AQUACULTURAL SITUATIONAND 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

Auburn University

SRAOC SEPTEMBER 2002

WORLD FISHERIES2000

CHINA

PERU

JAPAN INDIAU.S.

5

10

15

20

25

30

35

MM

T

FAO

FISHERY EXPORTER2000

THAILAND

CHINANORWAY

U.S.

CANADA DENMARK

2

3

4

5

$ B

IL

FAO

FISHERY IMPORTER2000

JAPAN

U.S.

SPAIN FRANCEITALY

0

5

10

15

$ B

IL

FAO

WORLD SEAFOOD SUPPLY2000

WILD CATCH72%

AQUACULTURE28%

FAO

WORLD CAPTURE FISHERIES AND AQUACULTURE PRODUCTION

102030405060708090

90 91 92 93 94 95 96 97 98 99 '00

PER

CE

NT

AQUACULTURE CAPTURE FISHERIES

NMFS

WORLD AQUACULTURE2000

CHINA

INDIA

INDONESIA

JAPAN

THAILAND

BANGLADESH

VIETNAM

5

10

15

20

25

MM

T

FAO

U. S. SEAFOOD SUPPLY1999

AQUACULTURE9%WILD CATCH

27%

IMPORTS64%

NMFS

U. S. SEAFOOD SUPPLY2001

AQUACULTURE7%

WILD CATCH18%

IMPORTS75%

NMFS

FISH AND SHELLFISH1970 - 2001

PER CAPITA CONSUMPTION

11.712.1 12.4

15.0 15.0 14.915.6

14.8

10

11

12

13

14

15

16

70 75 80 85 90 95 '00 '01

# P

ER

CA

PIT

A

USDA

U. S. SEAFOOD CONSUMPTION

TUNA

SHRIMP

POLLOCK

SALMON

CATFISH

COD

CRABS

CLAMS

0.2

0.6

1.0

1.4

1.8

2.2

2.6

3.0

3.4

#/C

AP

ITA

1991 2001

NFI

2001 U. S. SEAFOOD CONSUMPTION

SHRIMP

TUNA

SALMON

POLLOCK

CATFISH

COD

CLAMS

CRABS

FLATFISH

TILAPIA0.2

0.6

1.0

1.4

1.8

2.2

2.6

3.0

3.4

#/C

AP

ITA

NFI

First Time Tilapia Made “Top Ten”

U.S.AquacultureProduction

Production States

NORTH CENTRALNORTH CENTRAL NORTHEASTERNNORTHEASTERN

SOUTHERNSOUTHERN

WESTERNWESTERN

TROPICAL & SUBTROPICALTROPICAL & SUBTROPICAL

PerchStriped BassTilapia

CatfishStriped BassTilapiaBaitfish

TroutSalmonShellfishStriped BassTilapia

Ornamental, Food and Shellfish

SalmonShellfishStriped Bass

Aquaculture Sales

U. S. AQUACULTURE VALUE2000

FRESHWATER85%

MARINE15%

NMFS

Sales by Aquaculture Category

• Food fish - 70%

• Mollusks - 9%

• Ornamental fish - 7%

• Baitfish - 4%

• Crustaceans - 4%

• Sport/Game - 1%

• Other animal aqua. - 5%

U. S. AQUACULTURE VALUE - 2000

CATFISH46%

TROUT7%

TILAPIA3%STRIPED BASS

3%

SALMON10%

CRAWFISH3%

BAITFISH5%

OTHER19%

OYSTERS4%NMFS

U.S.CatfishIndustry

CONSISTENT PRODUCT

CATFISH CONSUMPTION

2.3

2.9

5.6

4.4

0.91.4

0.80.9

2.42.0

3.7

0.5

0

10

20

30

40

50

TX IL CA LA TN AR FL MS AL MI MO GA

0

1

2

3

4

5

6

MIL # PER CAPITA

CATFISH SALES 2001

AL16%

OTH5%

AR15%

MS58%

LA6%

USDA

CATFISH ACREAGEAND NUMBER OF FARMS

987

1886

1249

507090

110130150170190210

1982 1992 2002500

1000

1500

2000

1000 AC FARMS

USDA

CATFISH ACREAGEAND OPERATION SIZE

8075

157

50

70

90

110

130

150

170

190

1982 1992 200260

85

110

135

160

1000 AC AC/FARM

USDA

CATFISH PRODUCTION AND INTENSITY

2981

1000

3755

0

100

200

300

400

500

600

700

1981 1991 200105001000150020002500300035004000

MIL # #/AC

USDA

CATFISH PRICES1970 - 2002

3035404550556065707580

70 75 80 85 90 95 '00 '01 '02(p)

