The present COVID-19 crisis has underscored how reliant we are on long, complex supply chains to supply us with basic necessities.

A sobering reminder of our system’s brittleness is the warning from Smithfield Foods’ CEO that COVID-19 “…is pushing our country perilously close to the edge in terms of our meat supply.” He offered this warning after witnessing closures of or disruptions to large Smithfield, Purdue, Tyson, and JBS plants in South Dakota, Delaware, Iowa, Tennessee, and Colorado all related to the COVID-19 outbreak.

As authors from the Rockefeller Foundation wrote in a recent blog post,

Empty grocery shelves are not just the result of the human tendency to hoard in times of danger, but an important reminder that our food supply chains are easily disrupted and many of our food systems lack resilience and redundancy. Many parts of the world rely on highly centralized systems, at the expense of strong local and regional food systems that could provide better buffering capacity when needed.Roy Steiner, et al, at the Rockefeller Foundation…Insert Text Above

Long before a novel coronavirus started to be reported in Wuhan, China, I have been concerned about centralized food production and the long, vulnerable supply chains it necessitates. As I pointed out in my 2018 article, Agriculture Is Broken, AgTech Can Fix It, farmers spend an unsustainable 10 calories of energy (in the form of petroleum biproducts) for every single food calorie they produce.

Simplifying and regionalizing food supply chains not only protects our food system from pandemic challenges, but also helps to solve climate change and make our civilization more resilient as we scramble to manage climate change-related environmental stress.

This is my interest was piqued when I received a call from Peter Wakefield, the founder and CEO of Wild Coast Salmon and an entrepreneur with a long history in the business of salmonid (salmon and trout)  aquaculture.

Wakefield has spent over twenty years growing salmonids from “egg to plate” in the USA, UK, Europe, and Africa. He returned to his native South Africa in 2016 to set up Wild Coast Salmon, a venture to grow and harvest Atlantic Salmon entirely on land using Recirculating Aquaculture System (RAS) technology.

RAS facilities are designed to nurture fish from egg through adult by providing them a series of environments designed to mirror natural conditions. In the case of salmon, which are anadromous – hatching in fresh water, maturing in briny water, and living as adults in the open seas – the RAS facilities to grow them are quite sophisticated.

These sophisticated RAS facilities provide the ability to control the water in the facility at ideal, optimum temperatures and salinity levels at each stage of the salmon crop’s maturity.

Hatching trays are used to start the salmon eggs off in fresh water. As the eggs hatch and become juveniles (“smolt”), the crop is moved into briny water. When the smolt have matured into adults, they are transferred into large pools of moving seawater.

While you might think that an indoor fish factory sounds much less “natural” than ocean-based salmon farming in open sea cages, it’s important to realize that offshore farms feed an enormous amount of chemical additives, vaccines, and hormones to the fish to keep them healthy enough to make it to the harvest quickly. In that respect, they can best be thought of as offshore CAFO facilities.

In contrast, for a modern RAS facility, the entire growth and maturation process is closely monitored and tightly controlled, so RAS-raised salmon are not exposed to the diseases and parasites that plague oceanic off-shore salmon farms. Water quality is continually monitored to assure biologically pristine conditions, so there is no need to inject salmon with chemicals during the production process. This ensures much higher levels of fish welfare as well as producing superior quality, healthy salmon.

Wakefield believes there is an enormous opportunity for RAS-based salmon farms in South Africa due to the nation’s relative remoteness.

Salmon can only thrive in narrow bands of cold water near each pole (needless to say, these bands stand to grow even narrower as ocean temperatures increase). Because salmon’s geographical range is limited, fully two-thirds of Atlantic Salmon production takes place in two chilly seafaring countries: Norway and Chile.

South Africa, even its southernmost tip, is surrounded by water too warm to raise salmon off-shore, and its coastline is not suitable for such operations even if the water was the right temperature. As such, any South African who wants to eat a Spicy Salmon Roll has to pay for the salmon’s plane ticket from Oslo to Cape Town.

In other words, the salmon trade to South Africa doesn’t make economic sense and is ecologically unsustainable. Domestic production holds real economic and ecological promise, but due to geographical constraints, a local RAS facility represents the only tenable, long-term answer.

A South African RAS facility certainly represent an opportunity with great potential, but RAS companies require a great deal of expert capability to operate.

After all, the output of an RAS “factory” is a living being, not a lump of glass and plastic. Unlike lumps of glass and plastic, living beings are sensitive to a wide range of conditions and factors that takes years of study and of real-world experience to understand. The uncertainties inherent in producing and harvesting living crops means that the training and skill of the people running the business are paramount.

Peter Wakefield, founder and CEO of Wild Coast Salmon.
Peter Wakefield, founder and CEO of Wild Coast Salmon, has a long history in salmonid aquaculture on three continents.PETER WAKEFIELD

In this respect, Wakefield’s long experience in the salmon business serves as a competitive advantage to Wild Coast Salmon. Another company has announced plans for a RAS facility in land-bound Lesotho, but without the experience and talent to manage the complex process, it is hard to imagine it will be able to compete effectively against Wild Coast, assuming it is even able to get up and going.

Almost as important as an expert operator is a patient investor. It takes approximately 1 year to construct a modern RAS facility and then 12-18 months to hatch and grow the salmon to market size. Not all investors have the patience to wait for a payoff that starts two to three years after the initial investment is made. However, for those that are willing to wait, the rewards awaiting in South Africa could be great.

COVID-19 has not only exposed the danger of long food supply chains, but has also exposed the danger of uncontrolled capture and slaughter of wild creatures for human consumption.

After we figure out a way out of the immediate COVID-19 pickle, we will need to start reassessing our approach to the underlying conditions and resolving the systematic weaknesses that gave rise to the pandemic in the first place. A big part of that reassessment must include thinking about how to provide safe, nutritious food to local consumers in an ecologically and economically-sensible way.

After all, no matter what happens in the markets from day to day, the first thing anyone thinks when the sun starts to go down is “What’s for dinner?”

Wakefield knows, as I know, that we as a civilization will have to adopt a new paradigm to adapt to the new world. Intelligent investors take note.