Gulf/South Atlantic Shrimp

Fuel costs, static dock prices will chill winter landings of thinned gulf fleet

With fuel costs that make last year's $2 a gallon seem like the good old days and shrimp prices stagnant, the winter shrimp harvest is likely to be modest regardless of shrimp abundance.

"Now we're at $2.70," says Ernie Anderson, president of the Organized Seafood Association of Alabama and owner of Graham Shrimp Co. in Bayou La Batre, Ala. "We're looking at a winter production that will probably be reduced because of the fuel."

"This winter will be stressed because of the price of fuel," he says. "It won't add up for this winter."

Anderson says he doesn't expect to see much activity unless the diesel fuel price drops back to the $2 to $2.10 range.

In Biloxi, Miss., bad weather and high fuel prices combined to make a poor bay shrimp season for inshore shrimper Ronald J. Baker.

"There's not a lot going on," he says. "White shrimp was awful. Seems like every night it just blew. With the weather, I've never seen an October like this year; it was a real bummer for me. October is usually our best weather. That last front a week or so ago was enough to move them big shrimp out into the gulf."

Baker is one of the surviving Gulf Coast shrimpers who's found a way to get a bit more for his shrimp. Rather than selling to a processor, he has found a niche market that boosts his profit margin a bit.

"I sell it to a little market, and it gives me a few nickels more," he says.

But it costs Baker more than $1,300 to fill the 500-gallon diesel tank on his 40-foot single-rigged Biloxi lugger King Arthur, one of the last of its kind still working.

"Last time I got it was [at] $2.70 a gallon," he says. "It hurts when you fill it up."

On Florida's east coast, rock shrimp, the specialty of Cape Canaveral Shrimp Co. in Port Canaveral, never really showed up in a generally disappointing season.

"It hasn't been much of one so far," says co-owner Mike Merrifield. The business had to depend largely on penaeid — brown, white and pink — shrimp this year.

Diesel fuel prices have reached the critical stage for the shrimp boat owners, says Sherri McCoy, manager and co-owner of Cape Canaveral Shrimp Co.

At "almost $2.75 a gallon, the price of fuel is killing them," she says.

Overall, shrimp prices are doing little to offset high fuel costs. Brown shrimp brought $1.80 a pound ex-vessel on average in 2007 compared to $1.70 in 2006, according to preliminary Florida Fish and Wildlife Research Institute data. Pinks fell to $1.98 from $2.07 in 2006. Whites alone showed a significant increase to $2.57 in 2007 from $2.17 in 2006.

Anderson, who is heavily involved in the Wild American Shrimp campaign in Alabama, says he believes consumers are beginning to be more aware of the origins of their shrimp. He is beginning to see price improvement for some sizes. Fuel prices are the real problem now.

"The vessels I'm unloading, the only negatives we have is the fuel," he says.

For the vessels remaining in the shrunken Gulf of Mexico shrimp fleet, the quest for efficiency is the new priority.

"A lot of boats have improvised," he says, towing smaller nets, for example, or otherwise looking for ways to conserve fuel.

Overall, effort in the gulf shrimp fishery has plummeted in recent years, partly thanks to losses from the Hurricane Katrina catastrophe in 2005 and partly from continuing economic attrition. Looking ahead, the surviving shrimp fleet's future is intricately tied to red snapper management and Gulf of Mexico politics.

The good news accompanying drastic fleet shrinkage is that overall effort has already dropped so much that the last-resort time and area shrimp closures authorized in new joint shrimp/reef fish management measures to cut red snapper bycatch may not be necessary.

Steve Atran, a population dynamics statistician with the Gulf of Mexico Fishery Management Council, confirms this possibility.

The 2032 red snapper maximum sustainable yield target "requires a 74 percent reduction in mortality across the board," Atran wrote in an e-mail. "It is possible that the shrimp trawl bycatch may have achieved this reduction through a combination of bycatch reduction devices and declines in effort due to the economic situation for the shrimp fishery and the effects of recent hurricanes."

