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Chip Terry


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3 min read

Working with Distributors

By Chip Terry on Sep 25, 2020 3:06:40 PM

tagsAlmost every farm starts out selling to local restaurants, but as they scale distributors (aka wholesalers) play an increasingly important role. You will make more money per shell at a restaurant, but there is a limit to how much restaurants can buy. If you are producing more than a few local restaurants and some consumers can absorb, you are probably going to need to work with distributors.  We've been talking to a lot of distributors lately and here are some of the things farmers should know.

To start with, understand the different types of distributors 

Global full line distributors: The Syscos, US Food and others who sell everything to everyone. Unless you are huge they are unlikely to be your customer directly. 

National/regional seafood wholesalers Companies like Stavis, Inland Seafood and Samuel & Sons sell everything from swordfish and lobster to tuna and oysters. They do a lot of volume in shellfish, but it is a small part of their business. Many of them are quite interested in carrying a range of product, but they may not be near your farm.

Shellfish Specific players: There are folks in most major markets that focus on being great at shellfish.  Companies like Pangea, War Horse, and Hog Island know a ton about shellfish and are always looking for great product.  They love having boutique farms with a good story and often run the oyster program for restaurants in major metropolitan areas.

Local buyers: In almost every region there are folks who buy from local farmers/harvesters and then sell either to restaurants or other distributors.  Many of these folks are also farmers themselves and do this as a sideline. They can be the easiest to work with.  

So what should a farmer do?  

1) Find your potential buyers.  Unless you have a truck and a cooling system, you need to find someone who will either pick up at your farm or you can drop off at easily.  Take a look at the Interstate Shellfish Shipper's List. Any company that ships across state lines must be on this list.  If you are going further afield, you may need to work with a local reshipper who can get your product to the distributor.

2) Build a Few Relationships: Find a few distributors who serve different markets that you can work with for the long haul. Find the hole in their product line you can help fill (are you unique based on your location, cost, story?). Don't stretch yourself too thin. You need to invest in the relationships.  Don't get overly caught up in a few pennies more or less for the product.  Better to move a consistent amount every week.

2) Don't sell to their customers: When you have a distributor, be careful to not sell to their customers.  No one wants to be undercut by the farm at a key account.

3) Build a brand: Have a story that is unique and well told. Promise the consumer something unique: The taste of Maine.  A sweet Chesapeake oyster with an especially deep cup.  A pacific gem that has been tide tumbled. Easy to shuck oysters.

4) Be Reliable: Distributors and restaurants want consistent sellers. If your product is only intermittently available they can't build that following.

5)Have a clean consistent product: A product that shows up with clean shells and no dead animals. If something goes wrong fix it quickly.

6) Help them Help You: Many of the better distributors will want to bring chefs on tours, train staff and generally help position your product. Be available and helpful.  

Bottom Line:  Distributors play an important role and most farms work with them.  Treat them well and they will be your best allies.  

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2 min read

Shellfish Tagging: It Works

By Chip Terry on Sep 9, 2020 2:19:44 PM

We started thinking about shellfish tagging about a year ago. We were watching 

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folks waste valuable time filling out harvester/dealer tags, log books, and generally dealing with tons of paperwork.  After talking to a lot of farmers, dealers, regulators and reading the 487 pages of the Model Ordinance, we finally launched our tagging solution in March of 2020--right as every farm shut down for Covid.  Despite the headwinds of a global pandemic, we had 41 new clients in less than 6 months.

So what have we learned? 

1) Paperwork Sucks: Regulations exist for good reasons, but complying withImage from iOS (39) regulations is painful. No one became a farmer because they wanted to do paperwork. 

2) Most states are a little different:  despite the Model Ordinance most states have slightly different regulations (or interpretations of regulations). For example, Washington state wants you to collect water or animal temperature at harvest.  Florida wants to know what type of cooling you have.  Others want bulk tags handled differently. 

