« July 2011 Table of Contents
Top Species: Catfish
Déjà vu for domestic industry, with a few tests from Mother Nature
By Joanne Friedrick
July 05, 2011
Consolidation, high feed costs and an ongoing recession have dogged catfish producers over the past several years and those issues were still present as 2011 unfolded.
“It has been a little bit of a wild ride,” says Rob Mayo, president of Carolina Classics Catfish in Ayden, N.C. Supply has never been tighter, he says, and with an industry that continues to shrink “we’re still going to be tight going forward.”
Feed costs have risen not just for catfish farmers, but for all aquaculture and farm animals, he says, which translates “to a new era of higher food prices, including farmed fish.”
In 2010, catfish growers in Mississippi, Alabama, Arkansas and Texas had sales of $403 million, up about 8 percent from the previous year, according to the U.S. Department of Agriculture’s National Agriculture Statistics Service (NASS). Market-size sales accounted for $375 million, with the remainder coming from sales of fingerlings, fry and stockers.
But while sales rose, there is a continuing decrease in the acreage utilized for catfish farming. NASS surveys showed water surface acreage for catfish production had declined 13 percent to 99,600, down from 2010’s 115,000 acres. Among the producing states, only North Carolina and Texas didn’t decrease acreage. Mississippi, which had by far the largest share at 64,000 acres in 2010, dropped to 55,500 acres at the beginning of the year.
“Each individual farm is analyzing the future of the operation,” says Roger Barlow, president of The Catfish Institute in Jackson, Miss. “Input costs (such as feed) effect the industry tremendously,” he adds, and the rising cost of fuel has also had an impact.
On the positive side, he says, “we have seen prices improve to the point where growers are seeing some profit. Because without profit, people will continue to exit the industry.”
Mother Nature weighs in
Because of the drop in acreage, Barlow predicts production will be down this year. An added variable to the production outlook was the flooding along the Mississippi River in May. “Any time Mother Nature is involved, it’s hard to be prepared,” he says. At one point, the river was 14.5 feet above flood stage.
The good news, says Barlow, is that growers were aware of the situation and either moved catfish to higher ponds or increased their processing of existing stocks. “So I’m not sure at this point how it will affect the industry,” he says.
Randy Rhodes, president of Harvest Select in Uniontown, Ala., participated in daily meetings to gauge the impact of the flooding on the company’s farming operations in Inverness and Hollandale, Miss. Seeing the swollen river in person, he says, “it looked like the Gulf of Mexico.” Fortunately, he says, Harvest Select’s operations are a long way from the levee.
The company’s Alabama operations were spared damage after a series of tornados hit that state in late April. These natural disasters come on top of a year in which processors have had difficulty meeting demand. “Most processors didn’t think it would be as severe as it was,” says Rhodes, who adds his customers have been patient. Through April, 164.7 million pounds of catfish were processed, down 36 percent from the same period in 2010.
Heading into summer, Rhodes predicts that supplies will rebound, but he acknowledges that some customers may have turned to other species or imports to fill their orders. Vietnam’s exports of pangasius, a catfish-like species, to the United States in 2010 hit 108 million pounds, followed by China with 17.9 million pounds and Thailand at 7.8 million, according to stats from NOAA Fisheries.
“We’ve lost some business to imports, but there is a core group that looks for U.S. farm-raised catfish. Unfortunately, we’ve come from a large volume of fish in 2005 to where we are this year,” he says. And with 85 catfish operations exiting the business in 2010, leaving 909 in existence, a challenge to consistently meet demand likely will remain.
Loyalty and promotion
Sadie Ross, owner of David’s Catfish House, counts herself among those who remain loyal to U.S.-produced catfish. At the restaurant’s seven locations in Alabama and Florida, five of which are franchises, there are signs touting their use of U.S. farmed catfish. “Even during the BP oil spill, we just paid more. I don’t use imported and I never would,” she says.
However, Ross says she has finally had to increase prices after seeing her costs rise.
“My fish went up two months ago by 40 cents a pound,” she says, and that is after increases of 60 to 80 cents previously. “We now pay $4 a pound [for frozen fillets].”
David’s is an all-you-can-eat establishment, but with prices moving higher, Ross says some customers now opt for buying smaller portions or getting the children’s plate. Still, she says, “business is great.”
Demand hasn’t slowed, says Mayo of Carolina Classics, but like Rhodes he has had some issues with filling orders. “Supply is so tight, so we are trying to ship as much to our customers as we can.”
Mayo acknowledges that imports are part of U.S. supply, so it behooves U.S. producers to maintain quality. “I’ve always had the viewpoint that 80 percent or more of seafood is imported. My issue is that it has to be good quality seafood.” Bad product, he says, whether imported or domestic, “hurts us.”
USDA’s Food Safety and Inspection Service is now responsible for implementing rules on catfish inspection that were mandated by Congress three years ago. The ongoing debate is on which species of catfish to include, which would impact how much imported product is inspected.
The North Carolina Department of Agriculture has done some promotion on farmed catfish, Mayo says, and Carolina Classics also provides materials for retailers, such as recipe cards. “We have to figure out how to better disperse the information and educate the consumer and the retail employees who come face-to-face with consumers,” he adds.
There are several programs under way, says Barlow, to raise awareness of catfish.
The Young Farmers Leadership Program, which launched in 2010 in Mississippi, is designed to educate the next generation of catfish farmers, says Barlow, and get them up to speed on marketing and product development.
The Catfish Institute also promotes catfish through its Farmer of the Year program. “We are selling an American farmer with an American fish to an American consumer,” says Barlow. The farmers, who participated in the International Boston Seafood Show this year, “are talking to the people. Buyers like to know who is the person who is growing the fish,” says Barlow. The farmers, representing growers in Alabama, Arkansas and Mississippi, are being featured in print ads and radio spots. “They are real people,” he adds.
One effort that has been put off temporarily, Barlow says, is the rollout of the Delicata cut of catfish. “It still remains an opportunity for the industry, but the shortage of fish has impacted it,” he explains.
Developed several years ago, the specialty cut is aimed at upscale restaurants and would garner a higher price than traditional catfish. “Our strategists have met with the processors and we’re looking for the right time and opportunity,” explains Barlow. “It’s still a viable, but not-yet-launched, opportunity.”
Barlow is hopeful that the time will be right soon. “There’s a wind of optimism blowing,” he says. “There’s a feeling that the recession is beginning to wane and people have optimized their resources and capital and are looking down the road.” Contributing Editor Joanne Friedrick lives in Portland, Maine