If not, NMFS could implement the time and area closures in 2008. — Hoyt Childers

Northeast Blue Crab

Hope for recovery in Chesapeake Bay
looks shaky after dismal 2007 harvest

With a 2007 Chesapeake Bay blue crab harvest looking like one of the worst in 62 years, fishermen and biologists have lost some hope that a gradual recovery is under way.

Instead the bay's crab population dropped to an estimated 273 million last year after a couple of years of very modest increases. It's a long drop from the 800 million-plus numbers estimated in the early 1990s, and the lowest point in recent years since 2001, according to the latest report from the Chesapeake Bay blue crab scientific advisory committee.

Some better numbers of 1-year-plus age crabs seen in winter trawl samples had offered hope for improvement. Now an observed decline in winter 2006-07 shows a "situation that really hasn't changed at all in the last five years," says Lynn Fegley, Maryland's chief crab biologist and advisory committee chairwoman.

"Because crab abundance is driven by those young crabs, it drags down the total abundance," Fegley says. "We could see the problem compounding if we don't get good recruitment when we go out in a couple of weeks and start our 2007-2008 winter survey."

In some Virginia waters, those numbers "were even worse in the [Virginia Institute of Marine Science] trawl survey," says Rob O'Reilly, the state Marine Resources Commission's deputy director.

"At least in Virginia, effort is responding to low abundance," O'Reilly says. "Only about 45 percent of active fishermen are using their licenses."

Another year of scarcity kept the summer's typical crab prices around $70 a bushel until demand dropped off in September, says Jim Jacquette Jr. of the Kent County Watermen's Association.

"Because of the dry season, the crabs went right for the brackish water," Jacquette says. Watermen fished far north in the Chesapeake, to the edge of the regulatory crab pot lines at the Susquehanna River mouth and Chesapeake & Delaware Canal, "and guys who could go up there did real well," Jacquette says.

"We've had very scarce seasons in recent years... It's been a typical year, compared to past years," says Doug Lipton, a University of Maryland professor and economist. While the short crab supply generally keeps prices up, that varies by area according to local conditions and crab quality, he adds.

Meanwhile, processors have "adapted to a low abundance of crabs. They're bringing in product from North Carolina and the Gulf of Mexico," Lipton says. This winter processors are more concerned with their perennial problem of obtaining enough H2B work visas for a picking workforce now drawn mostly from Mexico.

"They're doing everything they can politically to influence the situation," Lipton says.

Blue crab populations are notoriously prone to sharp peaks and valleys in response to environmental conditions. Besides Chesapeake Bay's pernicious problems of nutrient over-enrichment and sea grass losses, 2007 brought unusual weather with a cool spring and summer drought.

Landings for 2007 are likely to mirror the 2006 catch, the advisory group reports. They calculate watermen will have taken more than 53 percent of the crabs available in the bay, above the mark set to define overfishing.

That fact in itself isn't shocking — the predicted overfishing numbers have been exceeded in recent years without big consequences. The real problem, biologists say, is poor recruitment; 2006 saw the second-lowest reproduction rate observed since comprehensive surv
eys began in 1989.

Numbers of crabs aged one year and under in the winter 2006-07 dredge survey were near a 15-year low. That puts the overfishing prediction in a different light, and could bring more pressure for new management measures.

A big showing of crabs in this winter's trawls would cheer up biologists and fishermen.

"But now we really want to hold the reins," Fegley cautions.

If recruitment numbers are bad again this winter, Maryland regulators will be prepared for new fishing restrictions in late 2008 "if we get that trigger," she says, and the situation will be apparent when dredge results are compiled in early April.

"The triggers will apply on a bay-wide basis," O'Reilly says. Management measures would vary according to areas of the bay. Virginia regulators will need to act in February to be ready for the early opening of their season March 17, he says.

Jacquette anticipates watermen will be told to cut back: "I'm pretty sure something will happen next year."

Meanwhile, he says, the suburbanization of the bay watershed continues, with more storm water drainage.