3) Paper is painful:  We (I) thought finding waterproof paper would be the easy part.  Turns out getting it on the right size rolls with the right perforation and in the right orientation is a lot harder than expected.  We sent 100s of useless rolls back to the factory. 

DSC00094The future is becoming more obvious.  Now distributors can scan in the tag information--saving them time and money.  The QR codes lets us pass extended information that folks always want but doesn't fit on the tag (say tasting notes or a farmer 

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profile).  We can also make farmer's lives easier by making it easier to do state filings and in the future printing invoices and other associated paperwork.  

 

 

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1 min read

NOAA Grant: Tide to Table Traceability and Marketing System

By Chip Terry on Jul 9, 2020 10:38:17 AM

We won (a grant)!  In a stroke of great luck and a testament to the awesome team at Oyster Tracker, we have been awarded a grant from National Oceanographic and Atmospheric Administration (NOAA).

This federal grant is to prove the technical and commercial feasibility of an easy to use, and inexpensive system to track shellfish from farm to table to improve food safety and meet the growing demand from consumers to know more about the sources of their food.

As one of the reviewers noted: 

The commercial benefit of the proposed technology is abundantly clear. The current system is antiquated and accompanied by high costs associated with utilizing it. With the growth of the shellfish industry and the increasingly educated consumer base the technology offered by this project should be in high demand.

Over the next 6 months, Shellfish Solutions will work with companies in Maine, Massachusetts, Rhode Island and Virginia to beta test a new solution that utilizes mobile phones, thermal printers, and cloud computing.  The ultimate goal is to build a system that

  1. Saves farms and distributors money/time
  2. Makes it easier for all market participants to comply with federal and state regulations
  3. Builds a traceability chain from the tideline to the table for all shellfish.  

This work build on the success of Oyster Tracker’s current products: Farm Manager and Tagging Systems.  DSC09956 If you are interested in learning more, please reach out.  

 

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1 min read

Don't Share your Data with a Competitor

By Chip Terry on May 14, 2020 1:05:33 PM

When you work with us, your data is your data and we don't share it with anyone.  You can read our privacy policy and terms of service on the bottom of this website.  

Many farm manager systems run their own farms and invest in other farms in the US, Canada and Australia.  That means if you work with them you are sharing your data with a competitor.  

We do not invest in farms and we do not own a farm.  In other words, we are not in a conflicted situation.  Our goal is to make you successful.  That is why we are growing so fast.

Bottom line:  Make sure you ask if the company or the principals are owners/investors in other farms and have a conflict.  Most do.  

 

 

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1 min read

Welcome Kam

By Chip Terry on Apr 7, 2020 1:18:43 PM

After getting inquiries from over 30 people and interviewing 8 amazing folks, we hired our first sales leader--right as Covid shutdown the entire economy. 

Tough time to start, but Kam Kim is already a great addition to the team. He is smart, energetic, and will make sure we are well connected to the shellfish farms in the mid-Atlantic.  When this market rebound (and it will), he will be ready.  

Beyond getting a free trial, here is why you should meet Kam.

1) He managed one of Cherrystone's Farms on the eastern shore of Virginia--one of the largest farms on the east coast. From that experience, he has a deep appreciation of how successful farms run.  IMG_5123

2) He managed the farm at the Virginia Institute of Marine Sciences (VIMs) for the last 3 years. There he was a client of Oyster Tracker for over a year. VIMs taught him how broodstock, nursery, and hatchery programs work and the deep importance of the science behind all we do.  Oyster Tracker - IG.1

3) He was/will be again a bartender who loves to meet people and solve problems.

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4) Most importantly, he is a natural born model and a great fisherman. 

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You can reach Kam at Kam@oystertracker.com.

Please join us in congratulating him. 

Chip

 

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1 min read

Covid Crisis: Preparing for a better future

By Chip Terry on Mar 24, 2020 1:50:19 PM

Wow it is a crazy time.  I hope you and your families are well.  That is most important.

As I'm sure you know, Covid has been disastrous for shellfish farms. Restaurant sales have gone to zero and therefor almost all farm have no sales. Most farms are cutting expenses.

