Fish farm: denser stocking, less fish

“Sixty hectares, one hundred and eighty-seven tonnes handed over in a season, the buyer took every last fish. And what was left of the profit was nine hundred and sixty-one thousand. And my densest pond was selling fish below what it cost me to grow it” — that is how Ostap Levchenko, owner of a pond farm in the Cherkasy region, opened the conversation.

If you run a pond farm, you have done the same arithmetic. So much area, so many fingerlings stocked, so many tonnes harvested. Multiply by the price, subtract feed, stocking material and wages — there is the profit.

The count breaks in one place. A farm is measured in tonnes, but the money lives on the hectare. Three ponds with one fish price and one feed give three different costs per kilo, and one of them is above the price. In the farm-level summary the loss-making hectare dissolves into the profitable ones.

Below we break the farm down into the unit it really works in — the hectare of growing area — and get to why the most densely stocked pond gave less fish per hectare.

Ostap's road: from one pond to 60 hectares of growing area

Ostap started with a single pond leased together with his father. They stocked one-year-old fingerlings, fed wheat and oilcake, and did the sums on a page of a school notebook.

Over twelve seasons that became a farm with 60 hectares of growing area: three ponds, a fish keeper, a tractor with a feed spreader, aerators. That is when the feel for the figures disappeared: the tonnes grew, and the profit hung where it had been in the fifth season.

“When there was one pond, I knew everything about it: where the feeder was, how much they ate by mid-morning, what the fish looked like at the test netting. Now there are three ponds, and I cannot tell you which one feeds me and which one I feed.”

Why 187 300 kilograms say nothing about the profit

The arithmetic Ostap used to describe the season is correct in every step. 187 300 kg of market-size fish at live weight at 78 ₴ a kilo — revenue of 14 609 400 ₴. Profit of 961 375 ₴, that is 6.6% of revenue.

Only those 6.6% describe none of the three ponds. It is an average between a hectare that brings in 99 798 ₴ and a hectare that takes away 12 384 ₴. The loss-making pond cannot be seen in such an average.

Let us agree right away: 187 300 kg is what the farm handed over to the buyer. How much it earned is a question for the hectares.

Life before the hectare got a row of its own

The bookkeeping Ostap lived in through those seasons is familiar to any farm that grew out of a single pond.

• Feed was written off against the whole farm. They bought it by the truckload, handed it out across the ponds, and nobody added up how much went where.
• The feed conversion ratio was treated as the fish keeper's business. The figure lived in his notebook and never reached the financial report.
• Mortality was taken like the weather. Fewer fish came out than went in, and how many hryvnias that equals cannot be seen.
• Stocking density was set as “the same as last season, only more”. The logic is simple: more fingerlings, more market-size fish.
• Aeration and treatment were counted farm-wide. Electricity for the aerators on one bill, medicines on one payment.
• Success was measured in tonnes. Neighbours ask how much you handed over, and nobody asks how much you kept.

There is nothing to fault in the fish farming here: the ponds are well kept, the aerators run, there was no fish kill. All six are bookkeeping mistakes, and such mistakes show up neither on the water nor in the bank statement.

The main unit: the hectare, not the farm

The farm is the unit you hand the fish over in. The hectare of growing area is the unit you grow it in. Until the two sit in one row, the cost per kilo is invented by dividing all the costs by all the tonnes.

The hectare is convenient because everything on it is comparable. Area, stocking density, feed and mortality are each pond's own, while the fish price and the feed price are the same.

Three ponds over one season

Ostap closed the season pond by pond. Four cost lines attach to a specific body of water: feed, stocking material, aeration and treatment.

Pond	Ha	Head/ha	Kg/ha	Cost ₴/kg	Margin ₴/ha	Total ₴
Pond A	20	2 000	2 816	42.56	+99 798	1 995 960
Pond B	25	3 000	3 444	59.87	+62 447	1 561 175
Pond C	15	4 000	2 992	82.14	−12 384	−185 760
Total	60	—	187 300 kg in all	—	—	3 371 375

One body of water, one feed, one buyer — and three rows with nothing in common between them: 20 × 99 798 = 1 995 960 against 15 × (−12 384) = −185 760.

The yield curve: 2 816, then 3 444, then 2 992

Look at the “Kg/ha” column. From pond A to pond B the density lifts the yield: 2 816 → 3 444 kg per hectare. The logic “more fingerlings, more fish” works.

From pond B to pond C it stops working. The stocking is 33% denser, and the yield falls: 3 444 → 2 992 kg per hectare. This is not a scale error at the draining of the pond but the top of the curve, beyond which the water no longer copes. And those 33% are easy to confuse with the 32% mortality in that same pond: one number is about the quantity of fingerlings, the other about the dying.

