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Top 10 Species: Wild shrimp

Supply is down, but prices remain strong

By Christine Blank
August 01, 2008

While the U.S. and imported wild shrimp supply is down this year because of soaring fuel costs, suppliers are hoping to increase its value by stressing the product's premium flavor and sustainable profile.

"There are extreme shortages of wild shrimp from the United States, Mexico, Panama and the rest of Latin America," notes John Filose, VP of sales and marketing at Ocean Garden Products in San Diego.

Because of high fuel costs worldwide, shrimp boats are forced to make fewer trips, limiting supply, says Filose and other industry sources.

"Diesel fuel continues to escalate at an enormous rate. Some boats are paying [more than] $12,000 for fuel every time they go out," says Eddie Gordon, executive director of Wild American Shrimp of Charleston, S.C.

"A lot of the boats are tying up because of the price of fuel. The industry is looking at other ways to become more efficient," says Ewell Smith, executive director of the Louisiana Seafood Promotion & Marketing Board in 
New Orleans.

Domestic Gulf shrimp landings fell from 22,882 pounds from January through May of 2007 to 19,821 pounds during the same period in 2008, according to the National Marine Fisheries Service.

Some shrimp fishermen's catches are also being harmed by a dead zone in the Gulf of Mexico off the coasts of Louisiana and Texas. The zone develops where seasonal oxygen levels drop too low to support most life in and near the bottom, researchers say, and this year's dead zone could be the largest on record. The low oxygen level is caused mainly by high nutrient levels, which stimulate an abundance of algae that sinks and decomposes, depleting the water's oxygen.

Dean Blanchard, owner of Dean Blanchard Seafood Co. of Grand Isle, La., attributes the dead zone to chemical runoff from Mississippi River flooding.

"I've never seen anything like this in my life. The dead zone usually comes on us in mid-July. This year, with the high river water, it came early," says Blanchard.

Blanchard's brown shrimp catch plummeted 70 percent, or 1.5 million pounds, in June, compared to the same time last year. The company landed a total of 11 million pounds of wild shrimp last year.

As a result of fuel costs and shorter supplies, suppliers say wild shrimp prices have risen 10 to 15 percent since the beginning of the year. "It depends on the size, but prices on many whites and browns have gone up substantially compared to last season. Prices are up to where they were two years ago because of weather conditions and fuel costs," says Filose.

Average ex-vessel prices for 15-20s from Alabama, Louisiana and Mississippi rose from $3.75 a pound in 2007 to $5.55 a pound in 2008 while 21-25s also increased from $3.25 a pound in 2007 to $4.40 a pound in 2008, according to NMFS data. Average prices for 15-20s from Texas also increased from $4.50 a pound in 2007 to $5.85 a pound in 2008, while 21-25s rose from $3.85 a pound in 2007 to $4.85 a pound in 2008.

During this time of short supply, Filose urges restaurants and other buyers to be flexible on acceptable shrimp sizes.

"I've talked to some restaurants about switching from 12s to 15s. If you value the flavor of wild shrimp, you need to be flexible," says Filose.

 

Differentiating 
wild from farmed

At the same time, wild shrimp prices are strong and dealers report the product continues to sell well because of its quality, flavor and sustainability message.

"What we're trying to do now is get out the positive things about wild shrimp and the high quality standard that our certification program offers," says Gordon of Wild American Shrimp. Its "Certified Wild American Shrimp" message lets consumers know that the shrimp is caught off America's Gulf and South 
Atlantic coasts, and is not a farmed product.

In trade and consumer promotions and education, Wild American Shrimp notes the differences between wild versus farmed shrimp, following the example of the Alaska Seafood Marketing Institute and its promotion of wild Alaska salmon.

WASI-certified shrimp often obtains a $2 or $3 premium per pound in stores and in restaurants, according to Gordon. "It benefits the grocer and the restaurant, and is giving back to the shrimper who has to have it or he won't be there. Our boats could not stay in business but for that pricing," says Gordon.

By stressing wild shrimp's high quality and flavor, Wild American Shrimp aims to raise the value and price of all shrimp.

"We're starting to see a significant difference in the value that we are able to add [to all shrimp]," says Gordon.

Wild Louisiana shrimp is also selling well because of its distinction as a local, wild product.

"Besides efficiency, the other area we are focusing on is raising the quality of our product so we have better markets to go to for our shrimp," says Smith of the Louisiana Seafood Promotion & Marketing Board.

The board's Louisiana Shrimp Task Force is looking at ways to make shrimp operations more sustainable, and help shrimpers market a premium product. The Task Force is helping the state government develop a seal that would certify that the shrimp is Louisiana-caught.

