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Aquaculture Outlook Report - March 2005

by 5m Editor
13 May 2005, at 1:00am

By U.S.D.A., Economic Research Service - This article is an extract from the March 2005: Aquaculture Outlook Report, highlighting Global Aquaculture Industry data.

Aquaculture Outlook Report - March 2005 - By U.S.D.A., Economic Research Service - This article is an extract from the March 2005: Aquaculture Outlook Report, highlighting Global Aquaculture Industry data. USDA Economic Research Service

U.S. Aquacultural Production Higher in 2005

Domestic aquacultural production is expected to increase in 2005 due to a relatively strong domestic economy, a weaker dollar relative to some other currencies which is expected to help exports, and higher livestock and poultry prices, especially in the first half of the year. Imports of farm-raised seafood are expected to expand in 2005. However, the rate of growth should be much slower than in the past several years, and a weaker dollar will make imported products more expensive.

Grain prices are expected to be considerably lower in 2005, which will provide lower feed prices to those aquacultural species that utilize grains in their feed formulations. For many species, such as catfish, feed costs are one of the largest components of total production costs, so lower feed costs are expected to help lower production costs. Other species such as trout, tilapia, and shrimp also use grain products to make up a significant proportion of their feed. Farmed production of mollusk species, such as mussels, clams, and oysters, do not utilize feeds, but rely on naturally occurring foods in the bodies of water at the production site.

While a number of different grain products are used in aquacultural feeds, the primary ones are corn and soybean meal. In 2004 the average prices for these products rose considerably, especially in the first half of the year. The forecast for corn and soybean meal in 2005 is for much lower prices through the first three quarters, with the gap in year-over-year change narrowing in the fourth quarter. While lower prices will reduce production costs for many aquacultural producers, they will also reduce production costs for livestock and poultry producers that provide competing products.

The outlook for domestic aquacultural production and trade in aquaculture products in 2005 is based on a number of factors. First, U.S. economic growth in 2005 is expected to be relatively strong, boosting restaurant sales. Restaurant sales are especially important for seafood as a higher percentage of seafood consumption comes from away-from-home consumption. Second, the dollar is expected to be relatively soft against a number of currencies, making U.S. imports more expensive and making exports more competitive. Third, higher prices for a number of aquacultural products in 2004 are expected to provide an incentive to increase production in 2005.

U.S. production of pork is expected to be up less than 1 percent in 2005, and prices for pork products are forecast to be higher during the first half of 2005 than they were a year earlier. After falling in 2004, U.S. beef production is expected to increase about 4 percent in 2005, bringing it almost back to the production level of 2003. Beef prices through most of 2005 are expected to be below those of 2004. Broiler production is expected to increase by 3 percent in 2005. Wholesale broiler prices are expected to gradually strengthen during the year, with prices in the second half of the year being higher than in the same period in 2004. Somewhat higher pork and broiler prices are expected to provide some additional demand for seafood products.

Catfish Sales and Prices Higher in 2005

Catfish sales by farmers to processors are expected to increase only slightly in 2005, staying between 630 million and 640 million pounds. Based on grower estimates of inventories at the beginning of January 2005, grower sales are expected to be slightly lower during first-half 2005 compared with a year earlier, with stronger growth in the second half of the year. Although the quantity of grower sales is expected to increase only a small amount, grower prices in the first quarter are expected to be higher than in first-quarter 2004.

Grower sales of catfish in 2004 were down 5 percent, but prices increased 20 percent to almost 70 cents per pound. Prices started 2004 well above the depressed levels of a year earlier and continued to be strong through the remainder of the year. Grower sales to processors totaled 630.5 million pounds in 2004, down about 30 million pounds from 2003 and about even with the amount sold in 2002. Processor sales fell by about 13 million pounds to 307 million pounds, which is 4 percent lower than in 2003. Sales by processors were below those of the previous year throughout most of the year. Processor-held inventories of finished products at the end of January 2005 were 14.6 million pounds, about 1.9 million pounds higher than the same time a year earlier.

Although there were declines in both grower and processor sales, the fall in sales at the processor level was somewhat offset by an increase in average price. Farm prices began 2004 above those of 2003 for the same period. However, farm prices remained relatively strong throughout the year, never dropping below 68 cents per pound. The average for 2004 was 69.6 cents per pound, up 11.5 cents from the previous year. This price strength has carried over to January 2005, where farm prices were 72.5 cents per pound, 5.7 cents a pound higher than a year earlier and the second highest they have been since October 2000. Processor prices were also higher throughout 2004. The weighted average price for all processed catfish products in 2004 was $2.23 per pound, up 18.3 cents per pound from 2003.

Figure 1: Catfish farms sales


Figure 2: Catfish farm prices

Grower sales in the first half of 2005 are expected to be influenced by grower inventory levels, the overall domestic economic performance, and prices for competing red meat and poultry products. Prices of red meat and poultry are expected to be mixed in 2005. Cattle and hog prices are expected to average higher than a year earlier in the first quarter, but then be lower for the rest of 2005. Poultry prices are expected to be slightly higher throughout the year. The higher broiler prices are expected to help catfish prices move upward. Farm prices for catfish are expected to remain slightly higher than their year-earlier level through most of 2005. If meat and poultry prices start to weaken towards the end of 2005, catfish prices are likely to move closer to their year-earlier levels. Average grower prices for 2005 are expected to be up from the previous year, but remain below the mid- 70-cents-per-pound levels seen in 1999 and 2000.

