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Species Focus: Pacific white shrimp
U.S. demand just keeps on growing, as does global production - despite economic and natural setbacks
By Rick Ramseyer
July 01, 2006
Whether they're farm-raised in Asia and Latin America or
wild-caught from the west coast of Mexico to northern Peru,
Pacific whites are burgeoning in popularity, thanks to
ramped-up global production and a lengthening list of U.S.
foodservice and retail customers.
Farmed Pacific whites from Asia are now the only shrimp
served at casual-dining chains like Applebee's and Ruby
Tuesday, while wild-caught and cultivated Mexican white shrimp
are offered at many independent restaurants from coast to
coast.
Major supermarkets and club stores, meanwhile, are sourcing
organic whites cultivated by a fast-track company in Florida,
and at least one regional specialty grocer is seeing Pacific
whites gain favor over black tigers.
Further, in step with the introduction last year of 1-pound
bags of frozen Mexican whites, Ocean Garden - a longtime
foodservice supplier - now has a retail foothold in the Pacific
Northwest and in New England.
U.S. consumers may be hard pressed to tell the difference
between the two most common commercial varieties of Pacific
whites, Penaeus vannamei and P. stylirostris . The meat of
vannamei is creamy white, while stylirostris - farmed mostly in
Mexico and Brunei - has white meat with a greenish or bluish
tint and a taste that's a touch saltier than vannamei.
Pacific whites' higher profile comes at a challenging time
in the shrimp industry. Front and center are
antidumping-related tariffs and continuous bonds that are
impacting the business worldwide.
Moreover, a turbulent monsoon season in Southeast Asia
earlier this year lowered shrimp-farming output in
über-producing countries like Thailand.
Still, seafood representatives are convinced that interest
in Pacific whites and shrimp in general is on an upswing, with
consumption and production both strong.
"Shrimp will continue to rival other center-of-the plate
proteins," says Eric Bloom, president of Eastern Fish Co. in
Teaneck, N.J., which derives up to 75 percent of its shrimp
business from Pacific whites.
And it doesn't hurt that shrimp overall remains the United
State's most popular seafood, with 2004 per-capita consumption
of 4.2 pounds, nearly 1 pound more than second-place canned
tuna.
Production shift
Despite trade-related challenges, shrimp shipments to the
United States remain robust. For the first three months of
2006, imports totaled 274.7 million pounds, up from 247.8
million pounds for the same period the previous year, according
to the National Marine Fisheries Service.
Year-over-year figures also were positive: U.S. shrimp
imports
totaled 1.17 billion pounds in 2005, compared with
1.14 billion in '04.
In step with rising demand, Thailand and other Asian
countries are gradually shifting production from black tiger
shrimp ( P. monodon ) to Pacific whites ( P. vannamei ). And
the reason for that is no mystery: White shrimp, though
generally smaller than tigers, are more resistant to disease,
have higher survival rates, cost less to feed and tolerate
higher stocking densities. And they grow faster.
In Thailand, which accounts for 30 percent of U.S. shrimp
imports, vannamei now constitute 90-plus percent of shrimp
production. Compare that to the ratio in 1994, when Thai output
was evenly split between vannamei and monodon.
Shrimp production in Thailand, though, has taken a hit in
recent months. Wild-shrimp landings fell dramatically, as
fishermen stayed off the water due to high fuel prices. And a
viral outbreak in mid-2005 in freshwater shrimp hatcheries
reduced broodstock supplies, resulting in a projected drop of
nearly 35 percent in farmed freshwater-shrimp production.
Severe weather has been a factor as well. Heavy rain and
flooding early this year across southern Thailand is expected
to lower the country's cultivated-shrimp output by 8 percent,
to 350,000 metric tons, from 2005 to 2006.
U.S. imports of Thai shrimp nonetheless rose 8 percent, to
75.2 million pounds, through the first quarter of 2006, after
Thailand boosted its exports to 30.1 million pounds in March,
up from 19.4 million pounds in February and 25.8 million pounds
in January.
Other countries - including India, China, Indonesia,
Malaysia, Bangladesh and Ecuador - picked up some of the slack
by sending more shrimp to the U.S. market. All told, imports
increased 4 percent, to 181 million pounds, for the first two
months of this year.
Continuous hassle
A major trade issue that altered the global shrimp industry
is tariffs of up to 113 percent, which the U.S. government
slapped on importers from Thailand, China, India, Vietnam,
Ecuador and Brazil in early 2005.
The tariffs stemmed from an antidumping petition filed at
the end of 2003 by the Southern Shrimp Alliance (SSA), a group
representing Gulf shrimp fishermen and processors from North
Carolina to Texas.
