Gulf/South Atlantic Shrimp

Fuel costs recede, dock prices rise as consumers turn to affordable shellfish

For the first time in years there is some good news for the hardcore remnant of the American shrimp industry that has survived absurd prices, ruinous fuel costs and devastating hurricanes.

Shrimp prices have increased a bit in some locations. More importantly, diesel fuel prices, at $2.30 or less in Florida in late October, are half what they were a few months back.

A downshift in domestic shrimp's market position may allow for steady sales compared to more expensive seafood, despite the global economic tsunami and the continuing flood of inexpensive imports.

"Shrimp has become hamburger," says Mayport, Fla., shrimper Gerald Pack. "It isn't on the plateau it used to be."

On Florida's Atlantic coast, harvests have been very good the past few months, Pack says, in part because of attrition in the fleet, which, in greatly diminished numbers, has found itself in de facto self-regulation. Trawlers don't have to steam as far now. Most of the white shrimp landed in Mayport this fall came from within 10 miles of the coast, Pack says.

"We have such a small amount of boats compared to what we used to have," he says.

That fleet reduction trend will likely continue in the aftermath of the two major gulf hurricanes — Gustav and Ike — of the 2008 season. Both nailed the central Gulf Coast.

Gustav hit Louisiana directly, a bit west of Katrina's landfall three years earlier. But Ike, which made landfall at Galveston, Texas, caused severe damage in both states, too.

In Louisiana, there was extensive silting and debris on the shrimp grounds, according to a report from the Louisiana Department of Wildlife and Fisheries.

"Large storm surges displaced both manmade and marsh debris into open-water areas... creating challenges for shrimp harvesters and others navigating or fishing in these areas," the department reports.

The storms' toll on Texas was worse. Some waterfront areas in Galveston suffered severe damage, says Lance Robinson, regional director for the Texas Parks and Wildlife Department's Coastal Fisheries Division. Robinson says the storm affected more than half of Texas' 1,654 licensed bay and gulf shrimp vessels.

Nick Gutierrez, a fisherman whose father, Keith "Buddy" Guindon, owns Katie's Seafood Market at Galveston's historic Pier 19 shrimp docks, says Katie's was badly damaged. The market lost a wall, a walk-in cooler and all its contents, plus loss of power, ice, fuel, water and telephone services.

In the first week in November, a fuel dock was back in operation at Pier 19. However, fishermen still had to travel to Freeport to buy ice.

"We've been back here a couple of weeks now... doing the bare necessities," Gutierrez says. "At first we just unloaded here with a scale and hooked up a generator."

The shrimp fleet is at least able to function now, he says.

"They're doing pretty good," he says. "A lot of them come over from [Port] Boliver."

Shrimp prices have been generally higher than they were a year ago in the Gulf of Mexico.

During the first week in November, Gutierrez says, 31-35 count heads-on shrimp were bringing $1.40 a pound ex-vessel in Galveston. The average price for 31-35 count shrimp gulfwide was $1.45 in late October, according to NMFS' weekly price update out of New Orleans. A year earlier, the NMFS price report says, the ex-vessel price for the same count shrimp was $1.

On Florida's Atlantic coast, prices also have been higher than they were a year ago.

Sherri McCoy, co-owner of Cape Canaveral Shrimp Co., reported an ex-vessel price of $1.45 for 21-25 count heads-on shrimp in early November, by which time ex-vessel prices had declined from recent highs. The $1.45 price she quoted was a bit less than the gulfwide price in late October of $1.70 to $1.85 but was still substantially better than the gulfwide price of $1.15 that NMFS reported a year earlier. Diesel fuel at the cape had dropped to about $2.25, McCoy says.

Up the coast in Mayport, Pack says prices also were pretty decent, at $4 for 21-25 count heads-off shrimp.

Because of the abundance of shrimp, Pack says his focus is marketing.

"We're looking right now for sales rather than big hoppers," he says.

Pack adds he's expecting a decent holiday season.

