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Point of View: The great shrimp hoax

Domestic wild shrimp producers need to develop and promote their product instead of bashing farmed shrimp

“Whether shrimp is domestic or imported is largely a meaningless distinction. It’s country  of origin. What we’re really talking about  is wild-caught versus farmed  — two significantly different products.” - Photo courtesy of Mazzetta Co. LLC
by Tom Mazzetta
February 01, 2013

With all of the media coverage on imported shrimp countervailing duties, the last thing I thought I’d be doing with my free time is thinking about the differences between imported and domestic shrimp. However, the attention being given to the recent trade action filed against imported shrimp got me thinking about the great hoax that has been perpetuated by some in the U.S. wild shrimp industry regarding imported farmed shrimp.

For many years, we’ve heard that the major cause for the financial woes of domestic shrimp producers is the influx of “cheap imported shrimp.” Our domestic shrimp producers have continually bashed imported product in the media and with policymakers, and have pursued any number of trade cases against imported shrimp in an effort to drive the price up or the demand down. In terms of full disclosure, I’m friends with many domestic producers, and although I consider them to be good people, it’s been an exhausting, steady drip of misplaced anger for as long as I’ve been involved in the shrimp business. 

The latest effort in this regard was filed by a group of domestic shrimp processors, a trade case claiming that shrimp being imported from certain countries receive [foreign] government subsidies leading to lower prices that theoretically harms our domestic producers in the marketplace (see News Recap, page 8 of ePub). Putting the merits of the case aside, the time has come to have a candid discussion about domestic and imported shrimp and the great hoax that has been perpetuated for far too long. Whether shrimp is domestic or imported is largely a meaningless distinction. It’s country of origin. What we’re really talking about is wild-caught versus farmed — two significantly different products. We don’t farm shrimp in the United States, which is why it costs a heck of a lot more money to bring our domestic shrimp to the marketplace. It’s not the same product as a farmed shrimp, and there is no way a wild product can compete on a price scale with a farmed product. Nor can wild-caught shrimp compete in terms of volume, consistency and year-round availability. The key to overcoming that significant cost difference is intense marketing to ensure consumers understand why they should pay a higher price for wild product. Wild Alaska salmon comes to mind as a great example.

When you think about unfair trade, you generally think about identical products in the marketplace. Tires, steel, tin cans, mattress springs — you get the idea. These products are generally produced in the same way here and abroad. So if the market prices are drastically different between foreign and domestically produced tires, the case can be made for some sort of unfair market force that allows for it. However, in the case of farmed and wild shrimp, farmed shrimp is supposed to cost less to produce than wild shrimp. You’d be running the worst farm on the planet if it didn’t. Excuse the logic here, but in my view it’s ridiculous to contend that a strong wild shrimp industry in the United States can only be achieved by punishing farmed product from abroad. Whether that punishment comes in the form of trade cases, general bad-mouthing, food-safety scares or policy provisions designed as barriers to entry, the overall goal is the same; to cause disruption in the import of farmed shrimp with the hope that it positively impacts the price of domestic wild shrimp. 

And here’s the dirty secret; the price of U.S. shrimp is set at the docks by the processors. Curiously, that price is consistent throughout the domestic industry. The processors/distributors are the ones that ultimately bring the product to the marketplace. However, because they have failed to educate consumers as to the differences and why they should pay more for a wild product, they need to artificially keep their prices low and in-line with farmed shrimp in order to compete. If that’s the case, then of course fishermen are getting less for their product than they deserve. Naturally, they assign the blame to farmed shrimp producers as the only other competing force in the marketplace. For those of us in the shrimp business this isn’t news, but it’s clear from recent media reports and legal filings that many people out there still believe that the price of farmed shrimp is the reason the wild shrimp industry has never gotten the prices they feel they deserve. 

The time has come to put an end to this hoax. As has been said many times, the key to success for wild U.S. shrimp starts with domestic producers spending more effort (and money) developing and promoting their product and less effort racing to the bottom on price and then faulting farmed producers for it. Farmed and wild-caught shrimp are two drastically different products that shouldn’t be competing on price at the seafood counter or in the courtroom.  

Tom Mazzetta is CEO of Mazzetta Co. LLC in Highland Park, Ill.

 

February 2013 - SeaFood Business  

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