AQUACULTURAL SITUATION AND OUTLOOK
"TEACH A PERSON HOW TO FISH -- HE CAN SURVIVE"
"TEACH A PERSON HOW TO GROW FISH -- HE CAN MAKE A LIVING" ??
Jerry R. Crews
Extension Economist
Auburn University
Aquaculture is defined as “farming of aquatic organisms”, such as
finfish, crustaceans, mollusks and plants. Aquacultural farming
implies the producers have some control of the environment. The
operation intervenes the process to enhance production, such as
stocking, feeding and increase the capacity through aeration and
other management strategies. Another definition of aquaculture
is related to “ownership” of the produce being cultivated in
contrast to common property capture fisheries.
WORLD AQUACULTURE
Fish supplies about one-fifth of the animal protein consumed by
humans worldwide. Fish harvested annually from the world's
oceans have leveled off and are not able to meet present day
demand. Approximately two-thirds of the world’s conventional
commercial species are now fully exploited, overexploited,
depleted, or recovering from depletion. At the same time, world
population and per capita fish consumption in developed countries
continues to increase. The only way to erase fish deficits is to
turn more toward aquacultural production. Today, more than 25
percent of world fish supplies come from aquaculture, more than
doubling in the last 10 years.
Practiced for two thousand years in Asia, U. S. aquaculture has
only been around for a century and the industry hasn't taken off
until recently, attributable to one species - catfish. While its
growth has been tremendous in the last 25 years, in 2001, it
still only accounts for 7 percent of the seafood that Americans
consume. The rest comes from imports, primarily shrimp, tuna and
salmon (75 percent) and U. S. wild catches (18 percent). Imports
have been increasing “big time” in the last few years.
_____________________________________________________
Presented at the Southern Regional Agricultural Outlook
Conference, Tunica, Mississippi, September 23-25, 2002.
U. S. CONSUMPTION
U.S. per capita fish and seafood consumption grew during the
1980’s, from 12.6 to the 16.2 pound range. Since then,
consumption has had no deviation more than one pound per year.
Consumption has stabilized at the 14 - 15 pound mark. In 2001,
per capita consumption was 14.8, a decrease from 15.6 in 2000.
The top ten seafood species consumed by Americans in 2001 were,
in descending order: shrimp, tuna, salmon, pollock, catfish, cod,
clams, crabs, flatfish and tilapia. This is the first year that
shrimp became “number one”, further, this is the first year
tilapia made the “top ten”.
Aquaculture is significant in four of the species: one hundred
percent from catfish; over fifty percent from salmon; over 25
percent from shrimp and majority from tilapia.
U. S. AQUACULTURE
Aquaculture species grown in the United States include finfish
(catfish,
trout, salmon, striped bass, tilapia,
baitfish,
ornamental fish, and other species), crustaceans (crawfish,
shrimp, and others), mollusks (oysters, clams, mussels, and
others), and aquatic plants. Producers range from corporations
employing several hundred workers to small family farms. Total
production in 1999 amounted to 842 million pounds and was valued
at almost 987 million dollars.
In 1999, just over seventy percent of the U.S. aquaculture
production was catfish, but over 30 species were cultured. Trout
was the second largest domestically produced aquaculture species
on a quantity basis (7%), followed by crawfish (5%) and salmon
(5%). On a value basis, however, catfish represents 45 percent,
followed by salmon (8%), trout (7%), baitfish/ornamental (6%) and
crawfish (4%).
Marine aquaculture made up approximately 10 percent of U.S.
aquaculture production. Marine aquaculture in the United States
is dominated by salmon and oyster culture, which represents about
70 percent of the total. Other species that make up the
remaining 30 percent are clams, mussels, and shrimp. Crabs, red
drum, scallops, and striped bass are also being commercially
produced to a lesser degree.
As species vary, so do production facility systems. The pond
production facility accounts for over 60 percent of all U. S.
aquaculture. Raceways account for 14 percent (primarily trout);
closed recirculating systems account for 7 percent (tilapia, etc)
and pen/cage culture systems account for 4 percent (primarily
salmon).
U. S. CATFISH INDUSTRY - BACKGROUND
Most aquaculture production in the U.S. is located in the south.
The region's warm climate and abundant land and water resources
positioned it for rapid growth during the last two decades. The
southern region's aquaculture industry is the most diverse in the
U.S. There are more than 30 species grown commercially on farms
for food, bait and ornamental markets.
Catfish is by far the most important aquacultural specie in the
Southern region. The growth of the catfish industry has been
phenomenal. In 1970, less than 6 million pounds were processed.
By 1990, that figure grew to over 360 million and in 2001, 597
million pounds were processed; a phenomenal increase of 100 fold
in this period.
Mississippi is the leading producer of catfish accounting for
over 60 percent of sales. Alabama, Arkansas, and Louisiana are
also considered major producers, contributing sixteen, fifteen
and six percent to U.S. sales, respectively.
U. S. CATFISH INDUSTRY – STRUGGLING TODAY
Round weight processing of catfish has been around 600 million
pounds for the last three years (1999 – 2001). Producer’s price
is a different story -- in late 2000, prices fell below 70
cents. By the end of 2001, the cycle continued at the price of
55 cents. Projecting prices for 2002 could be the lowest annual
prices in the last twenty years – ranging 56 - 57 cents. The
producer’s price can be credited to both supply and demand.
