In the five years since Maryland’s law changed to allow oyster aquaculture throughout the state, dozens of entrepreneurs have taken the plunge. They have built an industry that’s raising millions of oysters, creating jobs in waterside communities and helping to filter the Chesapeake Bay’s water.
But oyster farmers say the industry can’t grow without a private hatchery. Already, in the last two years, Maryland oyster farmers have had to cut promised production because they couldn’t procure the seed and larvae they needed to grow oysters. Chesapeake oyster farmers raise either single-seed oysters or in clumps as spat on shell. Either way, they need a hatchery to create the larvae.
Without a hatchery, said Hooper’s Island farmer Johnny Shockley, running an oyster aquaculture operation is “like trying to run a coal mine with no coal.”
A hatchery, he added, “is an absolute necessity. We needed it two years ago.”
Maryland’s oyster farmers would like to emulate Virginia, which has six private hatcheries to supply its growing network of oyster farms. In 2014, those farmers planted 107 million oysters, up from 5 million in 2005. Virginia’s aquaculture was valued at $55.9 million in 2014. While that number also includes clams, it is the oyster part that is growing more rapidly, state officials said.
Without a hatchery, Maryland growers have procured their seed largely from two places: The public University of Maryland Horn Point Hatchery in Cambridge, MD, and the private Oyster Seed Holdings on Gwynn’s Island, VA. Both hatcheries have occasionally had production problems and been unable to meet demand.
That’s what happened to Jon Farrington, a Calvert County oyster farmer who won a contract from Maryland in 2015 to plant oysters in Calvert, Somerset, Wicomico and Talbot counties. The county oyster committees selected the planting locations, and the plantings were paid for with state funds and a portion of the tax watermen pay for their license.
The plantings are one of the ways Maryland has supported its public fishery. Since 1997, the state department of transportation has put about $30.5 million into oyster restoration, with some of that money going to planting oysters for watermen to harvest. This year was the first that the Maryland Department of Natural Resources contracted out the job, which it did to help give oyster farmers like Farrington a boost; in the past, the Oyster Recovery Partnership handled the work.
The partnership got its larvae from Horn Point; Farrington assumed he would do the same. But, Farrington said, he needed 80 million larvae, and Horn Point could only supply half of that. Horn Point has obligations to supply much of its larvae for large restoration projects, such as the Harris Creek project, which will eventually cover 350 acres and include nearly 2 billion baby oysters, known as spat. Horn Point also had water-quality problems in 2014, and production was down about 30 percent.
Farrington called other suppliers, but no one could supply the seed oysters he needed. He could only complete part of the job, and had to forfeit the rest of the income.
“Ultimately, for the industry to advance, we need to be able to control our own destiny,” Farrington said. “We need to have larvae and seed, and we need to find a way to make that transition so it’s not the government that fills that role, so the industry can do it for themselves….In a lot of ways, we’re repeating what happened in the past, where we’re depending on the state, and we need to get out of that.”
Oyster Seed Holdings has filled the breach for Farrington on occasion, and the hatchery is the go-to supplier for many oyster farms in Maryland. But it, too, has experienced production problems. In 2014, the Virginia Department of Transportation stripped and repainted a bridge during the oyster spawning season, and the amount of zinc and lead in the water led to high mortalities at the hatchery, which was nearby. This year also brought with it water-quality problems, said Oyster Seed Holdings owner, Mike Congrove. In the six seasons since the company has operated as Virginia’s only independent hatchery, Congrove said they have made their production goals only three times.
“If you were to take a snapshot in time — look at last year — I’d say we don’t have enough hatchery capacity,” Congove said, referring to the bridge-painting trouble. “But if you looked at the anticipated production numbers, the potential, I think it would be enough.”
But the problem is that there are always problems. So much can go wrong while trying to grow fragile, immobile oysters. Hatcheries have to control temperature, Ph, contaminants and salinity. If they’re lucky, 20–40 percent of the oysters will survive as spawn, and then another 20–40 percent of those will survive to set on the shell. Factor in that each of those spat on shell sells for less than a penny, and that hatcheries cost thousands of dollars a month to run, and it’s easy to see why no one has opened one in Maryland yet.
In contrast, the grow-out stage of oyster farming has less risk and more profit. Oyster farmers pay less than a penny for their spat and a bit more for single-seed oysters that sit on a tiny piece of shell. They can sell fully grown single oysters in about a year for a price approaching 60 cents. They, too, have to factor in mortality, but farm-raised oysters have a survival rate approaching 75 percent. Where a hatchery like Congrove’s can cost $500,000 to set up, a small grow-out operation can begin for about tenth of that — even less if the grower elects to put spat on the bottom and not use the cages for single oysters.
Maryland once had 12 private hatcheries supplying the oyster businesses in the state, according to Don Webster, an aquaculture specialist with Maryland Sea Grant. But one by one, they went out of business. Demand fell, particularly after the two diseases, MSX and Dermo, gutted the Chesapeake Bay’s oyster industry in the 1980s. In some cases, Webster said, the operators were “people who didn’t know much about raising oysters.” In others, the operators found it cheaper to just buy from other places.
Before Congrove’s company opened in 2009, many of Maryland’s oyster farmers bought their seed in New England. They could also occasionally buy from the five hatcheries in Virginia that are attached to private oyster companies, though those hatcheries had limited supply. Congrove doesn’t like turning down customers, but he had to do it this year.
Some Maryland entrepreneurs, including Shockley, are looking into building their own hatcheries. They have discussed a co-op approach, with several farmers owning part of the business. Sen. Ben Cardin’s office has been talking to oyster farmers, too, said spokesman Tim Zink. The senator is exploring ways that the federal government can help oyster farmers, whether through low-interest loans for a private hatchery, more funds to invest in the public one, or an easier time obtaining loans from the Small Business Administration for their day-to-day operating needs.
Webster said that it would be easy to expand Horn Point’s capacity. But many oyster farmers say that puts the state in the untenable position of choosing one business to supply over another, and it also doesn’t address the water-quality concerns of having all of one’s eggs in one basket.
Another idea is to turn the hatchery at Morgan State University’s Estuarine Research Center in Calvert County into a business incubator, where different oyster farmers can use equipment to try new approaches to growing larvae, culturing algae and setting oysters in tanks. The farmers could then go from there toward establishing hatcheries with less risk than if they tried from scratch. Already, the center’s director, Kelton Clark, has been working with watermen on experimenting with aquaculture. Shockley, too, is working to incubate businesses at Phillips Wharf with the help of its director, Kelley Cox.
“I don’t think Maryland can go forward without a private hatchery. If it did, we might be the only state in the union that produces oysters that doesn’t have one,” Clark said. “I suppose we could keep giving Maryland money to other states. But until we get to that point, where we have a private hatchery, all of our aquaculture programs will be limited.”