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One Man's Opinion: Katrina could ultimately benefit the Gulf industry
Peter Redmayne
October 01, 2005
The irony is that amid all the pain and suffering
the Gulf seafood industry is experiencing, the long-term outlook is somewhat
brighter. Involuntary restructuring wrought by Katrina could result in a more
profitable industry with fewer, stronger players.
In the immediate wake of the devastation wrought by
Hurricane Katrina, which pummeled the Gulf Coast at the end of August, it
looked as if the seafood industry in Louisiana, Mississippi and Alabama had
been dealt a knockout blow. Pictures of beached shrimpboats were run on front
pages, and reporters told of shrimp rotting in destroyed processing plants.
Louisiana’s oyster industry, the largest in the nation, was
almost obliterated, as beds were covered in mud and oysters suffocated.
According to Mike Voisin, a third-generation oyster processor from Houma, La.,
all of Mississippi’s production was wiped out, and as much as two-thirds of
Louisiana’s oyster harvest could be lost. And, since oysters take several years
to grow, recovery is a long way off.
There’s little doubt the economic impact on the Gulf
seafood industry will be huge. Some early estimates put the initial damage at
$1 billion. Longer term, the damage could be higher. Two of the industry’s main
markets, the Mississippi casinos and New Orleans restaurants, may never be the
same.
In spite of the damage, two weeks after the catastrophic
storm hit, some people in the Gulf industry were complaining that the media was
painting too grim a picture of the seafood industry’s condition. A number of
seafood processors and distributors were anxious to let customers know they
were open for business and still had product to sell.
How quickly the Gulf seafood industry gets back on its feet
will, of course, depend largely on how quickly the U.S. government can come to
its aid with disaster loans. Given the initial response of the feds to Katrina,
fishermen and processors may not want to hold their breath.
But the reality is that some sectors of the Gulf industry
have been marginally profitable at best for some time, and the industry was in
need of restructuring. The shrimp sector, especially, has seen prices plummet
as inexpensive farmed-shrimp imports soared. Last year’s successful antidumping
suit helped stem the tide of imports (shrimp imports were down 9 percent for
the first half of this year), but prices remain at near-historic lows.
There’s little doubt that some struggling boats and
processors will simply give up. After Katrina, rebuilding their business will
be simply too overwhelming.
The outlook of Louis Thompson, a 61-year-old fisherman from
Louisiana’s Plaquemines Parish, was typical. “We are fishermen,” he told a
reporter. “It’s going to be hard to do something else. We don’t have much to
live on. We take care of one another. We’re survivors.”
Make no mistake, the Gulf seafood industry, which is a
significant component of the U.S. seafood industry, will survive. But it will
be a far different industry. Katrina will force consolidation. There will be
fewer fishermen. The boats that survive will catch more shrimp and they will
deliver to ports in Texas and Florida, which have the infrastructure to support
them. Given the realities of the farmed-shrimp business, it is highly unlikely
that prices will recover to the point that the Gulf industry can support the
same number of boats.
On the processing side, it is also certain that some
companies will simply give up, swamped by government red tape and their
marginal economics.