"The seal is so the consumer knows they are getting a product from Louisiana, but also it is the traceability. We want to bring it overseas, so we have to have traceability," says Smith.

Consumers want to know where their seafood is coming from, and they appreciate the flavor profile of wild shrimp, according to Smith and others.

"When you can put a wild-caught product against another product, there is a difference in taste. The consumer can make a choice when they go shopping … they can get that flavor profile that they're not going to get from any other product," says Smith.

"We have tourists who come down here, and people who drive here from out of state to buy wild Louisiana shrimp," explains Blanchard of Blanchard Seafood.

The Louisiana Seafood Promotion & Marketing Board is emphasizing the flavor profile of wild shrimp with several promotions, including a New Orleans press and chef event celebrating the "first delivery of shrimp," which was held in May. A box of shrimp was wrapped in gold, transported in an armored bank truck with armed guards, and was delivered to renowned New Orleans Chef Paul Prudhomme. Boxes were also sent to Louisiana Governor Bobby Jindal, New Orleans Mayor Ray Nagin and 
other officials.

Retailers and restaurants that buy wild shrimp typically make the effort to educate their customers on the sustainability efforts of shrimp fishermen and why wild shrimp typically fetches a premium over farmed shrimp.

Upscale market and restaurant Fish of Berkeley, Calif., differentiates its shrimp and other seafood by telling customers about the fishermen who caught the wild seafood. In addition, it 
carries only wild, sustainable and environmentally friendly fish.

"The majority of seafood on our menu has a boat name and a captain name beside it. We pay them as much as they want for them to stay in business," says Kenny Belov, 
an owner and general manager of Fish.

The store's employees explain how wild shrimp are caught and what the fishermen go through to catch them sustainably. In addition, they play videos of Lance Nacio, owner of Anna Marie Seafood in Grand Isle, La., catching the product. Once, the store flew in Nacio and other fishermen, and asked them to explain their fishing operation to customers.

As a result, Fish customers pay an average of $19.99 a pound for Anna Marie Seafood's wild 
Louisiana shrimp.

"Once we explain how the wild prawns are caught, most likely they are going to pay the difference. We move through Lance's prawns so quickly, there have been times he couldn't keep up," says Belov.

With help from Louisiana State University's Food Science division, Nacio has moved to a 
more efficient and sustainable 
 operation by adding new equipment to his boat to reduce bycatch.

Nacio also added freezer equipment, which reduces handling of the shrimp. The product is caught, hand-packed in 5- and 25-pound boxes, and chilled in the boat's freezers. The shrimp is immediately shipped to restaurants in California and elsewhere, and retailers in Louisiana, such as Whole Foods Market and Rouse's supermarket.

Anna Marie Seafood is also working with the Sustainable Fisheries Partnership to obtain Marine Stewardship Council certification for its shrimp, which should help the product to maintain a premium price.

While many suppliers emphasize the value of wild shrimp at the expense of farmed product, some companies believe in offering both wild and farmed products. For example, in addition to supplying wild shrimp, Ocean Garden has had success with 2-pound IQF bags of white farmed shrimp from Mexico.

Ocean Garden has taken significant steps to ensure that its farm-raised shrimp is a quality product that benefits the environment. The shrimp are raised in clean, unspoiled waters under close supervision. The Pacific white shrimp is grown slowly to full maturity in low-density ponds and have full traceability, according to the company.

"We are supplying a lot more farmed [shrimp] than in the past. You can find quality products at both ends of the spectrum," 
says Filose.

In other good news, the Mid-Atlantic shrimp supply is strong. The North Carolina area is not experiencing the shorter supply of other areas, says Jeff Garner, VP of Sanitary Fish Market and Restaurant in Morehead City, N.C. Sanitary buys wild shrimp from other suppliers and supplies its own fish.

"In North Carolina, the supply of wild-caught shrimp is good. We pride ourselves on serving local seafood as much as we possibly can," says Garner.

In 2007, North Carolina harvested a bumper crop of more than 9.5 million pounds of white shrimp, and landings of all shrimp species (brown, pink and white) were up 64 percent from the previous five-year average, according to the North Carolina Division of Marine Fisheries.

"By all reports, and barring any tropical storms, this year's harvest could be even higher," says William Small, seafood marketing specialist with the North Carolina Department of Agriculture & Consumer Services. "However, with the high fuel prices, many boats are hesitant to leave the dock, which could hurt our harvest totals."

Find other SeaFood Business articles with wild shrimp here.

Christine Blank is a business writer and editor in Lake Mary, Fla.

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