For the first time, the world is eating more fish from farms than from the open sea, spurring billions of dollars of takeovers as one of the largest food companies seeks to capitalize on rising demand.

The latest buyer to enter the fray is Cargill Inc., the world’s biggest grain trader and a meat supplier, which said Monday it agreed to acquire Norwegian salmon-feed business EWOS Holding AS for $1.5 billion.

Fish consumption is growing at a faster pace than beef, pork and poultry, driven by an expanding, increasingly prosperous global population that recognizes the health benefits of eating seafood. Demand is forecast by the United Nations to outstrip supply in coming years. Wild fish aren’t going to fill the gap, and that leaves farming in lakes and coastal waters -- also known as aquaculture -- to make up the shortfall.

“We can expect that large companies active in commodities, animal proteins and life sciences will be considering this industry and how they can play a role in the growth of what some call the Blue Revolution, the growth of marine farming of food and feed,” Gorjan Nikolik, a Rabobank International seafood-industry analyst, said by phone from Utrecht, the Netherlands.

David Fuller's view

This is inevitable, given the growing demand for fish.  There are obvious risks of contamination and the endangerment of wild fish.  A challenge for the fish farming industry will be to reduce this risk, and it is in their long-term interests to do so.

Are fish farms a good business?

They should be, at least in terms of demand, although this article shows them being taken over by large firms such as the grain trader and meat supplier, Cargill Inc, which is a private company.  General trading company Mitsubishi Corp is also mention, although fish farming will be a tiny proportion of its overall business.  Nevertheless, Mitsubishi Corp (est p/e 10.36 & yield 2.31%) looks attractive following the recent pullback from an overextended position relative to the MA.