1. Situation and Outlook of the US Aquaculture Industry 2000 - 2001 Dr. Terry Hanson Mississippi State University Department of Agricultural Economics

2. Presentation World trends National –consumption –species & facilities Highlight on Catfish Industry –Short- and Long-Term

3. Aquaculture is: - farming of aquatic organisms - intervention in the rearing process to enhance production - ownership of the stock being cultivated

4. World Aquaculture Production

5. Source: USDC/NOAA/NMFS, 2001

6. World Aquaculture Production Major Producer Countries Source: FAO, 2000; note data includes aquatic plants

7. US Consumption of Fish and Shellfish

8. US Per Capita Consumption Fish and Shellfish Products 15.6 lbs./capita 2000 Source: USDC/NOAA/NMFS, 2001

9. US Per Capita Consumption of Meat and Fish, 2000 * Lb/person/year 66.0 55.7 49.2 15.614.3 * Boneless weight Source: USDA Agricultural Baseline Projections to 2010, February 2001

10. Top Ten Seafood Species in 2000 13.60 Total of Top Ten 0.27Scallops 0.43Flounder/Sole 0.46Crabs 0.48Clams 0.77Cod 1.12Catfish 1.59Salmon 1.68Alaskan Pollock 3.20Shrimp 3.60Tuna Species Consumption lbs. per person Source: National Fisheries Institute, 2001 13.60 Total of Top Ten 0.27Scallops 0.43Flounder/Sole 0.46Crabs 0.48Clams 0.77Cod 1.12Catfish 1.59Salmon 1.68Alaskan Pollock 3.20Shrimp 3.60Tuna 13.60 Total of Top Ten 0.27Scallops 0.43Flounder/Sole 0.46Crabs 0.48Clams 0.77Cod 1.12Catfish 1.59Salmon 1.68Alaskan Pollock 3.20Shrimp 3.60Tuna 13.60 Total of Top Ten 0.27Scallops 0.43Flounder/Sole 0.46Crabs 0.48Clams 0.77Cod 1.12Catfish 1.59Salmon 1.68Alaskan Pollock 3.20Shrimp 3.60Tuna 13.60 Total of Top Ten 0.27Scallops 0.43Flounder/Sole 0.46Crabs 0.48Clams 0.77Cod 1.12 1.59 1.68Alaskan Pollock 3.20 3.60Tuna

11. Top Ten Seafood Species in 2000 13.60 Total of Top Ten 0.27Scallops 0.43Flounder/Sole 0.46Crabs 0.48Clams 0.77Cod 1.12Catfish 1.59Salmon 1.68Alaskan Pollock 3.20Shrimp 3.60Tuna Species Consumption lbs. per person Source: USDOC/NOAA/NMFS, 2001 13.60 Total of Top Ten 0.27Scallops 0.43Flounder/Sole 0.46Crabs 0.48Clams 0.77Cod 1.12Catfish 1.59Salmon 1.68Alaskan Pollock 3.20Shrimp 3.60Tuna 13.60 Total of Top Ten 0.27Scallops 0.43Flounder/Sole 0.46Crabs 0.48Clams 0.77Cod 1.12Catfish 1.59Salmon 1.68Alaskan Pollock 3.20Shrimp 3.60Tuna 13.60 Total of Top Ten 0.27Scallops 0.43Flounder/Sole 0.46Crabs 0.48Clams 0.77Cod 1.12Catfish 1.59Salmon 1.68Alaskan Pollock 3.20Shrimp 3.60Tuna 13.60 Total of Top Ten 0.27Scallops 0.43Flounder/Sole 0.46Crabs 0.48Clams 0.77Cod 1.12Catfish - 100% is from Aq. 1.59Salmon - 50% is from Aq. 1.68Alaskan Pollock 3.20Shrimp - 27% is from Aq. 3.60Tuna

12. U.S. Aquaculture Production

13. Production States NORTH CENTRAL NORTHEASTERN SOUTHERN WESTERN TROPICAL & SUBTROPICAL Perch Striped Bass Tilapia Catfish Striped Bass Tilapia Baitfish Trout Salmon Shellfish Striped Bass Tilapia Ornamental, Food and Shellfish Salmon Shellfish Striped Bass

14. Aquaculture Sales

15. Sales by Aquaculture Category Food fish - 70% Mollusks - 9% Ornamental fish - 7% Baitfish - 4% Crustaceans - 4% Sport/Game - 1% Other animal aqua. - 5%

16. Food Fish Species Catfish Rainbow trout Atlantic Salmon Striped Bass Tilapia Others

17. Food Crustacean Species Shrimp Crayfish Freshwater prawn Softshell crab

18. Baitfish Species Golden shiner Fathead minnow Goldfish Others –Bull minnow –common carp –tilapia –sunfish

19. Ornamental Species Goldfish Angelfish Guppies South American Catfish Koi carp 100’s of others

20. Pond Stocking Species Channel catfish Largemouth bass Bluegill Redear sunfish Yellow perch Trout

21. Estimated 1999 US Finfish & Shellfish Aquaculture Production & Value (1,000,000)

22. Estimated 1999 US Finfish & Shellfish Aquaculture Production & Value (1,000,000)

23. Ponds - 63% -> Cages and pens Raceways Closed re-circulation systems Aquaculture Production Facility Types In Use

24. Aquaculture Production Facilities Ponds Cages and pens - 4% --> Raceways Closed re-circulation systems

25. Aquaculture Production Facilities Ponds Cages and pens Raceways - 14% ---> Closed re-circulation systems

26. Aquaculture Production Facilities Ponds Cages and pens Raceways Closed re-circulation systems - 7% ----->

27. U.S. Catfish Industry

28. Catfish Water Surface Acres Total Catfish Acreage = 185,700

29. Catfish Round Weight Processed * through August 2001, 100% of last year at this time Source: USDA Economics and Statistics System, NASS *

