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Top Story: Katrina knocks Gulf down but not out

Region's seafood industry vows to rebuild after hurricane

Steven Hedlund
October 01, 2005

Hurricane Katrina delivered a catastrophic blow to the upper Gulf Coast at the end of August, killing at least 1,000 people, leaving hundreds of thousands homeless and ripping apart the region’s treasured seafood industry.

The storm tore up shellfish beds, demolished countless fishing boats and processing and distribution facilities and washed out entire ports, highlighting the region’s value to the U.S. seafood industry. Collectively, Louisiana, Mississippi and Alabama represent about 15 percent of domestic seafood landings.

Only Alaska produces more seafood than Louisiana’s 1.2 billion to 1.3 billion pounds.

The cultural fallout from Katrina is as significant as the economic impact. New Orleans, as much as 80 percent of which was under water, is a culinary icon, famous for its Creole and Cajun cuisines and its seafood dishes, including gumbo, jambalaya, oyster po’boys, shrimp rémoulade and boiled crawfish.

But only days after Katrina hit, the region’s seafood industry was already getting back on its feet. A few shrimp-processing plants in Houma and Dulac, La., and Bayou La Batre, Ala., at opposite ends of the hurricane’s reach, were up and running again.

One Houma fisherman netted 11,000 pounds of shrimp in just three to four days. And the Big Easy’s celebrated restaurateurs vowed to reopen as soon as possible.

“We’re a strong, resilient people,” says Mike Voisin, VP of Motivatit Seafoods in Houma and president of the Louisiana Oyster Task Force. “The industry will survive and thrive again.”

But it’ll take months, perhaps years, to rebuild completely.

The oyster resource was hit the hardest. About two-thirds of Louisiana’s oysters are harvested from Bayou Lafourche to the Mississippi line, which bore the brunt of the hurricane and its 145-mph winds and 20- to 25-foot tidal surges.

The oysters are buried in silt, and the area isn’t expected to yield a crop for two to three years. 

Louisiana represents about two-thirds of the nation’s 750-million-pound (in shell) oyster harvest. Mississippi, which also took a direct hit, accounts for roughly 10 percent. 

The shrimp and blue-crab fisheries’ infrastructures were also devastated, though state officials said it was too early to estimate the number of vessels and processing plants Katrina wrecked. Louisiana represents more than half of the 150-million-pound Gulf shrimp catch and more than one-quarter of the 160-million to 185-million-pound U.S. blue-crab harvest.  Mississippi and Alabama collectively account for about 15 percent of Gulf shrimp landings.  

Restaurateurs and retailers nationwide should expect to pay more for seafood in the coming months, particularly live oysters and blue crabs. Shrimp prices may not be affected, as roughly 85 percent of the U.S. shrimp supply is imported.

Crude oil jumped nearly $5 a barrel, to a record $70.80 on Aug. 29, the day Katrina pounded the upper Gulf Coast, forcing eight refineries to temporarily cease or reduce operations. Consequently, fuel surcharges shot up to levels too high for seafood distributors to absorb, so they’re passing the increase down to restaurateurs and retailers. 

Consumers paid well over $3 a gallon at the pump in early September and are curbing non-essential expenses such as dining out. Though the national average dipped below the $3 mark by mid-September, gasoline prices aren’t expected to return to pre-Katrina levels anytime soon. 

New Orleans, where much of the upper Gulf’s seafood bounty is sold, isn’t expected to fully return to business anytime soon, either. The city is home to the renowned Commander’s Palace and Acme Oyster House restaurants, established in 1880 and 1910, respectively. The historic French Quarter, where the eateries are located, escaped most of the flooding because it sits 5 feet above sea level. 

But most of the city sits below sea level. Atlanta-based Inland Seafood operates a distribution facility a block-and-a-half from Tulane University Hospital and four blocks from the Louisiana Superdome. 

“We think it’s under water. We’re not sure. We’re not allowed to go down there,” said Joel Knox, president of Inland Seafood, 11 days after Katrina struck. 

“We hope [the facility’s inventory of fresh and frozen seafood] was looted and put to good use” before it spoiled, he said.

All 37 of the facility’s employees were accounted for and will receive paychecks, added Knox. 