But tariffs are just part of the story. Under a policy that
U.S. Customs and Border Protection began enforcing in 2005,
importers must post continuous bonds to help prevent tariff
evasion.
Continuous bonds are calculated by multiplying the value of
a seafood company's imported product from the previous year by
the tariff. So if Company X imported $30 million of shrimp
subject to a 10 percent tariff in 2005, it would post a $3
million bond in 2006, in addition to the $50,000 bond required
under the old policy.
The federal government was set to recalculate the tariff
amounts earlier this year - potentially raising them and, by
extension, increasing the bonds - but foreign shrimp exporters
are instead reaching settlement agreements with the SSA.
The settlements ensure the tariffs remain at the rates the
U.S. Department of Commerce originally set and stave off a
one- to two-year review process for each exporter.
As of early June, with a July 6 deadline looming, SSA had
struck settlement agreements with nearly 30 exporters -
including companies in Vietnam, Thailand and Ecuador - in
effect freezing their duties at the current rates.
For example, Empacadora Gran Mar SA and Negocios
Industriales Real SA, both of Ecuador, and CP Foods of Thailand
will continue paying duties of 3.58 percent and 5.95 percent,
respectively.
In turn, the SSA dropped its requests for administrative
reviews of participating importers. There also was a "financial
element" to the settlements, an SSA spokeswoman told SeaFood
Business last month, declining to reveal how much the exporters
paid SSA (see June SFB , page 4).
With or without the tariff increases, U.S. importers say the
antidumping brouhaha has had a chilling effect on business.
"It's probably reduced our growth by 5 to 7 percent," says
Bloom of Eastern Fish. "We're tying up our money guaranteeing a
bond, rather than utilizing it to buy shrimp, sell shrimp and
make money."
Prices firm
Despite uncertainty surrounding tariffs on imports, shrimp
prices have remained relatively stable.
In late May, headless, shell-on Asian-raised whites held
firm at up to $4.25 for 21-25s, $3.85 for 26-30s, $3.15 for
31-35s, $3 for 36-40s, $2.80 for 41-50s and $2.70 for 51-60s,
according to Urner Barry in Toms River, N.J.
Latin American whites, meanwhile, held steady at up to $4.50
for 21-25s, $3.90 for 26-30s, $3.30 for 31-35s, $3 for 36-40s,
$2.85 for 41-50s and $2.75 for 51-60s.
And wild No. 1 Mexican whites fetched up to $8.90 for U15s,
$6.50 for 16-20s, $5.35 for 21-25s, $4.85 for 26-30s and $4.35
for 31-35s, f.o.b. West Coast, according to Urner Barry.
"Prices had been on the rise for the first half [of 2006],
but I do expect them to ease back down," one East Coast
importer says.
"Even with the continuous bonds, average prices have
remained the same as or lower than those in previous
years."
John Filose, VP of sales and marketing for Ocean Garden
Products in San Diego, says importers are seeing more smaller
sizes, 36s and up, from throughout Asia.
"What we may see going into the second and third quarters is
stable to maybe even firmer pricing in the United States, and
some pressure on the inventories of larger sizes, say, 26-30s
and larger," Filose says.
Ocean Garden's core business is Mexican shrimp, including P.
vannamei and P. stylirostris . The company handles 40 million
to 50 million pounds of wild-caught and farmed shrimp a year,
with the vast majority bound for the United States. Pacific
whites represent 75 percent of the total.
And Mexico's aquaculture output clearly is climbing: For the
2005-06 season, farm-raised shrimp represented 57 percent of
Ocean Garden production, compared with 37 percent for
2000-01.
Pride of Mexico
Uwajimaya, the largest Asian specialty retailer in the
Pacific Northwest, sells about 40,000 pounds of Pacific whites
per year, sourced entirely from Ocean Garden, plus a smaller
number of Asian black tigers.
"Shrimp is one of the backbone items for us," says Kris
Kosugi, seafood merchandiser for the buying arm of Uwajimaya,
which has stores in Seattle and Bellevue, Wash., and in
Beaverton, Ore.
Uwajimaya carries two sizes of Mexican white shrimp in its
full-service seafood cases: a 16-20 shell-on and a 41-50
head-on, "since head-on shrimp is very important in Asian
cooking," Kosugi says.
Moreover, Uwajimaya is among the retailers in the Seattle
area that are testing frozen, 1-pound retail bags of farmed
Pacific whites from Ocean Garden. Available since late 2005,
the bags - carrying the Pride of Mexico brand - come in two
varieties: peeled, deveined, tail-on 26-30s for $10.99 and
shell-on 21-25s for $8.99.
