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Friday, September 10, 2010
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John Filose—Seafood Business Consultant
“Are these much improved wholesale price levels for shrimp and salmon an indication that we are back to ‘Good Times’ in the USA seafood industry? In my opinion, the answer is a definite NO!!”
John Filose, a former Chairman of the National Fisheries Institute and a former senior executive at three USA food companies, retired from Ocean Garden Products in 2009 and became a seafood business consultant. He recently finished an in-depth analysis of the import and distribution of seafood in the United States.
He submitted this report to Shrimp News on the general health of the seafood business in the United States. It discusses salmon and shrimp prices, the “activist nature” of the Federal Government—and provides some indicators to watch, so you know when “Good Times” have really returned.
Salmon and Shrimp
Based on a couple of decades of experience in the seafood business, I’ve found that shrimp and salmon, the two leading seafoods in terms of per capita consumption in the USA, are very good indicators of the general health of the seafood industry. It’s good to see that USA wholesale prices for shrimp and salmon have recovered from their 2008–2009 lows, caused by the Great Recession, the worst economic period since the Great Depression of the 1930s. As this article is being written in early August 2010, wholesale prices for shrimp and salmon are actually quite strong, and in some cases higher than they have been in a number of years. What a difference a year makes! The year-to-year recovery in wholesale prices has been nothing short of miraculous.
Are these much-improved wholesale price levels for shrimp and salmon an indication that we are back to “Good Times” in the USA seafood industry? In my opinion, the answer is a definite NO!! The return of Good Times will come when consumer demand is increasing for shrimp, salmon and other high-value seafood items. That has not happened in the USA. Overall, demand for seafood is still weak at both the foodservice and retail levels. Restaurant sales, in general, are still sub-par, and some retailers report very poor sales.
The current high prices for shrimp and salmon reflect a supply-side shortage! Declining shrimp imports from many producing countries, coupled with the lack of USA domestic shrimp, has brought down the total shrimp supply. In addition, many importers and distributors actually reduced their shrimp inventories at the end of 2009, so now we’re seeing shortages from some countries and gaps in sizes from other countries. In fact, large shrimp are in critically short supply, with resulting sky-high prices.
High prices, based on supply problems, and not on increasing consumer demand, are always a cause for concern. Without a firm foundation, those high prices could become a “house of cards”. We are already seeing that some retailers and restaurants are no longer promoting shrimp and salmon because of the recent rapid run up in wholesale prices. Without an increase in consumer demand, additional supplies to the USA will tend to drive down wholesale prices—and could collapse the house of cards!
The Activist Nature of the Current Federal Government
Producers and exporters who follow the USA seafood market should also be aware of the activist nature of the current Federal Government. President Obama’s senior level appointees at the FDA and USDA have aggressive agendas, driven by a Congress controlled by Democrats, many of whom are anti-import because they represent states that harvest food and seafood products. These forces have already drawn a lot of attention to imported foods—especially seafood. That trend will continue. Recent Congressional activity regarding next years’ Federal budget reveals the following areas of special interest to the seafood industry.
Seafood Safety: In general, the various Federal agencies have been instructed to strengthen their cooperation with each other on the testing of seafood imports. You can be sure this will result in increased inspections!
Higher Funding for FDA: There will be new inspectors, increased laboratory capacity and new traceability programs. We can expect more FDA interaction with the various state regulatory authorities, too. This means that once your seafood product passes through FDA clearance, state inspectors could still reject it and also notify FDA.
Economic Integrity: This means accurate net weights, proper species identification, correct country-of-origin labeling and proper labeling of additives. Violations in these areas are often detected by state inspectors and can result in substantial legal difficulties and large monetary damages.
Antibiotics in Shrimp: One congressional committee reported: “The Committee is concerned about the contamination of farm-raised shrimp imports with banned antibiotics”. I have been around for many years, and can say that this is a very strong statement! Also, FDA is directed to cooperate with state testing programs and to develop a plan to increase the detection of banned antibiotics. No shrimp producer should even think about using chloramphenicol, nitrofurans, or any other banned antibiotics.
How to Identify Good Times in the USA
The USA marketplace will continue to be the primary target for high-value seafood items. Before the really “Good Times” for seafood consumption return, however, the economy must truly be on the rebound. Follow the Dow Jones Index, the Unemployment Rate, and perhaps most important, the Consumer Confidence Index. When these three indices are all improving, we will see increased consumer demand for seafood from foodservice and retail. Only strong consumer demand can hold up higher wholesale prices. While you are tracking the movements of those indicators, also keep an eye on the Federal Government for signs of increased regulation of the seafood industry.
Information: John Filose, Filose & Associates, 1921 Wandering Road, Encinitas, California 92024, USA (cell phone 1-760-815-6434, email firstname.lastname@example.org).
