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Top 10 Species: Catfish

U.S. farmers, processors struggle, importers defend Chinese product

The catfish industry is developing a range of new
    value-added products. - Photo courtesy of American Pride Seafood
By Christine Blank
June 01, 2008

While the domestic catfish industry toils in the short term with high feed and fuel costs, steady supply and demand is expected.

High fuel prices have had a "tremendously negative" affect on the cost of production, says Roger Barlow, president of The Catfish Institute in Jackson, Miss., and executive VP of the Catfish Farmers of America of Indianola, Miss.

With fuel and feed costs rising, some catfish farms in the Mississippi Delta region have had to close their businesses, while others are trying to hang on one more year.

"With increased overhead costs within the U.S. catfish industry, we expect some farming operations to cease production, which will further decrease domestic supply," says Barlow, who does not know the exact number of farmers who've had to cease operations.

Imports of pangasius, a catfish cousin from China, Vietnam and other countries, has also hampered domestic production over the past few years. Catfish imports have increased so rapidly - thanks in part to their lower costs - that the U.S. catfish industry has come out fighting.

"The foreign producers escape the cost of complying with stringent U.S. production, processing and health regulations; thus, they have the capability to unfairly keep their prices lower in the market," says Barlow.

As a result, the domestic industry has been pointing out that their products are "safer" and, therefore, better.

"There is considerable value in the words, 'U.S. Farm Raised.' They denote quality, healthfulness and consistent supply," 
says Barlow.

The Food and Drug Administration issued an import alert on Chinese catfish last summer, due to antibiotics and fungicides found in some imports. The agriculture departments of Alabama and Mississippi also temporarily banned imports from China last spring over antibiotics.

The domestic industry's push against imports may be aided by the Georgia Department of Agriculture's recent discovery of the banned antibiotic enrofloxacin in Chinese catfish fillets sold at a Wal-Mart Supercenter in Hazelhurst, Ga., earlier this year.

That lot of catfish, distributed by American Pride Seafoods in Greensboro, Ala., was pulled from shelves, but Georgia officials have so far said they do not intend to ban sales of all Chinese catfish. They will, however, step up inspections of domestic and imported seafood.

In other positive support for the domestic industry, the new Catfish Origin Law in Mississippi, which goes into effect July 1, requires the state's restaurants to disclose the origin of the catfish they serve. The law is meant to support the domestic catfish farming industry, primarily made up of farms in Alabama, Mississippi and Louisiana.

"I think it is a very good thing. We're committed to serving a product that is locally grown in the state," says Karen Sinopoli, co-owner of longstanding restaurant Catfish Charlie in Gulfport, Miss.

In addition to supporting the local industry - already battered by Hurricane Katrina and high production costs - Sinopoli says she prefers the quality of domestic catfish over imported product.

However, John Victoria, president of Western Edge Seafood in Washington, Pa., says many buyers believe Chinese catfish is a better product than domestic, and the antibiotic problems of last year have been resolved.

Western Edge sources farmed channel catfish fillets from Chinese farms certified by the China Catfish Institute, a branch of the China Fisheries Association.

"The China Catfish Institute has started a lot of rules and regulations for the catfish industry. We have to test our product in numerous ways, but you never hear about domestic product being tested," says Victoria.

Chinese catfish is also typically a relatively inexpensive product for U.S. buyers. For example, Western Edge's catfish fillets are selling this year for between $2.25 and $2.50 a pound, f.o.b. cold storage, on average, says Victoria. Meanwhile, domestic processors received an average of $2.44 a pound in 2007, down from $2.46 in 2006, according to the U.S. Department of Agriculture's National Agricultural Statistics Service.

In mid-March, domestic boneless, skinless catfish fillets were priced at about $3 a pound for 3- to 5-ounce fillets, while frozen fillets from China were priced in the low- $2 range for 3- to 5-ounce fillets.

In addition, some U.S. suppliers feel the domestic catfish associations and farmers have gone too far in vilifying imported catfish products.

"We have to be careful in the seafood industry as a whole not to turn consumers away from seafood, by scaring them into selecting another protein," says Bryan Elmore, marketing and creative services manager for American Pride Seafoods, which supports domestic and international sourcing.

Instead, when imported catfish supplies began increasing a few years ago, the domestic industry should have stepped up its promotion and marketing efforts.

"As the threat of imports grew, the industry failed to spend more to educate consumers about its product," says Rob Mayo, president of Carolina Classics Catfish of Ayden, N.C.

Carolina Classics differentiates its domestic catfish by stressing its high quality and natural production, allowing its products to be sold by retailers like Whole Foods Markets and at upscale restaurants.

"There are never any antibiotics or farm chemicals used in production, and no land animal or poultry by-products are used in the feed," says Mayo.