"The 26-30 is the bestseller by 2 to 1," Kosugi says,
"probably based on convenience."
The bags represent a new revenue stream for Ocean Garden,
long known for serving foodservice
accounts.
"The product is more expensive than Asian whites, but it's
very high-quality," Filose says. "We've had a good
response."
That success led to the recent introduction of the Pride of
Mexico retail bags in around 40 Whole Foods markets in New
England.
Ocean Garden also has found the bags are of interest to
traditional foodservice customers.
"One guy told me, 'Hey, this is good for smaller restaurants
that want to buy a smaller amount of shrimp,'" Filose says.
Going organic
Despite all the activity by foreign producers, one U.S.
company is making waves with its Florida-raised, certified
organic shrimp.
Ocean Boy Farms in Clewiston, Fla., grows a domestic variety
of Pacific white, Litopenaeus vannamei . And plenty of big-name
retail customers are stocking it frozen, including Wal-Mart,
Publix, Harris Teeter, Winn-Dixie, Kings and Costco.
"We're in most major chains," says Steve Walton, president
and COO, noting that Ocean Boy is making inroads in foodservice
channels and also sells shrimp directly to consumers via
Costco's Web site. (In early June, Costco had 24 12-ounce bags
of IQF, 31-35 Ocean Boy shrimp priced at $179.99.)
Ocean Boy, one of only two U.S. shrimp farmers that can
label product as organic, will raise more than 3 million pounds
of shrimp in 2006, up from nearly 1 million pounds last
year.
"And we're going to ramp that up quickly, as demand is more
than our supply right now," Walton says.
Ocean Boy shrimp is priced 30 percent to 40 percent higher
than conventional Pacific whites, he adds, given the steep cost
of production. Indeed, the shrimp is grown 60 miles inland in
lined, low-salinity ponds using proprietary processes, systems
and feed.
(The shrimp is certified as organic livestock by a
third-party agent of the U.S. Department of Agriculture. The
USDA is in the midst of developing organic standards for
seafood.)
"[Our protocols] allow us to develop a very healthy profile
for our shrimp," Walton says. "We're focused on ensuring the
taste is consistent, pure and sweet."
Chain reaction
Want further proof of Pacific white's muscle? Casual-dining
leader Applebee's International in Overland Park, Kan., which
franchises and operates more than 1,800 Applebee's Neighborhood
Grill & Bar restaurants worldwide, only sources farmed
white shrimp from Asia.
Applebee's menu varies by location but may include Crispy
Buttermilk Shrimp, Shrimp Fettuccine Alfredo Bowl, Grilled
Shrimp 'N Spinach Salad and Weight Watchers Grilled Shrimp
Skewer Salad. In addition, Tuscan Shrimp Salad is one of the
selections in Applebee's new Salad Perfection lineup.
Ruby Tuesday - another casual-dining giant, with
approximately 825 outlets in 42 states, plus Washington, D.C.,
and Puerto Rico - buys around 2.4 million pounds of shrimp per
year, all of it farmed in China and the Pacific Rim.
"Usage grows every year, because we open about 85 new
restaurants and also have same-restaurant sales increases," a
spokesperson stated via e-mail.
Among the seafood favorites at Ruby Tuesday are the Coconut
Shrimp appetizer and entrée for $7.99 and $12.99, respectively,
and Shrimp Alfredo Pasta for $11.99. Pacific whites also are
part of combos like the Triple Play, a half-rack of barbecued
ribs, fried chicken tenders and fried shrimp for $16.99.
The chain has sourced Pacific whites for at least six years,
but it has been the exclusive species for the last four, the
spokesperson noted. Lots of independent restaurants rely solely
on Pacific whites, too.
"I've been a stickler for white shrimp for most of my
career, spanning about 30 years," says Allan Katz,
chef-proprietor of Allyn's Restaurant and Café in Millbrook,
N.Y.
"The taste is just [superior]."
And Katz gets plenty of mileage from the 600 pounds of
Mexican whites he purchases annually, whether it's peeled IQF
shrimp for lunchtime salads or six sautéed jumbo shrimp for a
$22.95 dinner
entrée.
Doug Kracht, purchasing agent for the Hubbell House in
Mantorville, Minn., and Michael's in Rochester, Minn., is also
a fan of Pacific whites.
"I've been here 37 years, and we were using wild Mexican
whites probably for 15 years even before that," Kracht
says.
Together the two restaurants use about 350 50-pound cases of
U15s and 200 cases of 16-20s per year.
"I like the firmness, the sizing and, of course, the taste,"
Kracht says. "Our customers know they are going to get good
shrimp here."
Contributing Editor Rick Ramseyer lives in Cumberland,
Maine