U.S. hybrid Striped Bass and Red Drum farms: Economic effects of the U.S. regulatory framework

Abstract Objective Hybrid Striped Bass (HSB) and Red Drum Sciaenops ocellatus (known commercially as redfish) are important commercial sectors of foodfish production in the USA. The objective of this study was to measure the regulatory compliance burden on U.S. HSB and Red Drum farms. Methods National surveys were conducted in 2021 of U.S. hybrid Striped Bass and Red Drum farmers with response rates of 35% and 89% and coverage rates of 37% and 99.8%, respectively. Result Results showed that the regulatory costs were one of the greatest costs of production, at 22% of total costs on HSB farms and 15% on Red Drum farms. Nationally, the total annual regulatory compliance cost burden was US$4.5 million for HSB and $2.2 million annually for Red Drum farms. Per‐farm, the regulatory cost burden was $152,698 ($1.20/kg) on HSB farms and $274,746/farm ($1.44/kg) on Red Drum farms. In addition, lost sales revenue on HSB farms was found to equal 92% of total sales revenue, at $31.3 million, and 54% of total sales revenue on Red Drum farms, at $13.6 million. The regulatory categories of greatest cost were those related to water rights and access, predatory bird management, and effluent discharge regulations. Conclusion Regulatory constraints have likely contributed to the contraction of the HSB sector from 2012 to 2018 and likely dampened the sales growth observed in Red Drum farming over the same time period. Smarter and more cost‐effective approaches to regulatory oversight of U.S. aquaculture are needed that allow for growth to meet increased demand for locally produced food and to remove the economic incentives to import seafood produced under less environmentally sustainable conditions than those in the USA.