The outer ponds almost met on yield: 2 816 kg per hectare on the thinnest stocking against 2 992 kg on the densest — even though twice as many fingerlings go into C.

And the margin per hectare has no top at all: 99 798 → 62 447 → −12 384 ₴. It falls from the thinnest stocking onward and keeps falling — even where the yield is still rising.

Sixty hectares and seventy-eight hryvnias — figures from different chapters

Two figures are close in size and stand next to each other, so let us label both. 60 is the hectares of growing area of the whole farm: 20, 25 and 15. 78 ₴ is the price of a kilo of fish at live weight.

Neither follows from the other. They stand side by side only because from here on 78 ₴ will have to be compared with the cost per kilo again and again — and that seventy-eight must not be mixed up with the hectares.

Feed conversion ratio: 2.5, 3.5 and 4.5 kilograms of feed per kilogram of gain

The feed conversion ratio is how many kilograms of feed it takes for the fish to put on one kilogram. Not a price and not the weight of a fish, but a consumption norm. In three ponds of one water it differs: 2.5, 3.5 and 4.5.

Feed goes into the weight gain — into the difference between the market-size mass and the mass that entered the pond as stocking material: a one-year-old fingerling weighs 50 g, and that weight does not need feeding. So the ratio is multiplied by the gain, not by the whole harvest: per hectare of pond A that is 6 790 kg of feed, of pond B 11 529 kg, of pond C 12 564 kg. At a price of 15.00 ₴ a kilogram — 101 850 ₴, 172 935 ₴ and 188 460 ₴ per hectare.

Feed is 77–85% of the cost per kilo

The cost of a hectare is made up here of four lines: feed, stocking material, aeration, treatment. Feed takes 85% of it in pond A, 84% in pond B and 77% in pond C.

So the feed conversion ratio is not a trifle from the fish keeper's notebook but a multiplier that drives almost the whole cost per kilo. When it drifts from 2.5 to 4.5, the rest need not be counted.

The share of feed falls at the same time, and there is no contradiction. On dense stocking aeration and treatment grow faster than feed: 77% of the cost of a hectare in pond C is more money than 85% in pond A.

Mortality of 12%, 18% and 32%: the feed eaten by fish that did not make it

The second thing density does is kill fish. In pond A 12% of the stocked fish do not live to the draining, in pond B 18%, in pond C 32%. The reasons are the usual ones: the oxygen regime, disease, the stress of crowding.

That mortality reduces the yield is obvious. Its second effect is not obvious: the fish that did not make it ate feed until its last day. That feed already lies in the cost of the fish that did.

This is why the feed conversion ratio and mortality are not counted separately. The 32% of deaths in pond C are part of those same 4.5 kg of feed per kilogram of gain.

“Thirty-two per cent I used to write off to oxygen and heat. And then I was asked a question: did you feed that fish until July? I did. So all the feed up to July I gave to fish that is neither in the buyer's truck nor in the money.”

Two series of percentages that move in opposite directions

There are two rows of percentages in this article, and they stick together into one very easily. 12%, 18% and 32% are mortality: from A to C it rises. 85%, 84% and 77% are the share of feed in the cost of a hectare: it falls.

Both rows are correct. The denser the stocking, the more fish die — and the more money goes on aeration and treatment, which push feed down by share.

What exactly goes wrong with density

Let us put the three ponds in one table and see what moves together with stocking density.

Indicator per season	Pond A	Pond B	Pond C
Head/ha	2 000	3 000	4 000
Feed conversion ratio	2.5	3.5	4.5
Mortality	12%	18%	32%
Market weight	1.60 kg	1.40 kg	1.10 kg
Aeration ₴/ha	6 400	14 200	26 800
Treatment ₴/ha	2 100	4 800	11 500

Not a single row behaves well. More feed is needed per kilogram of gain, the fish come out smaller, more of them die, aeration goes from 6 400 ₴ per hectare to 26 800 ₴, treatment to 11 500 ₴.

And the main thing: these things multiply by each other rather than add up. A higher feed conversion ratio, a lower market weight and a higher mortality meet in one and the same kilogram. That is why the cost per kilo in pond C is almost twice as high.

The market weight of 1.60, 1.40 and 1.10 is the weight of a single fish

This row is misread more often than the rest: 1.60 kg, 1.40 kg and 1.10 kg are not tonnes out of the pond but the average weight of one fish at the draining.