"Traditionally as it gets closer to the holidays, people step up to the counter." — Hoyt Childers

Northeast Blue Crab

Stock decline triggers Virginia closure,
lawsuit to reduce bay's nitrogen levels

Another decline in Chesapeake Bay blue crab stocks resulted in a one-third reduction to the 2009 harvest of female crabs, a decision by Virginia to close down its winter dredge fishery, and a baywide revolt among watermen and environmental activists, who are suing the U.S. Environmental Protection Agency to enforce nitrogen reduction goals set in a 2000 interstate compact.

"It's going to affect 53 boats, 13 or 14 of them on Tangier Island. Those people have absolutely nothing to do in the winter without crab dredging," says Robert Hollowell, captain of the Norfolk-based dredge boat Ella-K, and lead plaintiff in a lawsuit to overturn the Virginia Marine Resources Commission's move to end dredging.

They won't be dredging crabs, but those 53 boats have another opportunity: Fishing out lost crab traps and other marine debris, using Virginia's share of $20 million in federal disaster aid to offset the 2008 collapse of the soft-shell and peeler crab industry.

"They are the main focus at the moment," says John Bull, a spokesman for the Virginia commission, who says dredgers will be paid around $300 a day plus fuel costs for the work. In late November a scramble was on to have the Virginia Institute of Marine Science train crabbers to use side-scan sonar to help clean up the bay bottom, Bull says.

"We didn't ask for that," Hollowell says. "We just want to work."

The dredge ruling brewed as biologists reported fewer female crabs bedding down in the lower Chesapeake.

"We knew that was coming. It's not easy for the watermen who rely on it," says Doug Lipton, an associate professor with the University of Maryland Sea Grant program and an expert on blue crab economics.

"It's premature to say what the 2009 regulations will be, but it's going to spread out the hurt a little more," predicts Larry Simns, president of the Maryland Watermen's Association. Fewer crabs will be taken throughout the year, rather than simply cutting off the season's end, he says.

"It was terrible this past summer," with generally mediocre catches and high fuel costs, Simns says. The market held to familiar patterns: peaks that exceeded $150 retail a bushel and $3 for a big jimmy (male crab) in some places, while $65 a bushel was a good price to watermen.

There's interest in Maryland of using disaster assistance money to start a rights-based, limited access crab fishery that Lipton, University of Maryland fisheries professor Thomas Miller, and resident scholar Leonard Shabman with the environmental policy group Resources for the Future proposed last summer in a Washington Post essay.

It would be a shallow-water variation of the individual transferable quota system first used in the Mid-Atlantic surf clam fishery. "The sticking point for these systems is always the initial allocations," with documentation and disputes over each fisherman's catch history, Lipton says.

With assigned shares of the crab resource, watermen could choose the time and place of fishing effort to take advantage of best prices, the theory goes. "Some people say this is going to hurt the processors," Lipton says. "But if everyone went to the summer basket trade [live crabs to retail] those prices would not hold up."

"It just doesn't work for us," Simns says flatly. "We don't work more than three months in any one fishery." Longtime watermen who did less crabbing only because of conditions now could be penalized when allocations are set, he says.

A baywide winter dredge survey used since 2006 found only a
slight uptick in recruitment, continuing a decade-long trend that led authorities to design new regulations for a 34 percent reduction of female crab catches. Based on sampling, biologists estimated the spawning crab population has declined again to 120 million animals.

That's far below an interim rebuilding target of 200 million 1-year-old-plus crabs, which Chesapeake Bay stock assessors adopted in early 2008.

In September the federal government declared an economic disaster in the bay's soft-shell and peeler crab fishery, heightening a sense of crisis. In late October the Chesapeake Bay Foundation, the Maryland and Virginia watermen's associations and other parties filed a notice of action saying they will demand the EPA act decisively to start reducing nutrient pollution in the bay by a 2010 deadline that was set by federal-interstate agreement in 2000.