"It makes you wonder what's wrong with the water," he adds. "Every year it gets worse — more dead water." — Kirk Moore

North Pacific Sea Cucumbers

Wild product's versatility could push
price beyond $2 for Alaska dive fleet

Ex-vessel prices surpassed the $2 per pound mark for Alaska's sea cucumber dive fishery in 2006-07, reversing a declining trend seen in recent years, though production at cuke farms in China could keep offerings there. Then again, as the higher nutritional value of Alaska cuke skins wins favor in markets throughout Asia, prices may again begin climbing.

Divers in the 2006-07 season received near record ex-vessel prices of $2.25 per pound in November, according to Alaska Department of Fish and Game data. Prices have been bolstered by sales of the cukes' longitudinal muscle flesh, which is exported to Japan. The skins of the cukes wind up primarily in China, with remaining quantities trickling into Korea.

The recent season's prices are the best seen since reaching an apex of $2.28 per pound during the 2003-04 season. Since then, ex-vessel offers and harvest volumes have declined.

In recent years, the industry has exceeded guideline harvest levels fishery managers have set forth. But smaller harvests and lower ex-vessel prices have held revenues lower for the fleet of about 50 divers.

During the 2002-03 season, the guideline harvest level was set at 1.57 million pounds while divers harvested more than 1.64 million pounds. Prices that season were relatively lower at $1.63 per pound, netting divers revenues of $2.67 million.

In the 2003-04 season, with a guideline harvest level of 1.64 million pounds, divers landed 1.86 million pounds and prices of $2.28 combined to make record revenues of $4.24 million. A harvest of 1.37 million pounds worth $2.97 million tracked closely on a quota of 1.38 million pounds during the 2004-05 season, and ex-vessel prices stayed relatively strong at $2.17 per pound.

Prices dropped to $2 per pound during the 2005-06 season with a harvest of 1.43 million pounds worth $2.86 million on a guideline harvest level of 1.48 million pounds.

As for the economic forces holding ex-vessel prices in check, China's farmed sea cucumber ventures have been producing skins in appreciable volumes for sale in local markets, which spares those distributors the shipping costs associated with deliveries of Alaska product.

"Over in China they do sea cuke farming," says Phil Doherty, executive director of the Southeast Alaska Regional Dive Fisheries Association.

Doherty recently went to China where he observed massive ponds that produce cukes for local markets.

"They have artificial upland ponds of up to 1,000 acres," he says.

Proximity to local markets aside, an advantage Alaska product has over the Asian cukes is size. According to Doherty and others, the average harvest weight of 219 grams (7.7 ounces) per sea cucumber (drained of water), makes Alaska cukes large enough to produce both meats and skins.

The industry's rotational harvest strategy mandates harvesting from a particular cuke bed every third year. Giving the beds a two-year break seems to substantiate the premise that the cukes left there grow to a greater size.

But samples from dive surveys in beds used as control areas where there is no harvest are no larger. That suggests that the secret to Alaska's large cukes lies with genetics.

"There's really no correlation between the three-year harvest cycle and size," says Bo Meredith, assistant area management biologist for the Alaska Department of Fish and Game's Ketchikan office.

Meredith adds that he has been in conversation with mariculture experts from Newfoundland who are interested in introducing genetic material from Alaska's Cucumaria frondosa japonica with their populations of Cucumaria frondosa.

In addition to the Canadian interest, Meredith says he's fielded inquiries to send samples to California marketers who want to quantify the japonica's nutritional advantages over other species marketed in Asia.

While studies from Asia are forthcoming, the industry is still assessing itself 5 percent of its dockside deliveries and has built up coffers of around $150,000 for research, funding for the Southeast dive association, marketing research or myriad other projects that might benefit divers.

An item of recent discussion has been the possibility of a sea cucumber enhancement project. Questions loom, however, about survival rates of the cukes in their transit from the grounds to the hatchery, survival rates while they're in the hatchery and their ability to produce young for reintroduction to areas of suitable habitat.

