk, and effect of hybrid fingerling costs. Feed, fingerling, and total costs ($/ha and $/kg) were highest for hybrid catfish production, intermediate for NWAC-103, and lowest for normal channel catfish production. Net returns were highest for hybrid catfish production, but breakeven prices were also highest. Risk analysis showed that downside risk (risk of losing money) was higher for hybrid production for all farm sizes. Risk- averse farmers would not select hybrid catfish at the mean fingerling values used in the analysis. However, at hybrid fingerling prices less than $0.0081/cm, hybrid catfish production was superior in profitability and breakeven cost of production. Thus, for hybrid catfish production to be preferred economically to normal channel catfish, the price premium for hybrid catfish fingerlings can be no more than 84% ($0.0037/cm) above that of normal channel catfish fingerlings and 57% ($0.0025/cm) above that of NWAC-103 fingerling prices. Catfish, Ictalurus punctatus, is the largest segment of US aquaculture (USDA 2008). Research and development programs in genetic enhancement have led to the development of hybrid catfish, I. punctatus female × Ictalurus furcatus male ( Yant et al. 1975 1976; Dun- ham et al. 1983, 1987, 1990, 2000; Guidice 1966; Wolters et al. 1996; Dunham and Brum- mett 1999; Bosworth et al. 2004; Li et al. 2004; Jiang et al. 2008), and other selected strains (Li et al. 1998, 2001; Silverstein et al. 1999; Jackson et al. 2003; Bosworth et al. 2004) that are reported to demonstrate superior perfor- mance in terms of production and processing. Hybrid catfish technology has been adopted by some farmers. The 2003 survey of the cat- fish industry showed that 1.2% of foodfish produced were hybrids, as compared to 2.4% NWAC-103 catfish, 2.6% Kansas strain, 22.4% Goldkist strain, and 64.4% of unknown lines (USDA-APHIS 2003). Reported production of hybrid fingerlings increased to approximately 1 Corresponding author. 3–5% of the fingerlings sold in the industry in 2009 (USDA 2009). Although there has been an increase in the production of hybrid cat- fish, the technology has not been adopted as quickly as expected. This may be due in part to restricted availability of hybrid catfish fin- gerlings, but Ligeon et al. (2004a) suggested that high prices of hybrid catfish fingerlings hin- der dissemination of the technology. Kumar and Engle (2010) similarly reported that the higher price of hybrid catfish fingerlings resulted in negative net benefits in foodfish production as compared to NWAC-103 catfish, I. punctatus, in spite of the improved feed conversion ratio of the hybrids measured in their study. Hybrid catfish production technology is dis- tinct from the current technology used to grow channel catfish. Production characteristics and the resulting cost structures differ in several respects. Ligeon et al. (2004a) reported that it cost 25% less to produce hybrid ($0.033/fin- gerling) than channel catfish ($0.044/finger- ling) fingerlings, for 16.5-cm fingerlings. The lower production costs and higher net returns  Copyright by the World Aquaculture Society 2011 469