In response, we have given all our clients the next two months free. We always want to be a good partner with our clients and this is one small way we can do that.

We are also the eternal optimists and know that unlike some other industries/companies we are in a fortunate place.  Here are my data points.

1) You can meet demand when the market rebounds.  Oysters/clams/mussels can stay on the farm pretty much indefinitely. Once restaurants reopen farms will be able to meet demand. The optimistic scenario: 2 months of social distancing followed by a great summer.

2) We are building great solutions to real challenges:  We are well funded with a great team and clients in 10 states and 4 countries. Clients have been giving us strong directions. We are continually updating our farm management solution and our new tagging solution is coming soon. 

3) You can now try Oyster Tracker for free:  As you move into the busy season of planting new seed, splitting bags and generally getting the farm in shape we can help.  All farms will now automatically get a free two month trial. If it works for you and business bounces back great. If not, you can always export all your data to a spreadsheet. 

Bottom line:  Together we will come out of this stronger.  Please let us know what we can do to help you.  

The Oyster Tracker Team (Chip, Andy, Cat, Kam, Drew, and Rob)

 

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2 min read

Shellfish Regulations

By Chip Terry on Feb 10, 2020 11:00:20 AM

An estimated 35,000 Americans got sick from Vibrio parahaemolyticus transmitted by shellfish--an increase 54% from 2006 to 2017.

At first glance really bad news, but:

1) The CDC estimates the percentage of unreported illnesses and scales up based on the reported cases. Better reporting leads to worse results. If historically consumers reported only 10% of cases, but today they report 30% the estimated number of illnesses would be a 300% increase--without any actual increase in disease.

2) Even ignoring the reporting issue, the industry grew way more than 54% over the last 10 years. On a percentage basis, the incidence of disease must be lower.

In other words, the percentage of shellfish consumers getting sick has declined. But even one sickness or death is too many. We should always be looking for improvements. Headlines like the above lead to more stringent regulations and a greater burden on the industry that may only add cost and not improve outcomes.

Having spent some time exploring the 489 page Model Ordinance and seeing what happens on farms, dealers and restaurants, I wanted to share with you our experience. As with many others, I think our current system is fine, but beginning to creak under a growing demand. Most notably the reliance solely on a paper based often handwritten system for tracebacks.

The shellfish traceability system relies a paper trail that let's regulators traceback through the supply chain in the event of an illness. Here is the general overview of how this works (note there are a lot of subtleties that I'm ignoring here).

1) Harvest Your Shellfish

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You made sure the state hasn't closed the water for any sort of harmful algal bloom (which seem to be increasing everywhere). You comply with any Vibrio regulations--which mostly relate to getting the product on ice/refrigerated within a specified time.

 
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2) Fill out your harvest tags

Depending on the state, you have to do one tag for every bag and at least part of the tag is usually done by hand. If your area has a vibrio compliance plan, you must include extra data.

3) Complete your other paperwork

Harvest log, vibrio logs, shipping labels, invoices and the like. Make sure you also file your harvest reports with the state every month (or annually in some state)

4) Dealers take over

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  temperatures, wet storage and and the like. All while trying to read your handwriting.

 

Dealers replace your tags with their own, create a receiving log, keep track of

Depending on the supply chain route, this can happen numerous times between the farm and the plate.

5) Eventually the Restaurant

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They are required to store tags for 90 days in chronological order. This is a typical storage system. When someone gets sick, regulators start here.

The result:

The average traceback takes over 4 weeks and over 50% of tracebacks fail because at some point in the chain the records are incomplete or unreadable.

In other words, despite spending thousand of hours and millions of dollars on compliance, the system seldom has the intended result of preventing others from getting sick.

We are in the midst of developing a solution to help farmers. What would you like to see?

