Catfish producers in the United States are likely to take a “wait and see” approach in 2002. With pond-bank prices nearly 4 cents per pound below the 25-year average, catfish industry expansion is expected to be on hold next year, says Terry Hanson, Extension agricultural economist with Mississippi State University.

“Low prices have reduced profits and will put a hold on new pond construction,” he says. “Those with equity may take advantage of this time by taking ponds out of production and renovating them.”

Speaking at the Southern Region Agricultural Outlook Conference in Atlanta, Hanson said even the most efficient catfish producers will have a difficult time making money at the current price of 62 cents per pound. Less-efficient producers will lose some of the equity they've gained in times of higher prices in recent years.

“If prices remain low, some producers may not restock, which could result in lower industry production in 2003,” he said.

Much has been said about the effect of imports of Vietnamese basa fish on U.S. catfish prices, which have dropped from 69 cents to 62.4 cents per pound since January 2001, says Hanson. But that's not the only problem impacting U.S. producers.

“Since 1999, imports of fish from Vietnam have certainly challenged the U.S. farm-raised catfish industry,” he noted. “The imported product is frozen, in fillet form, and directly competes with U.S. farm-raised frozen catfish fillets.”

Other countries export catfish to the United States, but Vietnam has contributed from 78 to 97 percent of all imports since January 2000. As of June 2001, when the latest import figures were available, Vietnamese imports accounted for 18 percent of frozen U.S. catfish fillet sales.

“This has hurt the U.S. catfish industry, as the fillet is the bread-and-butter product of the processing industry,” says Hanson. “Frozen fillet prices for U.S. catfish have decreased in 2001 from normal years.”

In general, prices received by catfish farmers follow a seasonal pattern that has prices at their lowest in November, December and January. From February until May, prices rise to their maximum and then begin receding toward the winter low prices.

“This pattern has been followed for the past 25 years, but in 2001 the pattern was different,” he says. “Prices never rose in late winter and spring and instead have gone down, down, down.”

According to USDA's National Agricultural Statistics Service, the August 2001 producer price average was 62.4 cents per pound, 9 cents below the five-year average. The average 2001 price has been 12 cents per pound less than 2000 prices, a decline of 16 percent.

As imports of foreign fish have grown, on-farm inventories of food-sized catfish have increased. Processor plants reportedly have near-full freezers of fish that are not being moved as quickly as they were in the past. “And, there is the economic uncertainty, which translates into reduced consumption of catfish via fewer restaurant sales,” he says.

Catfish industry organizations mounted a full-court press on both the legislative and advertising fronts to try to get relief from the flood of imported fish. (See story about the new law regulating catfish labeling, Page 14.)

The Catfish Institute, meanwhile, has been concentrating on getting the message out to U.S. consumers that they should feel safe about eating U.S. farm-raised catfish because they have been raised according to strict U.S. safety and health standards.

Besides the import issue, U.S. catfish producers are also feeling the impact of rising feed prices, which had been holding steady at $200 per ton from the fall of 1998 until last June.

“This was a low feed price and was helpful to farmers as feed expenses account for 50 to 60 percent of variable production costs,” said Hanson.

In recent weeks, the price of 32-percent protein, floating catfish feed was $218 per ton, up 9 percent from August. “In these times of low selling prices, this further reduces the likelihood of a farmer earning a positive net return,” he noted.

At 75 cents down to 70 cents per pound, most producers can cover cash costs even if feed prices rise to $250 per ton, he said. At 65 cents per pound, cash costs would be covered only if feed prices remained around $200 per ton. Below 65 cents, farmers would have a difficult time covering cash costs.

“In the short-run, if variable costs are not covered, most farmers would not continue operating,” says Hanson. “However, it is not easy to stop an on-going catfish production system, as multiple batches of different-size catfish are in the same pond. So, under present conditions, some producers have voiced concerns about restocking.”

If prices do not improve, farmers can make adjustments in their production schemes, he says. They may change from stocking 6-inch fingerlings to stocking larger fish, called stockers, that can be harvested in the same year.

They may also use modular production systems, specializing in fry-to-fingerlings, fingerlings-to-stockers and/or stockers-to-harvest size fish.

The National Warmwater Aquaculture Center at Stoneville, Miss., has also released a new strain of catfish that grows 15 to 20 percent faster than other strains of catfish.

Hanson believes catfish production will continue to increase as producers adapt to changing conditions. “Modification of catfish production systems may be needed to provide the larger-size fish desired by processors,” he noted.

“Fish consumption in the United States will continue to increase because of health trends and increasing beef prices.”


e-mail: flaws@primediabusiness.com.