On dense stocking the carp does not grow out: less water and oxygen per fish, more competition for feed. Of small fish you need more head for the same kilogram, and every head is a separate one-year-old fingerling at 95 ₴ a kilo. And the buyer pays the same 78 ₴ whatever the size.

Cost per kilo: 42.56, 59.87 and 82.14 ₴ against a price of 78 ₴

Now let us add up all four lines for each pond and divide by its kilograms. The cost per kilo: 42.56 ₴ in pond A, 59.87 ₴ in pond B and 82.14 ₴ in pond C.

The price is the same in all three — 78 ₴ a kilo at live weight. Pond A sells a kilo at almost twice its cost, pond B with a smaller cushion, and pond C sells for 78 ₴ what it grows for 82.14 ₴.

None of these figures can be seen in the farm-level summary: there the cost is a single one, all the season's costs divided by 187 300 kg. An average between 42.56 ₴ and 82.14 ₴ will not show the boundary.

Pond C runs at a loss: −12 384 ₴ per hectare

The margin per hectare is the difference between the price and the cost per kilo multiplied by the kilograms per hectare: +99 798 ₴, +62 447 ₴ and −12 384 ₴.

The minus in the third row is not a slip of the pen. These are 15 hectares of water that worked the whole season, ate 188 460 ₴ of feed per hectare, ran the aerator for 26 800 ₴ and gave the farm −185 760 ₴.

“That pond was the one I was proudest of. We stocked four thousand to the hectare, we put in new aerators, the fish came up even. And they tell me: it is minus one hundred and eighty-five thousand to you. And the fullest one and the minus are one sentence.”

The farm's season: 14 609 400 ₴ of revenue and 961 375 ₴ of profit

Let us add the season up in full. Revenue — 14 609 400 ₴. The contribution after feed, stocking material, aeration and treatment — 3 371 375 ₴: 1 995 960 ₴ from pond A, 1 561 175 ₴ from pond B, −185 760 ₴ from pond C.

Out of that is then paid everything that belongs to no pond. The season's fixed costs — 2 410 000 ₴: wages 1 180 000 ₴, security 240 000 ₴, lease of the water body 360 000 ₴, machinery and depreciation 420 000 ₴, admin 210 000 ₴.

Subtract: 3 371 375 − 2 410 000 = 961 375 ₴ for the season, 6.6% of revenue. For pond carp the figure is an ordinary one, and that ordinariness kept Ostap calm for twelve seasons.

Why 185 760 ₴ cannot be subtracted from the profit

The first reaction to a loss-making pond is always the same: subtract its minus from the profit. That must not be done — this money has already been subtracted.

−185 760 ₴ sit inside the 3 371 375 ₴ of contribution: two pluses and one minus are already added up in it. The profit of 961 375 ₴ is the profit with the loss-making pond taken into account. Subtract it once more and you will count the same money twice.

What is the figure for, then? It measures not a new hole but the size of a decision. Inside the total sum there is nothing to discuss about the minus; set out on its own, it becomes the farm's largest reserve.

“At first I subtracted one hundred and eighty-five thousand from nine hundred and sixty-one and calmed down: not a catastrophe. Then they showed me that I had subtracted it a second time. And when I saw that this pond could give a plus of a million and a half — that is when it got unpleasant.”

A scenario: restock pond C at pond A's density

Ostap worked through a scenario in which neither the fish price, nor the feed price, nor the fixed costs change. One thing changes: on the 15 hectares of pond C the density falls from 4 000 to 2 000 head per hectare. The feed conversion ratio, the mortality and the market weight become what they are in pond A.

Indicator	Before	After	Change
Margin of pond C, ₴	−185 760	1 496 970	+1 682 730
Fish from pond C, kg	44 880	42 240	−2 640
Farm profit, ₴	961 375	2 644 105	×2.75

The same pond, the same water, the same fish keeper and the same feed. Fewer fingerlings in the spring — and 15 hectares stop being loss-making.

2 640 kg less fish, 1 682 730 ₴ more money

The second row looks like a mistake, and it is correct. Pond C gives 42 240 kg instead of 44 880 kg: there is less fish — 2 640 kg less, almost two and a half tonnes.

And there is more money by 1 682 730 ₴, because each of those 42 240 kilograms costs the farm 42.56 ₴ instead of 82.14 ₴. The cheaper kilograms are fewer, and they bring in several times more.

The farm's profit goes from 961 375 ₴ to 2 644 105 ₴ — 2.75 times over. Without a new pond, without new machinery and without raising the price.