 

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1 min read

USDA Aquaculture Data: Tread Carefully

By Chip Terry on Jan 8, 2020 12:48:58 PM

The USDA just released a census of Aquaculture in the US.  As far as I can see, the data has some serious limitations--and it is not the fault of the USDA.  It was a voluntary survey and the results show that the majority of farms didn't return the surveys.  Here are a couple of highlights:

1) Alabama: USDA says there are 3 mollusk farms in Alabama.  Bill Walton of Auburn University count 22 farms.  I can list off 19 farms.  In other words, ~15% of the active farms Alabama are included.  

2) Maryland: USDA has 30 mollusk farms.  Matt Parker of Maryland Sea Grant counts over 100 leaseholders in Maryland. Roughly 30% of farms included.  In addition, there is one mystery farm in Maryland that sold over 23 million shellfish--more than the entire state reported in the previous year. 

3) Maine:   USDA has 42 mollusk farms. Maine Aquaculture Association counts over 190 farms. 22% of farms included.  

This by no means scientific, but my sample of three shows huge variations from reality (insert joke about Washington reality here).  

Although funny, it does matter.  Government support on issues like better crop insurance and disaster relief, support for research programs on better seed, policies on fair use of public waterways, and Jones Act exemptions all often hinge on the value of the industry.  If the government is significantly under counting the shellfish industry it really matter.  

Next time you get that survey?  Probably worth filling out. 

 

  

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2 min read

Oysters: Headed to Tulip Territory?

By Chip Terry on Dec 13, 2019 3:10:59 PM

In 17th century Holland Tulips were the first modern market panic.  Overnight tulip values dropped to almost nothing and scores of people went bankrupt.  The question I get regularly is: Are we in a oyster bubble?  Tulips and Oysters together

I have no way of predicting the future, but here are some of the relevant data points.  

1) Production is way up:  This is the most obvious sign that we are in a bubble.

  1. Production in Massachusetts is up 48% in the last 4 years.  
  2. Maine has 74 full shellfish leases and over 540 Limited Purpose or Experimental leases--and all these leases can sell product commercially
  3. Maryland went from 3,304 bushels in 2012 to 74,066 bushels of oysters in 2017
  4. Virginia has seen a 300% increase in production in 10 years
  5. North Carolina has 48 water column leases--up from 2 leases on 2011
  6. Florida has 200+ leases and just permitted 90 more
  7. Texas just started their aquaculture program
  8. Washington State: Always strong continues to add new farms and grow existing
  9. The Canadian government is really supporting the growth of the industry in the Maritime providence and British Columbia.
  10. Mexico has increasing production on the Baja peninsula. 

2) Wild harvests continue to decline.  Especially most recently in the Gulf of Mexico.

3) Prices vary by region and over time.  Reports by farmers seem to point to the Fall being the worst for the Northeast as many smaller farmers sell off crop they don't want to hold over the winter. Others in Louisiana and elsewhere are reporting that they can't keep up with demand. I regularly hear that prices for high-quality half-shell oyster range from a low of $.30 to a high of $70/pc on the wholesale market.  For folks selling directly to restaurants, the price is often between $.60 and $1/oyster.   

4) Wholesalers/Distributors are doing great:  A major distributor in the Northeast reported that their business has been up 20% y/y for the last 10 years and more than 40% this year.  Real Oyster Cult--a direct to consumer business--has seem their business rise by over 100% in the last year.

5) Restaurants continue to push oysters.  They are a profitable item and tend to be paired with drinks--the most profitable items for a restaurant.

6) Global restaurant trends still support oysters: 

Hyper-local food is a hot trend according to 60% of chefs.  

Sustainable Seafood is a top trend for proteins

7) Folks are not getting sick:  Despite the occasional click-bait article, the number of reported illnesses is down on a per-capita basis.  

8) We are nowhere near our historic consumption:  In the 1890s, ~30% of the protein for the working class came from shellfish--today it is probably well less than 1%

So what should the oyster farmer do?  

1) Be an efficient producer:  If we do hit a drop, being able to produce oyster cost effectively will make all the difference.

