« June 2008 Table of Contents 
Top 10 Species: Catfish
U.S. farmers, processors struggle, importers defend Chinese product
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.