Source: Email to Shrimp News International from John Filose. Subject: My Latest Article. August 26, 2010.
Salmon or Shrimp—Vote for Your Favorite
The YumSugar.com website is taking a survey to determine which seafood the American public likes more—salmon or shrimp. As of September 8, 2010, (10:13 a.m. West Coast Time), 392 people had voted in the survey.
The score, so far: Shrimp: 216 (55%), Salmon: 153 (39%), and I Don’t Eat Fish: 23 (6%).
Twenty-five of the 392 respondents left comments. Half the commenters said they liked both shrimp and salmon. Nine of them came out strongly for salmon and seven for shrimp. Here are some of their comments:
Chelsea25: I love salmon. Baked, grilled, smoked...absolutely love it. I wonder if there’s such a thing as eating too much of it. I eat it in one form or another every day!
Snookyx: I love both, but I would rather have shrimp. I have been craving honey walnut shrimp lately.
HoneyBrown: I love both. But, I’d rather have the shrimp.
Spectra: Shrimp!! I love it, but I don’t buy it very often. Salmon’s pretty good, too, though.
Skigurl: Shrimp, if forced to choose, but I like both!
[Editor: I voted for shrimp, but on my second visit to the page, I was no longer given the option to vote, which probably means that you only get one vote per email address, which probably means YOU can still vote. Just click on the link below, and hopefully the option to vote will pop up for you. Then check back in a couple of days to see if we influenced the vote. Whatever you do, don’t tell anyone in the salmon industry about this contest because we all know that they would vote for salmon, even if they liked shrimp better.]
Source: YumSugar.com. Would Your Rather Eat Shrimp or Salmon. Website Visit on September 4, 2010.
Listening in on Your Shrimp
AQ1 Systems has pioneered the use of listening devices to manag shrimp feeding. An underwater microphone (hydrophone) is used to measure “clicking” by shrimp. The level of feeding noise can then be correlated with the demand for feed and used to manage and automate feed delivery. [Editor, the “clicking” sounds are probably produced by the shrimp bumping into each other during feeding.]
AQ1 Systems has also recently released the SF100 Shrimp Feeding Analyzer, a portable, hand-held hydrophone device for measuring shrimp feeding activity, providing for the first time a real alternative to feeding trays. This device along with a fully networked version for permanent across-farm deployment is a timely tool for an industry already witnessing the introduction of automated feeding systems.
Information: John Cooksey, World Aquaculture Conference Management, P.O. Box 2302, Valley Center, CA 92082 USA (phone 1-760-751-5005, fax 1-760-751-5003, email email@example.com).
Source: World Aquaculture Society. The CD/Abstracts of Australian Aquaculture 2010. Development of Passive Acoustic Monitoring as a Feedback Mechanism in Intelligent Feeding of Vocalizing Species in Aquaculture Including Shrimp (Penaeus Monodon, P. Vannamei, P. Merguiensis) and Barramundi (Lates Calcarifer). Stephen Shotton (firstname.lastname@example.org, AQ1 Systems, Pty., Ltd., Level 1, 110 Murray Street, Hobart, Tasmania 7001, Australia). Hobart, Australia, May 2010.
Nick Moore for President and Alistair Dick for Vice President
Nick Moore and Alistair Dick have been re-elected as president and vice president of the Australian Prawn Farmers Association. The Executive Committee of the APFA now includes: Nick Moore (Gold Coast Marine Aquaculture), John Molony (Coral Sea Farms), Matt West (Australian Prawn Farms), Alistair Dick (Pacific Reef Fisheries), Warren Lewis (Aquaculture Marine), Trevor Anderson (Seafarm, Pty., Ltd.), Catherine Chen (Monagold, Pty., Ltd.,) and Sharon Pullen (DKM Accounting Group).
Moore said the Queensland shrimp farming industry is looking at new ways for farmers to increase production and working through the government regulations and red tape that are holding the industry back. “Our farmers need to be given every opportunity to feed beyond Australia, and we will continue to work at making this happen through the aquaculture industry,” Moore said.
Source: BluesCountry.com. Prawn Farmers Elect New Executive. August 26, 2010.
References Prices for September 2010
After halting its project for more than a year, Gamba Natural reports that it will begin farming shrimp in the town of Medina del Campo, in the community [state/province] of Castilla y León, in 2011. The mayor of the town, Crescencio Martín Pascual, said company executives have assured him that they will start production “within a short period of time,” by early 2011. Pascual said, “We will be able to eat shrimp by next Christmas.”
Gamba Natural will install 24 tanks on a 6,400-square-meter site in the Medina del Campo Industrial Park. It hopes to produce roughly 175 tons of shrimp a year.
Other shrimp farms exist in Huelva and Cadiz communities.
Source: FIS United States. Shrimp Farming to Begin During 2011 in Castilla y León. Analia Murias (email@example.com). August 27, 2010.
