« October 2005 Table of Contents Pin It

One Man's Opinion: Katrina could ultimately benefit the Gulf industry

Peter Redmayne
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.

October 2005 - SeaFood Business 

Featured Supplier

Company Category