CE

NT

S/L

B

USDA and Crews

CATFISH PRICES1970 - 2002

32

42

52

62

72

82

92

70 75 80 85 90 95 '00 '01 '02(p)

CE

NT

S/L

B

FARM REAL

USDA (82-84 real base)

There is a strong seasonal aspect to pricing as seen in the 5, 10 and 25-year averageprice received curves above. However, the norm was not followed in 2001.

CATFISH PRICE PAID TO PRODUCERS

55

60

65

70

75

80

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2001

25 YR AVG

10 YR AVG

5 YR AVG

55

60

65

70

75

80

Jan

Feb

Mar

Ap

r

May

Jun

Jul

Au

g

Sep Oct

No

v

Dec

$/lb

Catfish Price Paid to Producer

2001 price

2000 price

$.10 + per lb lessthan 2000 = -14%

50

55

60

65

70

Jan

Feb

Mar

Ap

r

May

Jun

Jul

Au

g

Sep Oct

No

v

Dec

$/lb

Catfish Price Paid to Producer

2001 price

2002 price

$.11 + per lb lessthan 2001 = -17%

Catfish Product Form Sales

21%

62%

17%

Whole fishFilletsOther

The catfish fillet product form is preferred over other product forms (whole fish, steaks, nuggets).

Fresh and Frozen Catfish Products

50,000

100,000

150,000

200,000

250,000

300,000

350,000

86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01

1,00

0s o

f Lbs

.

Fresh Frozen Total

Over the last 15 years, there has been an ever widening production difference betweenfrozen and fresh catfish products. Frozen catfish products are in higher demand now thanever before with 60% of all catfish products being frozen.

Source: USDA Economics and Statistics System, NASS

U.S. Catfish Fillet Processing

0

50,000

100,000

150,000

200,000

86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01

1,00

0s o

f Lbs

.

Fresh Frozen Total

Over the years, frozen catfish fillets had increasingly demanded over fresh fillets.

Imports of “Catfish” to U.S.

02,0004,0006,0008,000

10,000

12,00014,00016,00018,00020,000

1,00

0s lb

.

1996 1997 1998 1999 2000 2001

119%

139%

149%

IMPORTS - COUNTRY OF ORIGIN

0

10

20

30

40

50

60

70

80

90

100

95 96 97 98 99 00 01

VIETNAM BRAZIL OTHER

IMPORTS VS U.S. FROZEN FILLET SUPPLY

02468

10121416

95 96 97 98 99 00 01

PERC

ENT

VIETNAM IMPORTS VS FARMER PRICES

0

2

4

6

8

10

12

14

95 96 97 98 99 00 01 6/02

% O

F U

S F

RO

ZE

N F

ILL

ET

SU

PP

LY

55

60

65

70

75

80

85

FA

RM

ER

PR

ICE

S (

CE

NT

S/L

B)

FROZEN FILLETS FARMER PRICE

Industry Response to Imports• Legislation

– “Country of Origin” labeling - MS, LA ?

– Removal of Channel Catfish images on import packaging - NO

– Seek to have ‘Catfish’ name removed from non-Ictalurid fish species - 1 YEAR BAN, U.S.

• Advertising– Concentrate US safety/health standards - CHEMICALS ?

– Imports are trying to mislead consumers - TCI

• Legal– Anti-dumping case-CFA PASS THE FIRST HURDLE

Shrimp/Crawfish Industry - EVALUATING

U.S. OR VIETNAM?

What’s Causing Low Catfish Prices?