"Now they want to stretch it out 10 more years," Simns says. Faced with protests, the Chesapeake Executive Council promised to hold a review of pollution levels in spring 2009. — Kirk Moore

North Pacific Urchins

Open quota and surging prices should entice harvesters to dive into fishery

Stronger ex-vessel prices, a healthy quota and the effects of an expanding sea otter population set the stage for a nearly extinct fleet of urchin divers in Southeast Alaska this year.

The quota for the 2008-09 season has been set at 5.44 million pounds, which is slightly less than in years past. But if ex-vessel prices keep climbing, wallets could thicken for divers intrepid enough to contend with cold water and stiff currents near the capes.

While urchin guideline harvest levels have remained fairly steady in recent years, the actual harvests have dwindled, as fewer divers have been participating in the fishery. Much of the disinterest lies with declining ex-vessel prices.

The fishery posted a GHL of 5.1 million pounds and an average ex-vessel price of 33 cents per pound during the 2003-04 season. That season, divers harvested 2.8 million pounds, slightly more than half the quota.

During the 2004-05 season, the Alaska Department of Fish and Game prescribed a GHL of 5.5 million pounds, prices fell to 28 cents per pound and divers harvested 1.8 million pounds. Even though prices climbed to 31 cents per pound for the 2005-06 season, divers harvested little more than 1 million pounds of a 5.75 million-pound GHL.

In the 2006-07 season, divers worked on a GHL of 5.6 million pounds, landed only 620,000 pounds and received 30 cents for their urchins.

"Our urchin fishery is moving along pretty slowly," says Bill Davidson, Southeast Alaska management coordinator with Fish and Game, in Sitka. "We're only at around $200,000 per year in ex-vessel value for the whole fishery."

The number of participating divers, meanwhile, has decreased steadily from 40 in the '03-04 fishery to 31 during the '04-05 season, 17 in '05-06 and 11 during the '06-07 season. Last season only 10 divers donned their suits and took the plunge.

The GHL for the '07-08 season, which ended on Sept. 30, was again set at 5.6 million pounds, and divers landed just shy of 660,000 pounds. Among possible reasons for the increased landings last year is that ex-vessel prices rose to 36 cents per pound.

With only one urchin processor on the grounds, confidentiality issues keep information about ex-vessel gains scant. However, it appears Russian urchin products shipped to Japan have decreased in volume.

The Russian urchin products, which mainly come to Japan through an illegal, unreported, unregulated fishery, have slugged markets and crimped demand for product from urchin industries in Alaska, British Columbia and the West Coast.

According to a 2006 study commissioned by the British Columbia Seafood Alliance, "Benchmarked Competitiveness Study of BC's Sea Urchin Fisheries," Russian volumes of illegal green urchin products — a competitor to red sea urchin products — shipped to Japan reached more than 10,500 metric tons in 2005, the roe of which was fetching only $6.98 Canadian per kilo. Meanwhile, the respective prices for Canadian, Alaskan and U.S. West Coast red sea urchin roe cost $23.89 per kilo, $11.52 per kilo and around $26 per kilo.

Russian volumes may be diminishing, but they will continue to be the bane of ex-vessel prices.

"I think that they've seen a little less product on the market from Russia," says Phil Doherty, executive director of the Southeast Alaska Regional Dive Fisheries Association, in Ketchikan. "But that fishery is still a problem."

In mid-November — about a month and a half into the 2008-09 season — divers were still concentrating their efforts on the more lucrative geoduck and sea cucumber seasons. It remained to be seen whether the optimistic ex-vessel prices would draw more divers to the water in search of urchins.

With an abbreviated fleet and rising prices, the short-term health of the fishery appears to be on the mend. In the long run however, the threat of a large sea otter population could dampen the GHLs.

Through the years, informal studies by commercial divers and divers conducting urchin population surveys with Fish and Game have noted that otters have been spreading into new areas and picking off the easy forage species, which more often than not includes urchins.

