By E. M. Morrison

Renville, Minn. -- This is the fish said to have fed the multitudes in the miracle of loaves and fishes. Aristotle gave it its name, and the pharaohs raised it in ponds.

Now it's growing on the Minnesota prairie.

MinAqua Fisheries of Renville, a pioneer in indoor recirculation aquaculture, is raising tilapia, a mild-tasting white fish from the warm waters of the Nile River. The $4.7 million grower-owned farm harvested its first fish crop in March, and is already one of the largest tilapia growers in North America. This year, the company expects to produce about two million pounds of fish.

Modern technology, ancient practice
Tilapia cultivation was first described five thousand years ago in Egyptian hieroglyphs. Hardy and fast-growing, tilapia are now widely cultured in Africa, Asia and South America, usually in outdoor ponds.

Because tilapia need very warm water, production has concentrated in the tropics. But advances in indoor aquaculture are making year-round tilapia cultivation feasible in cold regions.

Environmental conditions in MinAqua Fisheries' 40 indoor fish tanks are carefully controlled. Water, circulating through the filtration system every 35 minutes, is maintained at a precise 85 degrees. Oxygen manufactured on site bubbles up through 100-foot dry-hole wells. Fifteen to 24 times a day, soybean-based feed pellets drop automatically to the water's surface.

One million gallons of water circulate through the system, warmed by waste heat from the nearby Southern Minnesota Beet Sugar Cooperative processing plant. Using that heat provides big cost savings, says Mel Stocks, president and CEO of MinAqua. The cheap heat cuts energy expenses 90 percent, he estimates, keeping production costs between $0.95 and $1.10 per pound. Without recycled heat, Stocks says, "we wouldn't be here."

Out of the hot water pipe
In fact, MinAqua began as an effort to find a use for all that waste heat. Granite Falls farmer Richard Fagen recalls how the venture started unexpectedly with a visit to his dentist in 1995. "My dentist was head of the economic development commission in Renville, and Renville needed something on the end of their hot water pipe. He asked me about aquaculture," Fagen says.

Fagen has been interested in aquaculture for two decades. In the 1980s, he operated an ethanol plant on his farm and used excess distillery heat to grow tilapia. But eventually, "the ethanol, the fish and farming got to be too much." In the late '80s, Fagen sold off the ethanol business.

Soon after, Basin Electric asked Fagen to develop a tilapia operation in Beulah, N.D., using waste heat from a coal-fired electric generating plant. Once he put together the plans, Fagen sold the idea to another developer and went on to build a tilapia hatchery in Philip, S.D., using geothermal water.

So when Fagen's dentist asked him to build a fish farm in Renville, "I told him I had already tried it, and the way to do it would be as a cooperative."

Taste it first
Hooked again, Fagen recruited a small group of southern Minnesota farmers to explore raising tilapia. Most had never even eaten the fish. "I thought we should at least taste what we were thinking of growing," Fagen says. It happened that Jim's Cafe in Maynard had fried tilapia on the menu. "We all tried it and everybody liked it."

At meetings with growers later that year, the group served tilapia for lunch, and it went over well. So well, the meetings generated enough support to conduct feasibility studies and develop the first business plan. AURI helped pay for the studies, which showed solid demand for live tilapia in oriental markets throughout North America.

In March 1996 the group began selling stock in their new cooperative. Membership was limited to soybean farmers, who pledged 75 bushels of beans per share per year for feed. The minimum investment was $6,000.

"It was a relatively small investment," says Stocks, a former Harvest States executive, "so we attracted a large base of farmers from southern Minnesota. That's a strength of this cooperative." In weeks, the co-op netted 350 members and $2.5 million in equity capital. Co-Bank of Omaha and Northern States Power lent an additional $2.2 million.

The project, designed by Aquatic Bio-Enhancement Systems of Sugar Land, Texas, broke ground in September 1996. Last October, MinAqua Fisheries took in its first batch of fingerlings and began raising tilapia in two 35,000-square-foot barns.

High-jumpin' harvest
The water in a 33,000-gallon rearing tank in MinAqua's east barn has been lowered several feet. Green-striped tilapia, resembling Minnesota sunfish, circle the octagonal tank. The fish each weigh slightly more than a pound -- just right for eight-ounce filets -- and are ready for harvest.

Two aquaculturists push a slatted gate through the dark water, herding the fish toward a trap door in the tank wall. The fish swim through and into a shallow channel topped with an orange plastic snow fence (tilapia are good jumpers).

The channel leads to a purging tank, where the fish are not fed for three days. Once purged, they're loaded into insulated aquarium trucks bound for Toronto, New York City and other urban centers where they'll be distributed live to grocery stores, fish markets and restaurants.

Wholesale prices for live tilapia have ranged from $1.20 to $1.80 a pound this year, says Stocks, who sells most of MinAqua's fish through the North American Fish Farmers Cooperative, a marketing group based in Binford, N.D. The Renville fishery expects first-year revenues of about $3 million, Stocks says, and projects a 17 percent return on investment.

A lively market
U.S farmers now raise about 20 million pounds of tilapia annually for the live market. According to a 1998 USDA report, the United States consumes about 100 million pounds per year; most imported frozen from Taiwan and Indonesia, where production costs are low. In the last five years, however, domestic production has increased 300 percent, according to the American Tilapia Association.

Nevertheless, the tilapia market is largely limited to ethnic Asians. "Tilapia is still a small niche," says Todd Sisson, AURI aquaculture specialist. "MinAqua alone could probably saturate the Toronto market." Sisson says the industry needs to increase overall demand for tilapia by educating mainstream consumers.

Stocks agrees. But MinAqua also has one big marketing advantage, he says. "Buyers and distributors have not had a reliable supply of quality tilapia week in and week out." MinAqua, one of the five largest tilapia producers in North America, can now supply uniform, high-quality, tank-reared fish year-round. "We do a careful job, and we've had good reports on our fish."