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Oyster Entrepreneurs

By Christina Haley O'Neal, posted Jun 16, 2017
Local oyster farmer Tim Holbrook works with researchers looking into the industry’s growth potential in southeastern North Carolina. (Photo by Chris Brehmer)
Tim Holbrook cruises to the pristine waters of his 3-acre oyster farm on Masonboro Island Reserve. He straps on his waders, plunges into open water surrounded by the beaches of barrier islands, marsh grass and wildlife and sifts through his crop of one million oysters.

“I’ve got the best office in the world,” says Holbrook, local farmer and owner of Masonboro Reserve Oyster Co.

On the reserve, Holbrook is not only growing his crop for profits but is also aiding researchers in different studies that could grow and shape the future of this centuries-old industry.

Holbrook is one of many oyster entrepreneurs across the state and area investing in a more intensive form of shellfish aquaculture. Local officials think southeastern North Carolina, along with the rest of the state, could become a more competitive market.

“There are fascinating innovations emerging in the seafood industry. CFEDC would like to see southeast North Carolina become a hub [for] those emerging businesses and entrepreneurs,” said Paul Pascarosa, chairman of the Cape Fear Economic Development Council, which is gearing up for a panel discussion this month on “Innovation and the Seafood Economy.”

Holbrook understands the challenges of commercial fishing, but changes over the past few years have made oyster farming a “viable industry,” he said.

“We realize that, especially in oysters … harvesting is not a sustainable industry,” Holbrook said. “Most scientists and economists have determined that the future of the global food source is through aquaculture.”

Recent and developing legislative changes, science and technology have created a “perfect storm” for up-and-coming entrepreneurs, Holbrook said. Farmers are now on the cutting edge of a more business-savvy industry, coupled with a greater demand in the foodie scene for oysters on the higher-priced, half-shell market.

North Carolina, however, has a lot more growing to do, Holbrook said. While, most of the state’s oysters come from outside sources, Holbrook said the problem is in the supply of a home-grown crop.

The state’s industry reached a farm gate value of more than $1 million in 2016, compared to Virginia, which has grown its value to more than $15 million, according to Chuck Weirich, marine aquaculture specialist with N.C. Sea Grant, a state and federally funded program headquartered in Raleigh that supports coastal communities.

While the state’s oyster industry may not have the revenues of its neighboring state, the landscape is similar and North Carolina has a lot of it, Weirich said.

Steve Murphey, section chief of habitat and enhancement for the N.C. Division of Marine Fisheries, said that the 2,000 acres of water currently under lease to shellfish farmers make up less than 1 percent of waters available for leasing in the state.

More farmers are catching on. Shellfish leases have averaged between 10 and 12 applications per year between 2010 and 2015. But in 2016, that number increased to a total of 52 leases, including 19 water column leases. This year, the number of applications is already at 30, Murphey said.

“What we are seeing now is less of a commercial fisherman who wants to make a living. We are seeing entrepreneurs with money in the bank to invest, applying for these leases,” Murphey said.

Water column leases cost $110 per acre a year and are treated like real property. Farmers are required to meet a production quota to keep their lease.

“The Division of Marine Fisheries, has worked very hard to streamline the process … to assist entrepreneurs,” Holbrook said. “North Carolina is poised to be the Napa Valley of oysters. It could have a huge impact on coastal economies and provide hundreds of jobs, if not thousands.”

To help with that, those with N.C. Marine Fisheries are working with the legislature to further streamline the process in “aquaculture enterprise areas,” large areas of water subdivided for incoming leases. Talks are still ongoing.

In a smaller-scale investment, a farmer could spend between $30,000 and $70,000 in initial costs, Holbrook said. That includes about $5,000 for seed with the rest for equipment, tools, maintenance, boat and fuel.

Rigged in caged structures anchored in the sands of the estuary, Holbrook’s oysters are grown from a seed the size of a pencil eraser to market size in about 18 months.
But there’s few seeds available that are cultured in state.

In about three years, Holbrook said, a farmer can “get out of the red.” And a successful farmer that does research and dodges the major threats of hurricanes and theft could reach profits in hundreds of thousands.

Ongoing research could propel North Carolina oyster farmers into a more sustainable market.

N.C. Sea Grant recently submitted a proposal to NOAA to expand oyster farming in the state by improving production methods and developing business planning models.

The project would also involve regional institutions including Cape Fear Community College and University of North Carolina Wilmington to establish an oyster farming training program. In addition, efforts to increase public awareness of oyster farming and its benefits would occur at regional state aquariums including the N.C. Aquarium at Fort Fisher.

Researchers at the UNCW Center for Marine Science (CMS) and Shellfish Research Hatchery are working on several studies that could improve the state’s industry.

CMS researcher Elizabeth Darrow is working with Holbrook and others in the Masonboro Island Reserve to closely study effects of shellfish aquaculture on the natural habitat and quantify its value. The university has acquired a more than $600,000 grant from NOAA for the three-year study.

“It has not been done before, and it has not been done inside a reserve,” Darrow said about the study.

At the 11,000-square-foot Shellfish Research Hatchery building and 1.8-arce farm behind the center, director Ami Wilbur and her staff are breeding North Carolina’s oysters to produce high-quality, disease-resistant oysters that could be used as a potential brood stock for the state’s market.

The group is also studying ways to diversify a shellfish crop on a single farm, as well as potential benefits and growth rates of triploids, a type of oyster that does not generally reproduce. Some farmers in the state have had a high demand for triploids because of their fast growth rates and ability to be harvested and marketed even through the summer months, Wilbur said.

“The strategy here is that the selective breeding is beyond the capabilities of the industry at this time, and the lines we develop can be passed on to the industry,” Wilbur said. “The role for the science in this is to help the industry grow in a way that is sustainable.”
 

Neighboring Competition

$1.1 million: North Carolina oyster aquaculture farm gate value in 2016

$15 million: Virginia oyster aquaculture farm gate value in 2016

About 100: North Carolina oyster farming jobs

More than 500: Virginia oyster farming jobs

Source: N.C. Sea Grant
 
And then there’s the taste. Holbrook said the demand in just the past few years has grown exponentially for that connoisseur-level oyster, cultivated as singles and sold by the half shell.

“A cultured wild-raised, farmraised oyster is a much superior product then what people traditionally thought of oysters,” he said. “That’s what makes it economically viable. I’ve got customers here in town that I can harvest in the morning, and I can deliver to them by dinner. And there is a huge national desire for farm to fork.”

Surf House owner Craig Love, supporter of the farm-to-fork movement, has noticed solid demand from his restaurant’s guests for higher-quality oysters. With the wild harvest oysters out of Louisiana or half-shells from up north, he seeks the North Carolina oyster when he can get it.

“It’s something we certainly take the opportunity to do,” he said. “The flavor profile is totally different. You get more flavor from an oyster, in the aquaculture sense.”

In Wilmington there’s potential to have five “very successful farms,” Holbrook said, adding that the local industry is looking into developing a co-op.

“Oyster farming has a promising future in North Carolina,” Weirich said, “and N.C. Sea Grant is working to help support sustainable development of the industry toward its true potential.”
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