"Those type of discussions are pretty far down the road," Doherty says. "But the sea cucumber guys have money in their budget to begin thinking about these things." — Charlie Ess

Pacific Shrimp

MSC label, shift in Canadian exports fuel optimism for higher prices in '08

West Coast shrimpers should enjoy healthy recruitment of young stock into the fishery, plus new status under the recently awarded certificate of sustainability by the Marine Stewardship Council. And with Canada shipping more of its cold-water shrimp to Europe, ex-vessel prices should rise higher as the 2008 season unfolds on April 1.

Final touches in the MSC certification process passed uneventfully at the end of 2007. The sustainability rating will take effect shortly after the new year.

"There's nothing that can stop us now," says Brad Pettinger, director of the Oregon Trawl Commission in Brookings, Ore. "We'll be the first MSC-certified shrimp fishery in the world."

It's hoped the sustainability certificate will power public perception and compel consumers to buy the West Coast shrimp through specialty niche markets, according to Pettinger. As for when that will translate to higher ex-vessel prices, time will tell.

"We do about 2 percent of the world's landings," says Pettinger, adding that Oregon's relatively small catch caters to specialty markets. "So, realistically we're going to find out what MSC certification is worth."

Oregon trawlers in the 2007 season saw ex-vessel prices of 47 cents per pound, according to Pacific Coast Fisheries Information Network data. That was a dime per pound higher than the 2006 dockside offers of 37 cents. Ex-vessel prices in 2005 neared 44 cents per pound, up from 39 cents in 2004 and the 25 cents per pound the fleet saw in 2003.

The 2007 prices were bolster
ed by the exportation of East Coast Canadian cold-water Pandalus borealis shrimp to Europe instead of to the United States, where they compete with U.S. West Coast harvests of the smaller, younger Pandalus jordani, Pettinger says.

"Europe is low on the amount of shrimp they can use," agrees Scott Adams, manager of Hallmark Fisheries, in Charleston, Ore. "And they're trying to purchase it any way that they can."

That's fostering healthier sales for processors.

"It's actually a stronger market than we've seen in years," Adams says.

It's difficult to pin down trade volumes of Canada's exports to Europe. But Canadian exports of various shrimp products to the United States declined by about 9.5 percent last year, according to Globefish, an international market and data service of the Food and Agriculture Organization of the United Nations.

Data in a recent Globefish international market report notes that exports from Canada to the United States from January to September of 2006 hovered at 5,391 metric tons worth $38.7 million. But in 2007 those numbers fell to 4,879 metric tons worth $35.7 million.

U.S. foreign trade data from NMFS, meanwhile, shows that since 2004, U.S. imports of Canadian peeled frozen shrimp or other frozen shrimp preparations have declined from 5.16 million pounds and 10.81 million pounds, respectively, to 2.30 million pounds and 8.91 million pounds in 2006.

With import volumes hovering at 1.81 million pounds of peeled frozen product and 7.96 million pounds of other frozen shrimp preparations, as of September the data suggests a continuing decline in 2007.

Current currency exchange rates are a prime reason for the eastward movement of Canadian shrimp, Adams says.

"Currency is a main player in the markets," he says. "That's the first thing I look at in the morning when I get up because it affects everything I sell."

And since the U.S. dollar has slipped in value against the Canadian dollar, exporting to the United States is less attractive.

In 2003, the U.S. dollar was worth $1.54 Canadian and has since been falling steadily. At the beginning of the 2007 season, which began in April and lasted until October, the U.S. dollar was worth around $1.13 in Canada and ended up at 97 cents.

By contrast, during the 2007 season, the value of the Canadian dollar increased from 65 cents to 72 cents to the euro. The strengthening exchange rate gave players within the Canadian distribution chain a healthier margin of clout as the season progressed.

Meanwhile, West Coast shrimp stocks appear healthy. A key component in determining how much product goes to market is the age composition of the shrimp population.

Good survival rates of 2-year-old shrimp in the fishery bring processed counts well below 100, while the younger 1-year-old shrimp nudge the count toward Oregon's minimum of 160 count in the round.

"There seemed to be a nice holdover from this year's fishery," Pettinger says. "That, coupled with good recruitment, bodes well for next year, which looks to be another good season in both grade and quantity." — Charlie Ess

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