"As the otters continue to expand into new areas, what's noticeable is how fast the ice-cream species disappear," says Davidson, adding that the otters are also quick to scarf up abalone, geoducks, and sea cucumbers. "There's a lot of [urchin] volume here now, but we expect that the population is going to shrink with the predation by otters." — Charlie Ess

Pacific Pink Shrimp

Dicey economic issues cloud forecast
for 2009 after strong campaign in '08

Pink shrimp fishermen and processors had a roller coaster ride over the summer. The 2009 season is anybody's guess, they say, but the major influence will be the same thing affecting everyone: the economy.

The 2008 season started off a little slow in April but picked up. It was the best season on record, with a preliminary total of 33.5 million pounds, since 2002, when 55.8 million pounds were delivered.

"Quite a few guys had a million pounds for the year," says Brad Pettinger, director of the Oregon Trawl Commission. That's a good season. At between 50 and 60 cents a pound, that's a gross of at least a half million dollars.

"They made a fortune," says Scott Adams, Hallmark Fisheries' production manager, from his Charleston, Ore., office. "And it's great shrimp."

Fishermen said the shrimp were pretty good sized, with most of it in the 250-count and up. In years past, much of the landings have been the smaller sizes, to the 350- and 500-count-a-pound range.

Processors, though, had a tough decision as the end of the season neared in October: Sell everything or save some in the freezer for sales during the winter? And if so, how much?

A big inventory turned out to be a huge mistake — even though most processors had just that. Nobody predicted the economy's crash.

"Just roll it into the stock market," Adams says. "If you owned it in October and the season ended, you took a loss — just like that."

And processors, as of December, still have a lot of inventory, Pettinger says.

"People are still buying it, but not a lot," Adams says. "And it's the most affordable protein out there."

The stock market's fall and continuing worries about the national and global economy prompted many businesses to tighten their spending. Several seafood items, such as Dungeness crab, lobster or king crab, wh
ich are perceived as luxury items, are moving slowly.

Pink shrimp, though, stands a better chance.

"It's a great value," Pettinger says. "You'd think it would move pretty well. In general, it's fairly reasonably priced."

Two factors played into the success of the season — at least, in the early part of it — for shrimpers and processors: sales to Europe and a good market for groundfish.

Ex-vessel prices for blackcod and other groundfish remained stable through most of the summer, Adams says. Consequently, more trawlers stayed with fishing instead of switching to shrimp. Less shrimp hitting the docks kept the shrimp price up.

"The European market helped raise the price for the boats," Adams says of blackcod. "Domestic publicity in sales this year also helped."

Europeans weren't interested only in blackcod, though. They wanted shrimp — Canadian shrimp.

The Marine Stewardship Council certified the U.S. West Coast pink shrimp fishery as sustainable in December 2007. But certification hasn't really helped sales so far.

Yet, when Atlantic Canada's shrimp fishery also was certified in late summer 2008, the result was more sales to Europe, where businesses and residents are more concerned with certified and sustainable products. That left a hole in the domestic sales for West Coast shrimp to fill, Pettinger says.

"I don't know if we've gotten much out of that," he says of the certification, but as more species become MSC-certified, that could change. Canadian shrimp may be preferred more in Europe because the exported West Coast shrimp is subject to high tariffs that make it tougher to compete with the Canadian product.

The West Coast fishery holds the honor of being the first shrimp fishery to be certified. Pacific whiting is expected to be certified. The region's groundfish industry is looking into it, too.

That kind of notoriety, led by shrimp, may not pay off in domestic sales, but it could pay off in publicity.

"It could be a powerful thing in the marine reserve debate," Pettinger says. Environmental groups say Oregon's ocean is in trouble and that a network of marine reserves could help get it back on track to being a healthy ecosystem. Oregon fishermen say the ocean already is healthy.

Still, what is in store for this year is up in the air. Will the economy turn around by the start of the shrimp season in April? Will diesel prices keep falling? Will processors be able to sell their inventory and pay fishermen more than 50 cents a pound?

Pettinger hopes shrimp's reasonable price will help. After all, fishermen were paid higher ex-vessel prices 20 years ago than they have been in the past decade.

"Seafood is holding its own; I hope it stays that way," he says. "Shrimp is not a high-dollar seafood item." — Susan Chambers

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