30. Total U.S. Catfish Sales Source: USDA Economics and Statistics System, NASS ?

31. Fresh and Frozen Catfish Products

32. Product Form Sold

33. Average Fresh and Frozen Catfish Product Price Received by Processors, 1999 - July 2001

34. Catfish Fillets Processed in U.S.

35. Catfish Industry Issues Low catfish prices for producers Increasing production costs EPA effluent discharge regulations Other issues affecting production costs

36. Low Catfish Prices Received by Producers Why? Viet Namese frozen fillet imports increasing On-farm inventories up Full freezers at processing plants Economic uncertainty Stagnant per capita consumption

37. Catfish Price Paid to Farmer, $/lb 25-year avg

38. Catfish Price Paid to Farmer, $/lb 25-year avg 10-year avg

39. Catfish Price Paid to Farmer, $/lb 25-year avg 10-year avg 5-year avg

40. Catfish Price Paid to Farmer, $/lb 25-year avg 10-year avg 5-year avg 2001 price

41. Average 2001 prices * are: $0.09/lb less than 5-year average $0.06/lb less than 10-year average * through September 2001, not adjusted for inflation (nominal prices)

42. Catfish Price Paid to Farmer, $/lb 2001 price 2000 price $0.12 per lb less in Sept. 2001 than in 2000 = -16%

43. Lower Price Received by Farmer & Net Returns Cost of production: –$0.60 - $0.72 / lb –Present price of $0.62 / lb => Loss for less efficient farmers Very low profit for efficient farmers

44. Imports of Catfish to U.S. Source: USDA/NASS

45. Imports of Catfish to U.S. <= River Catfish from Brazil whole fish from rivers Source: USDA/NASS

46. Imports of Catfish to U.S. Viet Namese Frozen Fillets 78% - 97% of all imports => Source: USDA/NASS * Through July 2001 *

48. How have imports affected the price of frozen catfish fillets? Frozen Catfish Fillet Prices 1999 - 2001

49. Comparison of Fillet and Pond Bank Prices

50. Industry Response to Imports Legislation –“Country of Origin” labeling –Removal of Channel Catfish images on import packaging –Seek to have ‘Catfish’ name removed from non- Ictaluridae fish species Advertising –Concentrate on strict US safety and health standards Legal –Anti-dumping case?

51. Food Fish Inventories UP Compared to last year Food Fish Inventories are Up –Large FF + 54% –Medium + 46% –Small + 24%

52. Food Fish Inventories UP Why? Fish size that processors want has increased Early 1990’s - 1.00 lb avg Mid 1990’s - 1.25 lb avg Early 2000’s - 1.50 lb avg Some processors now wanting 2.0 lb avg Larger fish require longer production cycle 18-24 months

53. Food Fish Inventories UP “Glut” of fish ready for harvest –Expensive and risky for farmers to keep on-farm –Low prices make selling unattractive Some Processors are reducing the number of shifts or processing lines

54. Increasing Production Costs Feed price inching upward Increasing bird populations Diseases: old and new

56. Types of Bird Damage Feeding on catfish (80%) Injury of fish (33%) Disrupting feeding (23%) Damaging structures (23%) Transmission of disease –White Pelican - trematode - Ram’s horn snail, since 1998

57. DCCO Wintering Population and Catfish Acreage in MS Delta

59. EPA Effluent Discharge Regulation Looking at aquaculture discharge as point source of pollution –Diverse industry Screener survey sent out in Aug/Sept ‘01 Long form of survey to follow Regulations due out in July 2002 –Expected to increase costs of production

60. 75 cents/lb Fish Price 55 cents/lb 60 cents/lb 65 cents/lb 70 cents/lb

61. Short-Run If producers cannot cover variable costs: –Stop producing? –Difficult to stop multiple-batch production systems –May delay restocking ponds Could lead to future shortages 15 - 18 months later

62. Long-Run If producers cannot cover Variable and Fixed costs, then what? –Make Adjustments to production scheme modular components specializing in developing large stockers use of genetically improved or hybrid catfish for faster growth better management of off-flavor, diseases, and birds

63. Outlook for 2002 Expansion on hold –Less new pond construction –Efficient farms will break even –Less efficient farms will lose some equity gained in last few years

64. Outlook for 2002 If prices remain low: –some producers will not restock –could lead to a shortage of fish in 2003 –adapt with new less expensive strategies of production

65. Outlook for 2002 Much depends on how successful industry is in handling increasing imports

66. Outlook for Long-Term Food producers will be needed Food producers will make a living and make money Catfish production will continue to increase –Fish consumption will continue to go up –Beef is a substitute high beef prices will likely increase fish consumption