An Economic Analysis of Investment in Assessing 

Development of Manufactured Feeds for Southern Bluefin Tuna

FRDC is a major investor in the Aquafin CRC and co-invest in many projects that meet both the organisations and industries needs.

FRDC/CRC Projects assessed in this Benefit Cost Analysis were:

  • Optimisation of Farmed Southern Bluefin Tuna Nutrition to Improve Feed Conversion Efficiency and Reduce Production Costs (FRDC project number 2001/249)
  • Commercialisation Trials for a Manufactured Tuna Feed (FRDC project number 2001/201)


In 2001 the farmed Southern Bluefin Tuna (SBT) industry was reliant predominantly on imported feeds, mainly baitfish from USA and northern Europe. The imported feed exhibited varying quality (for example, fat content varied from 4% to 20% in sardines) as well as fluctuating prices, and availability. In addition there were some environmental considerations and quality issues with the imported bait fish. Hence the Australian industry had a driver to develop alternate feed strategies and look at replacement manufactured feeds options to improve feed security for the industry.

At the time the projects commenced little was known about the nutritional requirements of SBT. Providing a good base of information would identify the key areas that should be addressed to improve nutrition management. It was hoped that this would in turn lead to an ability to improve growth rates, produce improved feed conversion ratios and as such save feed, reduce refrigeration costs for feeds, and improve tuna product quality.


The objectives for the two projects was to produce a manufactured feed that performed as well as baitfish in terms of growth rate, feed conversion and const. In addition the projects aimed to evaluate and compare the survival, growth rate and condition of the fish, and the end product quality and market price fed manufactured pellet feed as compared to traditional bait fish feeds. Based on this information the projects would develop feed handling strategies, equipment and protocols that could be successfully applied to manufactured feeds.


The likely benefits are identified in a triple bottom line framework as follows:


  • Use of the form-u-bait, a least cost formulation program to guide farmers on the best use of feed (manufactured and bait fish) to arrive at the optimal growth rate (protein and fat levels) at the least cost.
  • Potential cost savings in delivery and distribution where manufactured feeds are used.
  • Greater effectiveness and efficiency in formulating and using manufactured feeds in those cases where they may be used.
  • Reduced the risk of being dependent on bait fish (local or imported) with their inherent fluctuations in price, quality and availability.


  • The research has the potential to impact on the environment through influencing and manipulating feed strategies to reduce over feeding and faecal loads being minimised.
  • Environmental benefits exist from using pellets over baitfish. However, preliminary data suggests that while feed utilisation can be better controlled using pellets, optimising nutrient composition, and any waste feed can be assimilated i.e. by scavengers more easily than baitfish.


  • The availability of an alternative feeding strategy for the industry, if needed, means farmers are less likely to be impacted on by a disruption in baitfish supply.


It is understood that several tuna farmers are using the least cost feed formulation program for baitfish feed (form-u-bait).

Manufactured feeds were being used by a small number of companies in the industry in 2002, but the practice was common. However, it is possible that manufactured feeds will be used more widely in the industry in future due to:

  1. the uncertainty of continued supply of local and imported baitfish at lower prices than manufactured feeds.
  2. the potential for local baitfish use to be minimised on environmental grounds or from concerns over species to species feeding.


The two research projects in this analysis were the most significant investment into manufactured feeds for tuna made by the industry and others. It is assumed that 80% of the benefits from the availability of the manufactured feed technology can be attributed to the two projects.


Primary beneficiaries from both projects will be the commercial tuna farmers at Port Lincoln in South Australia. It is also worth noting the analysis did not take into consideration flow on benefits outside the industry to other aquaculture sectors who may also adopt some of the results.


The evaluation shows that the investment by the CRC and partners to develop feed and feeding strategies for farmed SBT production is likely to provide positive economic benefits. The investment in the two projects of $5.7 milion is expected to provide a net present value of $14.6 m and a benefit cost ratio of 3.2 to 1.