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Feeding a Hungry World: Aquaculture

Experts expect the world’s population to reach 9.5 billion people by 2050.

One question – out of the many that rise from having a population that size – is, “How are we going to feed everyone?”

Aquaculture (or farmed fish) is one answer.

While the thought of a fish farm may sound absurd, it’s a rapidly growing and profitable business.

So profitable, in fact, that one aquaculture company’s stock nearly doubled over the past two years.

Gobbling up Farmed Fish

The United Nations Food and Agricultural Organization says that the per-capita consumption of farmed fish will rise 4.4% this year to 10.3 kilograms.

That number is significant because, for the first time ever, farmed fish consumption is greater than wild fish consumption.

This year’s per-capita consumption for wild fish is only 9.7 kilograms, down 1.5%.

The ever-rising population in the emerging world has pushed fish prices to record highs, too.

Especially for species that are in short supply but in high demand, such as salmon.

Demand for this fish – popular for its health benefits – is well above the historical norm and has seen a 7% rise in annual consumption.

In fact, the market for Atlantic salmon alone is a $11.5-billion business. Just last year, Norwegian salmon prices leapt to a record high of over $8.50 a kilogram.

This year’s expected price rise, however, was alleviated by the sanctions on Russia, a major customer of salmon.

Feeding the Fish

So how can the average investor profit from this global movement toward farmed fish?

The easiest and best way for investors to do so is with a Norwegian firm called Marine Harvest ASA (MHG).

It’s the world’s largest farmer of Atlantic salmon; has operations in Norway, Chile, and Scotland; and produced about 414,000 metric tons this year.

Plus, its earnings grew sixfold in 2013!

Marine Harvest is also doing a lot to upgrade its image with environmentalists, which can darken the public’s perception of fish farming

The company cut back sharply on the use of pesticides and other questionable practices by joining a strict environmental regime – the Aquaculture Stewardship Council, which is championed by the World Wildlife Fund.

Marine Harvest is also very active on the business front.

It’s been the lead consolidator in the industry, adding smaller companies to its operations in both Norway and Chile.

And it recently became much more generous to its shareholders – the company is raising its quarterly dividend, pushing yields to around 6%.

The company’s aggressiveness, new environmental consciousness, and healthy dividend yield make it the pick in the growing aquaculture industry.

And “the chase” continues,

Tim Maverick

Tim Maverick

, Senior Correspondent

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