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Indoor Shrimp Farming

Editor's note: This story was originally published in the Mid-November 2018 issue of Successful Farming magazine. In January 2019, trū Shrimp announced it would build its first facility in Madison, South Dakota, rather than LuVerne, Minnesota.

More than 1,700 miles from the ocean, Ralco – the third-generation, family-owned agribusiness headquartered in Marshall, Minnesota – is developing a shrimp-production business.

To raise and market the shrimp, Ralco spun off a company called trū Shrimp. It is testing and improving an indoor shrimp-production technology that was developed at Texas A&M University.

In an interview at a former schoolhouse in Balaton, Minnesota, being renovated as the new home for trū Shrimp, Brian Knochenmus, president of Ralco and chairman of the board of trū Shrimp, says trū Shrimp intends to raise shrimp in enclosed, heated, and insulated buildings and eventually hopes to build a network of 10 harbors for shrimp production. The harbors will each produce millions of pounds of shrimp a year and employ more than 100 people when fully operational. Luverne, Minnesota, has been chosen as the site of the first harbor.

Investors

Ralco holds a majority ownership stake in trū Shrimp. There are 19 minority stakeholders including Schwan’s Co., also in Marshall, Minnesota, and 18 other investing entities.

The goal of trū Shrimp (trushrimpcompany.com) is to revolutionize shrimp production. “Our disruptive technologies and revolutionary processes produce shrimp sustainably and predictably without use of antibiotics and with unequalled transparency and traceability,” states the company’s website.

Ralco was founded 47 years ago. This is its first foray into feeding and producing food, says Jamie Brink-Thordson, trū Shrimp’s brand manager. The company is in the research phase of shrimp production, testing different diets and formulations for its shrimp feed and studying how the feed performs in water to help make sure the water tanks holding the shrimp are kept clean. “Water quality is everything,” she says.

There is a ready market for fresh shrimp in the U.S., Brink-Thordson says, with demand far outpacing the supply of domestically-produced shrimp. “We are in discussion with a number of retailers and food service companies. We’ve had a warm reception from those folks. We haven’t had to search too far for potential partners.”

Seafood Demand Up

According to the National Oceanic and Atmospheric Administration (NOAA), which tracks seafood production, the U.S. imported a record 664,109 metric tons of seafood in 2017, a 10% increase from the previous record of 603,525 metric tons set in 2016. India and Indonesia are the largest shrimp exporters to the U.S., according to NOAA.

By value, almost 90% of the seafood eaten in the U.S. is imported, with half of it coming from aquaculture production. According to NOAA, the U.S. is a minor aquaculture producer, but the leading global importer of fish and fishery products. trū Shrimp aims to fill the gap between domestic shrimp production and U.S. consumption, says Brink-Thordson.

Ralco’s interest in shrimp production dates back to 2008, when Knochenmus and his father, Jon, Ralco’s president emeritus, traveled to Ecuador to visit an outdoor shrimp-production operation. Brian Knochenmus says a Ralco feed additive had been found to be effective in controlling production problems at the facility. The father and son learned that outdoor shrimp ponds are difficult to manage for efficiency, quality, and safety.

“We were standing on a dike between two of the outdoor ponds,” Knochenmus recalls, “and I was thinking, there has to be a better way to raise protein.”

When he returned to Minnesota, Knochenmus started looking into the shrimp-production process and discovered an indoor shrimp-production system that had been developed by Addison Lawrence at Texas A&M University’s Port Arkansas, Texas, facility. “We spent seven hours with Lawrence,” he notes. “He wanted to know all about swine, poultry, dairy, and beef cattle production, and we wanted to know about shrimp.”

At the time, Texas A&M was close to filing for a patent for the Tidal Basin shrimp-production system. The university had licensed the technology to another company, Knochenmus says, but the company hadn’t done much to advance the system, so Ralco was awarded an exclusive license for the domestic U.S. market in 2014. Ralco has met all of the license’s performance clauses, he says, and improved on the system.

“Since we brought the technology to Balaton, we’ve developed new innovations that are really critical to the technology,” he notes. Maintaining water quality to lessen environmental concerns in the tanks is the most critical innovation the company has made, he adds.

No Barrier

Frigid Minnesota winter weather is not a barrier to indoor shrimp production. “It’s a lot easier to heat a building than it is to cool one,” Knochenmus observes.

In fact, being located far from a coast is good. “We think we have a strategic advantage being as far away from the ocean as we possibly can be,” he says. There are no quality concerns from water spreading disease by being recirculated in the shrimp-production ponds as it would be if they were fed by ocean water. “Successful protein producers care for their animals,” he notes. “We can take care of the shrimp better here than if they were raised in the ocean.”

In January, trū Shrimp completed a major renovation of the Innovation Center and Laboratory located in the former Balaton schoolhouse that both Jon and Brian Knochenmus attended as children. The renovation project allowed the company to improve on the Texas A&M bench-scale technology by increasing the width of the tidal basin tanks where the shrimp are raised and by dramatically increasing the length.

Also, the company is collaborating with shrimp processing machine manufacturers to develop equipment that will more efficiently remove the heads and shells from the delicate fresh shrimp.

“The shrimp will be processed immediately after leaving the tidal basins,” says Knochenmus, “so they will need special handling.” Newly designed equipment will be unveiled soon.

Testing the Process

The Balaton Bay Reef Training and Engineering Center was completed in the fall of 2018 as a research facility and as a training center for new employees. In a tour of the facility, Brink-Thordson says the center will provide “an environment where we can test the shrimp-production process. Shrimp are very sensitive, so handling them with care is critical.” Shrimp are already being produced on a small scale at the Balaton Bay Reef facility.

Technology improvements that have been achieved at the Balaton Bay Reef Innovation Center will lead to lower costs of constructing the harbors, says Knochenmus.

In November 2017, trū Shrimp announced that it intends to build its first shrimp-production facility and hatchery on 60 acres in Luverne, Minnesota. The hatchery and harbor can share the same site because of engineering and processing advancements that have alleviated biosecurity concerns, explains Michael Ziebell, president and CEO of trū Shrimp.

Luverne was picked as the site of the first harbor and hatchery because it has a predictable water supply, good labor force, is on Interstate 90, and has a great economic development department, says Knochenmus. 

In addition to the production facility and hatchery, the Luverne harbor will house a nursery, water-treatment facilities, and offices. When running at capacity, the Luverne harbor will produce millions of pounds of shrimp a year, Knochenmus says.

Brand manager Brink-Thordson says the company intends to be marketing its Minnesota-raised shrimp sometime before 2020. “We are really going to work on our brand now,” she says.

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