Hawaii—Only One Shrimp Farm Remains on the Island of Oahu
Romy’s Kahuku Prawns and Shrimp Farm is the only remaining shrimp farm on Oahu, unnamed experts at the Oceanic Institute told a TV station in Honolulu. Romy Aguinaldo, who runs the farm, said he has survived by setting modest goals. “I don’t push my production,” he said, adding that trying to grow too many shrimp in a pond makes shrimp more susceptible to diseases and other problems.
His 52 ponds produce about 200 pounds a day of freshwater prawns (Macrobrachium rosenbergii) and shrimp (Penaeus vannamei). He said that is barely enough to feed the customers at his roadside restaurant. Staying afloat still means his family, including his wife and daughter, must pitch in. He said he has no plans to resume deliveries to stores or restaurants because he can’t afford to sell at wholesale prices.
To meet customer demand, Aguinaldo wants to develop more ponds, but he has a little problem with his landlord—the Federal Government. A few years ago, the USA Fish and Wildlife Service bought the property he’s on for a wildlife reserve, and Aguinaldo’s lease expires in 2023. “I wish they would give us more time. We really love the area,” Aguinaldo said.
There are other shrimp farming enterprises across the state, but the Hawaii Department of Agriculture said they are almost entirely devoted to producing shrimp broodstock, which are sent around the world as disease-free breeding stock for shrimp hatcheries.
Even though Romy’s serves very fresh farmed shrimp, some customers told the TV station reporters that it would not make a difference to them whether the shrimp was local or imported, and, so far, other roadside restaurants in the area have not been eager to announce that locally produced shrimp is a very rare commodity.
Video: You can view the video of the above report by clicking on the link in the Source below. When you click on the arrowhead to start the video, you might get a ten-second commercial before the video on shrimp farming begins. I recommend that you put up with the commercial and watch the four-minute video, especially if you’re interested in shrimp farming in Hawaii. You’ll see and hear Aguinaldo talking about his farm, with the farm in the background.
Source: KITV.com. Shrimp Farms Fade Despite Shrimp Farm Fad. Daryl Duff. August 26, 2010.
Louisiana—Fishermen Say No One Wants Their Shrimp
President Obama served plates of barbecued gulf shrimp to guests at his 49th birthday party on August 9, 2010, but Kindra Arnesen, who runs a shrimp boat with her husband in southern Louisiana, isn’t nearly ready to eat what comes out of the tepid gray waters of the Gulf.
When news first hit of the massive oil blowout, Arnesen filled her freezer with shrimp. She has no intention of eating fresh seafood until she stops hearing from her fellow fishermen about blobs of oil on the sea bottom and tiny droplets of dispersed hydrocarbons in the water.
“I’m not going to sell somebody something I wouldn’t feed my own kids, and we’re not eating it,” Arnesen said. “They can eat burgers for awhile.”
Despite the reopening of most Gulf waters to commercial fishing, many fishermen say that early catches of shrimp and oysters have been meager, prompting fears that the oil spill generation may have been largely wiped out. Just as big a challenge, though, has been getting the troubled fishing industry back up and running. The opening of white shrimp season on August 16, 2010, much anticipated after months of fishing closures, was almost a nonevent—the majority of shrimp boat owners were still working on the BP cleanup, many earning $1,500 a day or more, which at today’s depressed shrimp prices can be more lucrative than fishing.
Local seafood buyers bereft of supply are closing their docks to keep losses from multiplying, leaving shrimpers who couldn’t get hired by BP with few outlets to sell their catch. Meanwhile, national frozen fish buyers are driving down prices, threatening to eviscerate the gulf seafood industry’s future markets by signing new contracts for Asian and Latin American shrimp!
Fishermen who have plied the reopened waters nearest the oil spill say catches have been meager compared with years past. Shrimp are always fickle. Seasons vary. But many are concerned. Acy J. Cooper, a longtime shrimper and vice president of the Louisiana Shrimp Association, said he brought in only 500 pounds of shrimp, when normally he would have caught up to 2,000 pounds. And the price was down from more than $2 a pound before the spill, to $1.25.
Source: Seafood.com (an online, subscription-based, fisheries news service). Editor and Publisher, John Sackton (phone 1-781-861-1441, email firstname.lastname@example.org). Even In Louisiana Customers Wary of Gulf Shrimp; Aug 16th Opening Was Non-Event. August 27, 2010.
Washington DC—Change in Dumping Regulations for China and Vietnam
The USA Department of Commerce, as part of the Obama administration's national export initiative and desire to strengthen trade enforcement, has sent out for comment a series of measures that would drastically change the anti-dumping landscape for “non-market” economies like China and Vietnam.
Three new measures would make three major changes:
• Companies would no longer be able to remove themselves from an
anti-dumping order after having obtained zero duties for several years.
