Shrimp industry making comeback; soaring fuel costs major concern
Published: May 14,2007
When Joe Ross, 93, started shrimping in Biloxi as a teenager, fuel cost 10¢ a gallon, and his engine burned 12 gallons per day.
“A dollar and twenty cents per day was all I had to have for fuel,” said Ross, who was a commercial fisherman from his teen years until his middle 80s. “I averaged 140 pounds of shrimp to a gallon of fuel back in 1937. Today, my son on some of his best days is getting five pounds of shrimp per gallon of fuel. And fuel is over $2 per gallon. You are talking about a hell of a lot of money to get the shrimp. It is just unbelievable.”
Then there is another problem that is troubling. Ross said that porpoises are tearing into shrimp nets to get food.
“It is putting the fishermen completely out of business because the porpoise is eating the nets up,” Ross said. “They make a hole in the net, and then that has to be repaired.”
That is only the latest challenge for shrimpers, who for years have suffered from soaring costs for fuel combined with competition from imported shrimp that have kept prices low.
New season on horizon
Shrimp season is expected to start in June, coming at approximately the time of summer when there have been some predictions of fuel costs of $4 per gallon.
How many shrimp boats will be able to get away from the docks this year depends on the fuel prices, said Richard Gollott, president of Gollott’s Ice and Oil and vice president of Golden Gulf Coast Packing Company, Biloxi. “A lot of the boats have started going out now. We have some large ocean-going boats that are out now. But the season in the Mississippi Sound usually starts around the first of June.
“One large boat is capable of putting on between 30,000 to 50,000 gallons of diesel in a month or six weeks. At $2 gallon, you are looking at $60,000. Double that at $4 per gallon and it would be unbearable. If you start doubling the price of what they are paying now without the price of shrimp coming up, it would be devastating.”
Shrimpers also face a lack of onshore support facilities as a result of the damages from Hurricane Katrina. Some facilities such as Gollott’s have been rebuilt, but fishermen must wait in line to get ice and fuel and to get unloaded.
“It isn’t an ideal situation, but I see it coming back slowly but surely,” said Gollott, who is also vice chairman of the Commission on Marine Resources. “Hopefully we will find a way to hang on. I would hate to lose the industry that built the City of Biloxi. Anyone I have talked with supports the working waterfront concept, having a place for these big boats. A lot of people come to Biloxi to see the big shrimp boats. That is just part of our heritage and history. We would hate to see it go away.”
In addition to soaring fuel costs, prices for domestic shrimp are kept low because of the large amount of shrimp imported from foreign countries such as China and Vietnam. Gollott said foreign countries are finding a way around the shrimp tariff.
Prior to Katrina, Biloxi had nine plants that processed foreign and domestic shrimp. Gollott doesn’t see the shrimp processing industry ever coming back to pre-Katrina levels. Only approximately half of the processors have rebuilt.
At least the problem is mainly with infrastructure instead of the seafood population, says Mike Brainard, staff officer for the Department of Marine Resources (DMR).
“The primary concerns are with rebuilding the infrastructure as opposed to the population of fish and crabs,’ Brainard said. “Oysters took a big hit, but all the other fisheries are healthy as far as the stock. It is mostly trying to rebuild what was here before and give the seafood industry a place to work out of.”
Oysters, because they remain in one place during their life cycle, were the most impacted by Hurricane Katrina. The oyster reefs were smothered with sediment causing the death of approximately 90% of the state’s oysters. This spring the DMR, under a $3-million federal grant, is distributing 57,000 cubic yards of cultch material on reefs in Harrison and Hancock Counties. The cultch, made of limestone or old shells, give oyster spat a hard surface to attach to. It takes approximately 18 months to two years for oysters to grow to marketable size.
Brainard said the DMR has just started regularly sampling shrimp — the biggest seafood crop in Mississippi — and it is a little too early to have an idea exactly when the season will begin or what kind of harvest to expect. In 2006, shrimpers had to deal with a lot of debris from Katrina caught in their nets. But Brainard said with the Coast Guard programs to clean up the debris, there should be fewer problems this year.
One thing that could work in shrimpers favor this year is there are fewer of them.
Gulfwide, the number of shrimp vessels has declined from 2,600 before Katrina to 1,600.
“The reason for that drop in the amount of vessels that are in the fisheries are manifold, but the two big drivers of the reduction were three storms in particular: Katrina, Rita and Wilma, which did a lot of damage down in Florida,” said Dave Burrage, Mississippi State University Extension professor of marine resources. “The three 2005 hurricanes were responsible for a big proportion of the reduction in the fleet. Generally the industry is faced with increased operating costs, the most notable component of which is the price they have to pay for diesel fuel, and the price they are currently getting for their product.”
In terms of real dollars, shrimpers are getting 1970s prices for their product when adjusted for inflation. The price has not increased and, in fact, has decreased as related to cost of production.
“So they are operating on a very thin margin right now,” Burrage said. “The reason for the new licensing program is to eventually help reduce the effort in the fishery so that the folks left supposedly can make a good living. There will be less folks, so slices of individual portions would be higher. We have known for many years we have a whole lot more boats in the fisheries than required to harvest the shrimp on an annual basis.”
Domestic or foreign?
Trends continue for most of the shrimp consumed in the U.S. to come from other countries. Only an estimated 8% of the shrimp eaten in the U.S. is domestic.
One effort to support the domestic industry is labeling the shrimp as a superior product. Shrimp produced in the country that meet certain quality standards can be labeled WASI (Wild American Shrimp Inc.) and command a premium price in the market.
“It is for the discriminating consumer,” Burrage said. “You can taste the difference.”
Many shrimpers have gone out of the business on the Coast either due to losing their boat in Katrina or because of low prices and the high operating costs. There are two types of shrimp businesses that are surviving. One is the offshore freezer boats that go out for a month or longer at a time and flash freeze the shrimp on board. The economy of scale helps the big boats.
“The other end of the spectrum we see that has survived and is doing all right are shrimpers that leave at sundown for overnight trips, and come back with 200 to 300 pounds of shrimp they just caught that they sell direct to the public,” Burrage said. “That is a good deal for us because we are getting it much less than at the seafood market, and a good deal for fisherman getting a couple dollars more per pound than if they had to sell to a factory. The boats that are disappearing or really hurting are the ones that go out for five days or a week, ice their catch, and come back with too much shrimp to sell a cooler at a time. Those are the boats we are seeing less and less of in the fisheries.”
Contact MBJ contributing writer Becky Gillette at email@example.com.
To sign up for Mississippi Business Daily Updates, click here.
Top Posts & Pages
- DAVID DALLAS: Who in the Hell are We?
- New Mississippi state highway map is available for the public
- Tanger Outlets involved in Southaven project
- Ikea confirms plan for Memphis store
- McCrory joins Epps in asking for trial delay
- Ingalls to lease former SRHS clinic in Gautier for employee medical center
- Former Lane Furniture plant sold for $1.45 million
- OUR VIEW: JRA evolving toward transparency? Maybe, maybe not
- Jon-Paul Croom made CEO