2) Build strong relationships with your buyers:  Be the folks that are easy to work with.  Deliver a high-quality product on time as promised.

3) Save for a rainy day: Whether it is a hurricane, ice storm, or dropping demand, something will happen make sure you have savings to tide your over.  

Topics: #OysterLife
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4 min read

Environmental Services: A New Revenue Opportunity for Oyster Farms

By Chip Terry on Oct 29, 2019 3:00:23 PM

 

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Our waterways are stressed by excess nutrients--especially nitrogen and phosphate. Nitrogen and phosphate fertilizer fueled the "green revolution" that saw grain harvest double within 20 years.  This amazing revolution has fed millions and delivered beautiful green lawns to many.

However, roughly 50% of these nutrients run off into waterways. Numerous other nutrient sources like sewage, urban runoff and industrial sources add to the nutrient load.  Excess nutrients fuels algae blooms.  As the algae decays it sucks oxygen out of the water and we end up with dead waterways.  From Cape Cod  and the Chesapeake Bay, to Florida, and Puget Sound the results are not pretty. The EPA estimates 15,000 water bodies in the US are impacted.

What causes harmful algal blooms - Clean Water Action

Most waterways in the US now have EPA approved Total Maximum Daily Loads (TMDLs) that define how much pollution can safely be added to waterways. States and local communities then have Best Management Practices (BMPs) that allow them to figure out how to meet the TMDL goal. The solution could be building a new sewage treatment plant, putting limits on waterfront development, paying farmers to let fields lie fallow....and now paying oyster farmers to farm more oysters!

A BMP panel in the Chesapeake reviewed all the literature and concluded that oysters sequester nitrogen and phosphate and when harvested remove those nutrients from the water.  And in case you are wondering, most of that is in the shell or turned into a harmless gas--it is not like oysters are hoarding something that is bad for people. The team even came up with a formula for how much each oyster sequesters.  Every 500,000 3" oysters removes ~100lbs of nitrogen and 11lbs of phosphate from the water.

Now MD and VA have passed laws that will eventually pay oyster farms to grow more oysters. The mechanism is a "nutrient credit trading program."  For example if a new development is putting in lawns that will require lots of fertilizer, the developer can buy offsetting credits. For every pound of nutrient they will put in, they must buy 2 pounds of offsetting credits.

Regulators are working through the details of how to implement these laws.  For example: Do we pay for just increase or the entire harvest?  Diploid and Triploids sequester different amounts how do we account for that? How close to the development does the oyster farm need to be? Is this an annual cost or one-time? And most importantly how do we track this so it is easy to participate and not open to fraud?

Since the programs are not up yet, the actual value of a farmed oyster is unknown.  But there are some hints. Nitrogen value seems to be between $12/lb and $37/lb and Phosphate at $15,000/lb to $54,000/lb (turns out it is much harder to sequester phosphate).  Taking conservative values and halving them, we get to ~$.17/oyster.  If that holds up, farmers in VA and MD would be seeing an over 30% increase in revenue. 

The caveat:  The programs are not started yet.  There are a lot of unknowns.  Although the math works, $.17/oyster seems really optimistic. Don't start spending yet.  

For those who want more reading:

1) The Stockholm Resilience Center, an organization that examines the largest threats to natural life-support systems, considers our overuse of nitrogen a more extreme risk to life on Earth than climate change. 

2) Wikipedia has a good overview of the TMDL system

3) Here is the final report from the Oyster BMP program in the Chesepeake

4) Here is Maryland program.  As of this writing it is not ready for oyster farmers.

 

And here are some examples of why this is a problem. 

Florida puts 47.5 million gallons of partially treated human waste in the water daily.

Everyone knows Great Bay (NH) is in trouble. Polluted clam flats, a 90 percent loss of oyster beds, eelgrass gone or substantially gone in many areas, siltation, stormwater runoff and excessive nitrogen. 

The EPA reports that over 15,000 waterways in the US suffer from excess nutrients.

Puget Sound has had a number of harmful algae blooms. 

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