San Diego-based Bumble Bee Foods operates a shrimp-canning plant in Violet, La., 14 miles southeast of New Orleans. The building, which was under 12 feet of water, was damaged but intact. One employee voluntarily rode out the hurricane in the plant and dispensed canned shrimp, tuna and salmon to neighbors after the storm, says John Stiker, executive VP of corporate development for Bumble Bee. 

All 20 of the facility’s full-time employees were accounted for and will receive paychecks, but some of its 180 seasonal employees were still missing 16 days after Katrina hit, he adds. The facility will remain closed at least through the Gulf’s fall shrimp fishery, notes Stiker. 

All but five of the 53 Darden restaurants damaged by the hurricane had reopened as of Sept. 13, according to spokesman Mike Bernstein. Two Red Lobster locations, one each in Louisiana and Mississippi, and three Olive Garden units, two in Louisiana and one in Mississippi, will remain closed indefinitely. Fewer than 100 of the Orlando, Fla., company’s employees were still missing, he adds. 

“Our employees seem to be in pretty good spirits, given the circumstances,” says Bernstein, “and some of them lost homes.”  

Commitment to rebuild  

The seafood industry along the upper Gulf Coast is committed to  rebuilding. 

“It’s essential that we bring back New Orleans from a culinary standpoint and a cultural standpoint,” says Ewell Smith, executive director of the Louisiana Seafood Promotion and Marketing Board, who vacated his New Orleans home and rode out the hurricane in Baton Rouge, La. 

“Louisiana is defined by its food, especially its seafood. We can’t let that die,” he insists. “We’re going to rebuild. It’s just going to take time. If there’s any industry that’ll come back, it’s the seafood industry. We’ve been down before. Katrina is the biggest blow we’ve ever faced, but we’ll come back.” 

“I haven’t heard anyone say they’re not going to rebuild,” adds Eddie Gordon, executive director of Wild American Shrimp, the marketing arm of the Southern Shrimp Alliance, which represents fishermen and processors from Texas to North Carolina. 

Louisiana’s seafood industry could lose $1.1 billion in retail sales over the next year due to Katrina, according to preliminary estimates from the Louisiana Department of Wildlife and Fisheries. The figure doesn’t include losses from damaged fishing boats, docks and processing plants, which hadn’t been tallied by press time. 

Seven of the nation’s 50 largest fishing ports, in terms of volume, are located in Louisiana. Katrina made landfall near three of them: Empire-Venice, the nation’s second-biggest fishing port, Golden Meadow-Leeville and Grand Isle. Collectively, they yield more than 440 million pounds of seafood a year. 

Katrina also hit hard in Pascagoula-Moss Point and Gulfport-Biloxi, Miss., and Bayou La Batre. Collectively, they yield more than 230 million pounds of seafood a year. 

According to the National Marine Fisheries Service, 15 major fishing ports, with 177 processing plants, were damaged significantly. Collectively, there are more than 1,800 federally licensed fishing boats in Louisiana, Mississippi and Alabama. 

Katrina couldn’t have come at a worse time. Louisiana’s oyster harvest in public beds east of the Mississippi were due to open Sept. 7, close Sept. 16 and reopen Oct. 17 for five-and-a-half months. 

“This is the worst I’ve seen in my 42 years,” says Bob Jones, executive director of the Southeast Fisheries Association in Tallahassee, Fla. “It looks like someone dropped a bomb” on the upper Gulf Coast.

After being criticized for its slow response to the hurricane relief effort, the Bush administration on Sept. 8 declared Gulf fisheries a disaster, opening the door for federal aid. 

That’s welcome news for oyster harvesters and processors. Motivatit’s Voisin pegs Katrina’s overall economic impact on Louisiana’s oyster industry at $363 million over the next two years, or $543 million over the next three years. Motivatit’s Houma headquarters was damaged, but only minimally, and all 75 of the company’s employees are accounted for, he says. 

Louisiana officials closed oyster beds from Atchafalaya River to the Mississippi border on Sept. 8, then reopened beds in Terrebonne Parish on Sept. 16. Oyster beds east of Terrebonne are closed indefinitely. 

“I’ve spoken to quite a few dealers, and they lost everything,” says Steve Hillman, VP of Hillman Shrimp & Oyster Co. in Dickinson, Texas. 

“Oyster prices will be higher this year than they’ve been in the past 20 years,” he says. Hillman processes oysters from the upper Gulf Coast, especially when the Texas harvest, which runs from Nov. 1 to April 30, is closed. 