“They told me: bring fewer fingerlings to this pond in the spring. I answered that it is like cutting down my own harvest. We counted it up — I will sell two and a half tonnes less and keep almost three times more for myself. For twelve seasons I was buying losses at ninety-five hryvnias a kilo.”

What owners do instead of density

When the season does not match the expectation, the hand reaches for the familiar levers. They all work, and they all give less than stocking density.

• They haggle over the fish price. The buyer gives 78 ₴ a kilo, and what you can haggle out of that is a hryvnia, not the difference between 42.56 ₴ and 82.14 ₴.
• They look for cheaper feed. 15.00 ₴ a kilogram is knocked down by percentages, while the feed conversion ratio moves from 2.5 to 4.5 — by multiples.
• They put in one more aerator. On dense stocking it really is needed — and it already stands in the costs of pond C as a line of 26 800 ₴ per hectare.
• They stock even denser. Little fish came out, so let us bring in more fingerlings. That very move is what brought pond C to where it is.

Stocking density is never on this list, because it does not look like a financial decision. It looks like the fish keeper's decision, the one taken in the spring in a single day.

What changed when the hectare got its own row

There turned out to be three technical changes. Feed stopped being written off against the farm and went pond by pond. The feed conversion ratio and mortality became fields of the same report as the revenue. And the cost per kilo came to be counted for every pond.

• Stocking density became a financial decision. How many fingerlings to bring in is decided with the margin per hectare in front of you, not with a plan in tonnes.
• The test netting started counting money. The weight of a fish and the feed eaten stand side by side, so a drift in the ratio is visible in July, not at the draining.
• Aeration and treatment were spread across the ponds. 26 800 ₴ and 11 500 ₴ per hectare in pond C no longer get lost in the general bills.
• Tonnes stopped being the measure of the season. The first question now is the margin per hectare, the second the cost per kilo, and only then the volume.

None of this needed a new pond, new machinery or more expensive feed. What it needed was to see the hectare as a row with a cost of its own and a margin of its own.

A takeaway for entrepreneurs. If your business grows something on a limited resource — a hectare of water, a square metre of greenhouse, a place on the shop floor — then the volume has a maximum and the money does not. Intensity can be raised until the consumption norm per unit of product starts growing faster than the volume; beyond that, every further unit of the resource brings a loss that hides in the business-wide average. Work out the cost per unit for every plot of the resource and put the price next to it. Very often cutting the load on one plot gives more than any expansion.

Parting advice

• Count the margin per hectare, not the tonnes from the farm. For Ostap that is +99 798 ₴, +62 447 ₴ and −12 384 ₴ — three businesses on one body of water.
• Put the cost per kilo next to the price for every pond. 82.14 ₴ against 78 ₴ is the row after which there is no sense in discussing volume.
• Pull the feed conversion ratio out of the fish keeper's notebook into the report. 2.5, 3.5 and 4.5 drive 77–85% of the cost per kilo.
• Spread the feed across the ponds, not across the farm. 6 790 kg and 12 564 kg per hectare are different businesses, as long as feed is written off by one truckload.
• Count mortality in feed, not in head. 32% of deaths is feed already put into the feeder and laid onto the fish that survived.
• Check whether your densest pond is past the top of the curve. Stocking 33% denser gave 2 992 kg per hectare against 3 444 kg.
• Work out the scenario with a lower density before you lease more water. Restocking one pond gave ×2.75 to the profit.

The money does not disappear — you simply do not see it

People think about a pond farm like this: take the water, bring in the fingerlings, feed them and hand over the tonnes. All of that is only the condition of entry. The money is decided by something else — how many fish you stocked per hectare.

A hole like this does not close by itself and will not show up in the bottom line: the line shows 961 375 ₴ of profit, and that is true. But as soon as the hectare gets a cost of its own, the main thing becomes visible — the 6.6% belong neither to pond A nor to pond C. It is an average between a hectare that gives 99 798 ₴ and a hectare that takes away 12 384 ₴.

How to see this at your own farm

Everything above rests on one table: not the season in tonnes, but each pond as a row, with the stocking density, the feed conversion ratio, the mortality and the margin per hectare side by side. As long as the result is measured in tonnes for the whole farm, you see neither that one pond sells fish below its cost, nor that restocking it thinner would give less fish and more money. When the same data is collected automatically, the cost per kilo of each pond becomes visible — which is exactly why owners of small and medium businesses use Finmap: to see the financial picture rather than piece it together from memory.

Read also

• Poultry farm: three identical houses, different results
• Greenhouse growing: cost per kilo, not kilos per square metre

Topic foundation: Management Accounting Explained: What It Is and Why Owners Need It