Under the new measures, they would be subject to annual administrative reviews.
• Instead of bonds, once a preliminary anti-dumping order is in place, companies
would have to post cash deposits to cover the expected costs of the duties!
• Instead of selecting the largest exporters for annual review, the new
measures propose random selection.
Earlier in the dumping case, it was the threat of picking companies at random that prompted them to make deals to pay the Southern Shrimp Alliance to prevent them from being challenged for new administrative reviews. Thus, the new rule would allow the same shake down of foreign exporters, who would be encouraged to pay USA trade groups to avoid the risk of being hit with a high duty set as a result of a random audit.
The proposals will be open for comment for several months. If enacted, they will open a new avenue for domestic producers to challenge shrimp and catfish exports from Vietnam and China.
Source: Seafood.com (an online, subscription-based, fisheries news service). Editor and Publisher, John Sackton (phone 1-781-861-1441, email email@example.com). US Dept of Commerce Proposes Drastic Tightening of Anti-Dumping Duty Rules. John Sackton. August 27, 2010.
Washington DC—Seafood Safety
Consumers are caught in the middle as food safety experts ponder the potential risks from shrimp, crab and fish from the Gulf of Mexico, while mostly ignoring the frightening evidence of years of foreign seafood arriving at USA ports tainted with drugs, chemicals and bacteria.
“Consumers are rightfully worried about problems with chicken eggs right now,” said Marianne Cufone, director of the fish program at Food and Water Watch. “They should be concerned about seafood, too.” The National Marine Fisheries Service says that 90 percent of the shrimp consumed in the USA is imported, mostly from China, Thailand, Ecuador, Indonesia, India, Mexico and Vietnam.
“About 80 percent of the seafood we eat...is imported, but less than two percent of those imports are actually inspected for contaminants like filth, antibiotics, chemicals and pathogens,” Cufone said.
The prevalence of harmful contaminants in some imported seafood is documented repeatedly in the small number of inspections that the Food and Drug Administration does make.
“If we can find the problem, we can keep it out of the country, out of our food chain, but finding it depends on the fairly thin net of FDA inspectors working the ports to catch the problems before they enter the country,” Mike Taylor, deputy commissioner for foods at the Food and Drug Administration, hired to rebuild FDA’s food safety program, said at a food safety conference in March 2010.
During the last administration, Democrats repeatedly raged over the failure of Republicans to pass what they called a “vital and life-saving food safety bill,” legislation that would give the FDA and other food safety agencies the laws and resources to protect America’s food supply. The current seafood safety bill has passed the House, but it has been languishing in the Senate for about a year. Many public health advocates and senators say they’re puzzled by Senate Majority Leader Harry Reid’s lack of action on the bill. He won’t even discuss it.
On August 25, 2010, FDA issued an “import alert”, which is like a hazard warning to its port inspectors, to detain shipments from specific companies until tests conducted by the importer indicate that their shipments meet FDA standards. The alert involved shipments from eight countries that were suspected of using unapproved drugs in farm-raised shrimp, frog legs, tilapia, basa and other seafood. China led the alert with violations from 15 companies out of the 40 cited for violations.
But often investigators can’t be sure where the fish actually originated. Import brokers often ship seafood from countries like China to other countries to avoid high import tariffs and intensified scrutiny for dangerous adulterants. For example, in one case, the USA Customs and Border Protection agency says millions of dollars of imported shrimp from Chinese producers were shipped through Indonesia to avoid paying steep anti-dumping duties.
Source: AOLNews.com. Imported Seafood May Be Riskier Than Gulf Fare. Andrew Schneider. August 26, 2010.
Ca Mau Banks on Seafood Exports
Based on projected production of 450,000 tons of fish and 170,000 tons of shrimp, the southernmost province of Ca Mau hopes to export $1 billion worth of seafood by 2015. The province will focus on industrial and organic shrimp farming and use advanced technology to ensure high output.
Freshwater prawns will be developed in the northern part of the province using models developed for farming shrimp and rice and for farming shrimp in the mangroves.
The province has 265,153 hectares devoted to shrimp farming, almost all of it extensive (263,713 hectares). Just 1,440 hectares are devoted to intensive ponds. The province hopes to increase its intensive shrimp farming area to 10,000 hectares by 2015. The average output from extensive ponds is only 350 kilograms per hectare, while the average output from intensive ponds reaches 5,000 kilograms per hectare.
The People’s Committee has issued a draft plan for the development of intensive shrimp farming zones in the province. Under the plan, each zone would have an area of more than 50 hectares. In places where there are geographical and area limitations, the zones would have an area of at least 30 hectares. Local officials have pledged to aid the development of the intensive shrimp farming zones.
Source: VietNamNews. Ca Mau Banks on Seafood Exports. August 25, 2010.
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