Major factors affecting the catfish industry are expected to
continue. On the down side, the catfish industry is wrestling
with several issues –-producer/processor’s prices, current
inventory, domestic competition (chicken, etc.), international
competition (imports), slow down in the economy, and the
producer’s cost of production (feed prices, environmental
regulation, bird predation, management strategies).
Producer’s Price
With producer and processor inventories up in 2001, prices
received by farmers were 10 cents below 2000. Typically price
rallies begin in late spring, but in 2001, the prices never had a
spurt. Late summer and fall had a crash (the lowest prices since
1992). With a slowing economy and acceleration of import volume,
pressure was placed on the industry, the worst in 25 years. The
2002 average price could be in the 56 - 57 range. Combining
stagnant processor sales with depressed prices, the farmgate
receipts for catfish producers (for foodfish delivered to
processing plants) should be down $35 million, approximately $350
million for 2002. In the last two years, the total producer’s
revenue is down almost $100 million.
Imports
This is a relatively new phenomenon
--
imports.
Foreign catfish supplies have been relatively small until the
last couple of years. These products are frozen fillets and are
targeted to the food service industry (chain restaurants,
buffets, retail outlets, etc.) Dramatic shifts started in 2000.
From 1995 to 1999, imports only supplied 1-3 percent of the U. S.
frozen fillet market. In 2000, imports were over 6 percent. In
2001, supply of the U. S. frozen fillet market (95 % from
Vietnam) was over 13 percent -- an increase over 100 %, in just
one year.
Legislation/Legal
There is a temporary, one-year ban, signed into law last year,
which prohibits the U.S. Food and Drug Administration from
allowing any catfish to be imported into the U.S. market labeled
as "catfish" unless it comes from the North American Ictaluridae
family. The imports restrictions last for the fiscal year 2001,
which ends September 2002.
Imports of fish from Vietnam targeted to compete with U.S. farmraised catfish present a real threat to the domestic industry,
according to a preliminary finding by the International Trade
Commission. This is the first "pass" in the process of the
“antidumping” case filed by the Catfish Farmers of America and
eight processors. The Department of Commerce will issue a final
determination between April - June 2003. If the catfish industry
is successful, the International Trade Commission could require
Vietnam fish exporters to pay high tariffs and limit imports to
the U.S.
Inventory
Beginning in January, producer’s (and processor’s) inventory was
up. The latest inventory (July 1st) estimates (all on a
liveweight basis) indicate that foodsize (3/4 pounds and larger)
is running 11 percent above last year. The crop of fish will be
available to supply the processing need for the rest of 2002 and
into 2003.
The inventory of stockers (fish between 6 and 13 inches) was
estimated to be up 14 percent. These fish are ones which should
be marketable starting in late spring 2003. The supply of
fingerlings (less than 6 inches) was estimated to be up by 14
percent. This class will be the base of production supplies
beginning late fall 2003 and into 2004.
Preliminary estimates of total processing pounds for 2002 are up
by 4 percent – 621 million. Given that case, the January 2003
inventory for foodfish could be down slightly. Stockers could be
down by 10 – 15 percent. Fingerlings could be even.
Economy
With a forecast of a flat domestic economy and continuing volume
of imports, the demand for U. S. catfish from the restaurant and
food service sectors does not look rosy. This translates into
decreased “away from home” eating which provides strong support
for catfish/seafood sales. This is critical to the industry
because this sector accounts for over two-thirds of all seafood
sales.
Cost of Production
One key factor (other than selling price) that directly impacts
profitability is feed costs. Over 50 percent of cash costs are
tied up in feed (every $10 per ton change in feed equates to a 1+
cent per pound in breakeven costs). Based on 2002/2003 corn and
soybean forecasts, feed costs could go up substantially. Feed
prices have been moderate since 1998, which encouraged producers
to increase feeding intensity. As lower selling prices, higher
feed costs and marketable weights continues to “inch up”, many
producers will rethink their feeding strategies.
Cost of production will be different for each producer. Why? No
two situations will be the same. From the road, two operations
could appear to be identical. However, one could be highly
leveraged, while the other could be virtually debt-free. This
single factor could drastically change their approach to risk
management -- especially at low prices. One could afford to
take more risk in terms of stocking density, feeding, aerations,
etc. The other producer has to be more conservative. Management
is definitely a moving target.
Some producers are evaluating their production schemes. It is
very difficult to make any transition due to multiple-batching (3
– 4 crops) production systems. To be more efficient, producers
are looking into “modular” components (separating by crops, i.e.
more uniform) and improved genetically stocks.
2002/2003 OUTLOOK
Up to now, the catfish industry has been infant baby. But maybe
the industry is making a transition – from a baby to a teenager
or an adult.
Is the catfish industry on a 10-year cycle? One producer made
this statement eight years ago. Is he right? In the last twenty
years, the only years that have fallen below 60 cents have been
1982, 1992 and 2002 (projected). The industry is now at a
"cross-road" due to economy instability and international
competition.
Look for the 2002/2003 season to be even worse than last year.
Efficient producers with reasonable equity may ride the storm.
Others will be tested or go out of business.
References:
"Aquaculture Outlook", ERS, USDA, Various Issues.
"Catfish Processing", NASS, USDA, Various Issues.
"Catfish Production", NASS, USDA, Various Issues.
"Fisheries of the United States, 2000" National Marine Fisheries
Service, U. S. Department of Commerce.