• Increased Vietnamese frozen fillet imports

• Economic uncertainty

• Stagnant per capita consumption

• On-farm inventories up

• Processing capacity (up)

U.S. CATFISH INVENTORYJULY 1, 2002 vs 2001

10

11

12

13

14

%

FOODFISH STOCKERS FINGERLINGS

CATFISH FEED SALES(32 % PROTEIN)

500

600

700

800

900

94 95 96 97 98 99 '00 '01 '02(p)

1000

'S T

ON

TCI and Crews

U.S. Catfish Round Weight Processed

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

1,00

0s o

f lbs

87 88 89 90 91 92 93 94 95 96 97 98 99 '00

'01

'02(

p)

* Round-weight process has be flat for the last 3 years.

Source: USDA Economics and Statistics System, NASS and Crews

4 %

Total Producer Catfish Sales

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

1,00

0s o

f Dol

lars

87 88 89 90 91 92 93 94 95 96 97 98 99 '00

'01

'02(

p)

Total 2002 producer sales (processed) down $35 million from 2001, down $94million from 2000.

Source: USDA Economics and Statistics System, NASS and Crews

- 9 %

Total Processor Catfish Sales

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

1,00

0s o

f Dol

lars

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

'02(

p)

Total 2002 processor sales down $21 million from 2001.

Source: USDA Economics and Statistics System, NASS and Crews

- 3 %

US Catfish Fillet Pricethat the Processor Receives 2000 - 2002

FRESH FROZEN

2.30

2.40

2.50

2.60

2.70

2.80

2.90

1 2 3 4 5 6 7 8 9 10 11 12

2000 2001 2002

2.30

2.40

2.50

2.60

2.70

2.80

2.90

1 2 3 4 5 6 7 8 9 10 11 12

2000 2001 2002

PRODUCER’S EFFICIENCY

• Processors requiring increased fish size• 1980’s => 1.00 - 1.25 lb average weight• 1990’s => 1.25 - 1.50 lb average weight• 2000’s => 1.50 - 2.00+ lb average weight

• Larger fish require longer production cycle• From 24 months to 36 months (from spawn to skillet)

– increased production risks– increases production costs

Growing Larger Catfish7,000 Stocking Rate; 6 in Fingerlings

Item Unit 1.50 # 2.00 # Dif

Growth Time Month 15.35 19.33 4.98

Death Loss % 31 39 8

Production Lb/Ac/Yr 5690 5333 357

FCR # Feed/# Gain 2.25 2.61 0.36

VC $/Lb 49.03 54.38 5.35

TC $/Lb 62.23 68.46 6.23

CATFISH FEED PRICES(32 % PROTEIN)

150

175

200

225

250

275

94 95 96 97 98 99 '00 '01 '02(p) '03(p)

$/T

ON

MS

Cash Costs for a 250 Acre Catfish Farm Stocking 7,500 5" Fish Per Year

-1,200

-1,000

-800

-600

-400

-200

0

200

400

600

190 200 210 220 230 240 250 260 270 280 290 300 310

Feed price per ton

Inco

me

Abo

ve V

aria

ble

Cos

ts

75 cents/lb

Fish Price

55 cents/lb

60 cents/lb

65 cents/lb

70 cents/lb

Lower Prices and Net Returns• The cost to produce U.S. farm-raised catfish

is in the range of $0.60 - $0.75 / lb

• At the Present Price of $0.50 - 0.60 / lb:– Less efficient farmers will:

• Lose money• May not cover cash and capital costs• Go “belly up”

– More efficient farmers will:• Receive a lower profit• May not cover all variable costs• Can stay in business in the short-run

GROWTH IN THE U. S.

• EXPECTED TO CONTINUE, AT A SLOWER PACE• BECOMING MORE EFFICIENT

PRODUCERS AND PROCESSORS

• ALLIANCE/CONSOLIDATION PRODUCER/PROCESSOR/FEEDMILL/GENETICS

• U. S. HAS COMPARATIVE ADVANTAGE INDEPENDENT PRODUCERS/PROCESSORS FEED GRAINS INFRASTRUCTURE MARKETS

ONE BILLION POUNDS BY 2010 ??????????

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

Auburn University

SRAOC SEPTEMBER 2002