In addition to oysters, live-blue-crab prices are expected to increase significantly, especially in the winter, when crab fisheries from the Chesapeake to the Carolinas subside and the basket trade turns to the Gulf. 

The same could go for live crawfish. Louisiana represents about 90 percent of the nation’s crawfish harvest, producing roughly 78 million pounds of wild and farmed crawfish last year. But the bulk of the harvest, which kicks off next month, comes from Atchafalaya Basin in central Louisiana. Up to 90 percent of the crop is sold live; the rest is processed into tail meat. 

Louisiana’s fall shrimp fishery, which stretches from mid-August to mid-December, was just getting under way when Katrina slammed Lafourche, Jefferson. Plaquemines and St. Bernard parishes, tossing hundreds of boats ashore and depositing them in marshes and forests or on highways. 

But in Terrebonne Parish, which dodged the brunt of the hurricane, some shrimpers were on the water just days after Katrina struck. Kimberly Chauvin, co-owner of Mariah Jade Shrimp Co., in Chauvin, La., says her son, David Jr., was hauling in so much shrimp that he was running out of room to hold it on his 65-foot trawler. Her husband, David, was also shrimping successfully on his 73-foot trawler. 

“If you drew a [vertical] line on a map through Houma, everything west of the line, to my understanding, is OK,” says Jon Bell, a seafood-technology professor at Louisiana State University in Baton Rouge. “I bought shrimp at the farmers’ market in Baton Rouge [on Sept. 10], and it was caught after Katrina.” 

Fuel prices skyrocket 

For shrimpers whose livelihoods weren’t shattered by Katrina, rising fuel prices could be the straw that breaks the camel’s back. 

“Fuel prices are a big problem because it’s affecting everyone,” says Gordon of Wild American Shrimp. 

“It’s hitting us at the peak of the fishery. Diesel prices are so high that it’s very difficult for shrimpers to break even. They have to find niche markets.” 

Fuel prices are also hurting distributors. MidWest Seafood was forced to slap a fuel surcharge on out-bound freight for the first time ever last month. Fuel surcharges on in-bound freight have increased from 3 percent to 20 to 25 percent over the past few years. The Springboro, Ohio, company’s fleet of 24 trucks delivers seafood to restaurateurs and retailers in Ohio, Indiana and Kentucky, 

“We couldn’t absorb it any longer,” says Lauren Easton-Enz, VP of sales and purchasing for MidWest. “One or two customers were concerned. But once we explained the situation to them, they seemed to be pretty  understanding.” 

 Fuel prices are expected to cut about $10,000 out of Poseidon Enterprises’ bottom line this year. The Charlotte, N.C., company’s fleet of 75 trucks delivers seafood to restaurateurs and retailers in 10 Southeastern states.

“We have to pass the increase down to customers,” says Mike Henninger, VP of Poseidon. “We have no choice.”

The sharp bump in fuel surcharges will take time to reach consumers. But the steep hike in gasoline prices hit them immediately, compelling them to limit non-essential expenses such as dining out.

Consumers were also concerned about the safety of seafood from the upper Gulf Coast. On Sept. 12, the Food and Drug Administration issued an advisory informing consumers that it’s working with state and local officials to ensure that seafood caught in hurricane-affected waters is safe to eat.
 

The agency is also inspecting product at processing and distribution facilities to determine whether seafood in storage during Katrina is safe to consume. The FDA ordered that all seafood exposed to floodwaters be destroyed.
 

The short-term effects of a catastrophic hurricane such as Katrina are largely unknown, because fisheries officials are focused entirely on rescue and relief efforts in the wake of the storm. 

“Generally, deepwater fish aren’t affected by a hurricane,” says Wayne Bennett, a biology professor at the University of West Florida in Pensacola, Fla.  

“In deep waters, the sea floor, from a physical standpoint, isn’t affected. Most of the effect is on or near the surface. 

“The biggest problem,” he notes, “is associated with the loss of boats, docks and other infrastructure.” 

And it’s a problem the seafood industry along the upper Gulf Coast is eager to put behind it.
 

“We’ve been through a lot over the years, and this is the worst,” says Motivatit’s Voisin. “Katrina was no ordinary storm.” 

 October 2005 - SeaFood Business 

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