 

Imports popular, supply dips

Despite the benefits of domestic product and the issues with China, catfish imports remain fairly steady, say suppliers and retailers.

Figures from the National Marine Fisheries Service show that all catfish imports, including ictalurus and cousin pangasius, are up so far this year, from 26.1 million pounds through March 2007 to 27.2 million pounds for the same period this year. Imports of frozen pangasius fillets from some countries - such as Vietnam and Thailand - increased, while imports from China fell to 2.2 million pounds from 2.7 million pounds.

At the same time, fresh pangasius fillets from China jumped to 620,736 pounds through March, compared to 405,545 pounds last year. Imports of fresh pangasius fillets from Malaysia increased from 253,758 pounds last year to 931,488 pounds this year.

Meanwhile, the U.S. farmed catfish supply dropped in 2007, similar to its foreign imports.

According to the NASS, 496 million pounds of catfish were processed in 2007, down 12 percent from 2006. Suppliers say domestic volume is steady to lower this year.

"Supply has dropped, but the industry remains strong. Catfish will take its bumps along with a rocky economy, but look for new products and improvements to carry catfish through and even beyond the economy strain," says Elmore.

Still, domestic farmed catfish volume has actually increased so far in 2008, notes Barlow of The Catfish Institute. "Processing year-to-date is up 8 percent, with current weekly volume running 10 to 20 percent increases," he says.

 

Domestic promotion uptick

Despite the turmoil regarding imports, there is good news for the catfish industry as a whole, as suppliers expect continued strong consumer demand and an uptick in promotional efforts by the domestic industry.

"This year, an aggressive campaign aimed at the restaurant industry will create opportunities that will enhance a favorable position for U.S. catfish," says Barlow. The campaign will include advertising, public relations, issues management and an increased focus on exports.

The Catfish Farmers of America is heavily targeting the foodservice industry with new POS materials, promotions and participation in events along with the Culinary Institute of America.

Already, ads featuring "Iron Chef" Cat Cora and catfish farmers have appeared in food publications such as Cooking with Paula Deen and Food Arts that will run through the rest of the year.

In addition, consumer catfish demand will be steady to higher this year, according to suppliers and retailers. Because of the high costs facing consumers, they may steer to the relatively inexpensive species.

"Catfish is a mid-priced fish. When the economy is tighter, people can actually afford catfish fillets," says Mayo. In addition, catfish has a mild flavor profile that Americans enjoy, is considered a healthy food, and is often locally produced, he adds.

Also, catfish is a high-protein fish that is low in saturated fat, and contains healthful omega-3 fatty acids.

"Demand for U.S. farm-raised catfish remains strong and will continue to increase, as consumers insist upon a safe and healthy product," says Barlow.

That is one of the reasons promotion of farmed catfish to U.S. consumers has been lacking in recent years: Demand is steady or higher than supply, say suppliers.

"Ocean production is going down and consumption of seafood has increased. The only thing that will meet demand is aquaculture," says Victoria of Western Edge.

Still, retailers and others believe demand would be higher if the U.S. catfish industry had been aggressively promoting its products for several years, like the salmon industry and others have done.

"There hasn't been much of a push by the industry. Because it's a stable-priced item, you would think they'd get behind it more," says Doug Goodman, seafood manager and buyer for retailer Stew Leonard's of Yonkers, N.Y.

The salmon industry provides a Web site, POS materials and other information for retailers, adds Goodman.

Dwaine Stevens, a spokesman for supermarket chain Publix Super Markets based in Lakeland, Fla., says the grocer has noticed a decline in catfish sales since 2006.

"While catfish remains one of our more popular finfish items, it continues to lose ground to salmon and tilapia. Customers are recognizing the health benefits of salmon, and the consistency in performance, taste and appearance of tilapia," says Stevens.

Publix sells U.S. farmed catfish in its fresh seafood cases, and sells basa from Vietnam in its frozen cases.

 

Value-added products increase

Meanwhile, the industry is focusing on other positive characteristics of catfish, including its mild flavor, its ease of preparation and the variety of ways it can be served. While catfish has traditionally been served breaded and fried, the industry is developing new, value-added products.

For example, Carolina Classics offers several marinated and breaded items. "More people are looking for value-added products. One of the challenges for consumers is preparing fish and seafood, so we make it easier for them," says Mayo.

American Pride recently added Deep Skinned Catfish, which features 25 percent less fat than regular catfish, to its line of catfish products. It also sells marinated, breaded, lightly dusted and stuffed crumb catfish.

In addition, Stew Leonard's sells a Cajun-seasoned catfish, prepared by the retailer, for around $6.99 a pound.

 

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

 

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