In 2004 corn and soybean meal prices were considerably higher than in previous years. Corn prices rose about 20 cents per bushel and soybean meal increased by $38 per ton. Prices for corn and soybean meal are expected to drop sharply in 2005. Corn prices are forecast at less than $2 per bushel which would be the lowest it has been since 2001. Soybean meal prices are forecast in the low $160s per ton, down over $70 per ton from the previous year. With these lower prices, catfish feed prices are expected to decline, which should reduce pressure on grower margins.

Catfish Production Expected Slightly Higher in 2005

Grower inventories at the beginning of 2005 showed a lower number of fish in all of the different size categories. The National Agricultural Statistics Service (NASS) Catfish Production report contains grower inventory estimates as of January 1 and is the only report that includes data from States other than the four largest producing States (Mississippi, Alabama, Arkansas, and Louisiana). Catfish growers indicated that at the start of 2005, the number of broodfish, fingerlings, stockers, and small, medium, and large food-size fish had all decreased relative to the previous year.

This reduction is a response to the low farm prices in 2002 and 2003. While the number of fish held by growers was down in all the categories, most of the declines were much smaller than in the previous year, reflecting the stronger farm prices in 2004.

This is the third consecutive year where the estimated grower inventory of all foodsize fish has declined. At the start of 2005, the total number of food-size fish held by growers was estimated at 344 million, down 4 percent from the previous year.

The reported grower holdings of small food-size fish were 240 million fish and are 1 percent less than at the start of 2004. The number of medium food-size fish at the start of 2005 was estimated at 94 million fish, down about 11 million from the start of 2004. Holdings of large food-size fish were also lower, but the large food-size category accounts for only a small percentage of food-size fish in inventory. The lower inventory numbers of all food-size fish was chiefly due to cutbacks in the four major producing States. The number of small, medium, and large food-size fish have all fallen for two consecutive years. Grower holdings of the small foodsize fish and medium food-size fish will make up the bulk of the fish sold by growers during the first 3 to 4 months of 2005.

This means that catfish processors will likely have a smaller number of fish available for processing during this time period, which is expected to put some upward pressure on prices. For small foodsize fish, most of the decrease in grower inventory are from drops in the number of fish held by growers in Alabama and Arkansas. Over the last 2 years the estimated inventory of small food-size fish in Alabama has declined by 10 million fish or 19 percent. Inventory numbers for small food-size fish had increased in Arkansas in 2004, but in 2005 inventory holdings were down 18 percent. Inventory estimates rose for Louisiana and Mississippi at the beginning of 2005. The reduction in inventory of small food-size fish held by growers is expected to result in continued price strength on a year-over-year basis during the second quarter and into the third quarter.

The inventory of all food-size fish held by growers at the beginning of each year represents the bulk of readily available catfish for processing during the first half of the year. With a decrease in the overall inventory of food-size fish, higher expected prices for poultry, and expected higher prices for a number of imported seafood products, farm prices for catfish are expected to slowly move higher, although there is likely to be some fall off in prices after the first quarter.

The January 1, 2005, inventory estimate for stockers showed a 23-percent decrease following a 10-percent increase the previous year. At 655 million fish, the estimate for the beginning of 2005 is down 200 million from the previous year and 120 million from the estimate at the start of 2003. The number of fingerlings in inventory at the start of 2005 was 704 million, about 23 million less fish than at the start of 2004. Stockers and fingerlings in inventory at the beginning of the year will provide the bulk of the fish that will be sold to processors in the second half of the year.

With decreases in both the stocker and fingerling inventories, the supply of catfish of market size for processing is expected to remain relatively tight throughout 2005. With farm prices in January 2005 almost 6 cents per pound higher than a year earlier, growers will likely push as many fish to market as soon as possible. This may reduce price increases during the first and into the second quarter, but later in the year prices are expected to be pressured as a smaller number of fish are available for processing.

Farm Prices Higher in 2005

Lower inventory holdings by farmers, lower stocks of fish held by processors, and a reduction in imported catfish over the first half of 2004, all combined to place upward pressure on prices. Over the first half of 2004, farm prices averaged 70.5 cents per pound, 21 percent higher than the previous year. Prices then remained strong through the second half of 2004, although the price difference between 2003 and 2004 narrowed somewhat in the fourth quarter. Expectations for 2005 are for continued strong prices during most of the year due to tighter supplies of fish. However, the high stocks of processed catfish products held by processors at the start of the year is expected to place downward pressure on processor prices until inventories can be worked down to a lower level.

During 2004, farm sales to processors totaled 630.4 million pounds, a decrease of 5 percent from 2003. With this level of sales and an average price of 69.6 cents per pound, the implied gross sales by catfish farmers was $439 million, up $54 million (14 percent) from the previous year. Gross revenue had fallen in both 2002 and 2003. Including sales of other products (broodfish, stockers, and fingerlings) and sales to outlets besides processors, catfish growers reported total sales of $480 million in 2004, up 13 percent from 2003s $425 million. A combination of a small increase in the volume of farm sales and a small increase in farm prices are expected to increase gross revenues from farm sales of catfish to processing plants in 2005.

Pond Acreage Down

The NASS Catfish Production report indicated that during the first half of 2005 growers would have approximately 170,000 acres of ponds in catfish production. This is down about 5,000 acres from the previous year and is the third consecutive year that acreage has decreased. Acreage has fallen with some smaller growers exiting the business in response to low farm prices in 2002 and 2003. Estimated pond acreage for the first half of 2005 is lower for food-size fish, fingerlings, and broodfish, but lower acreage for food-size fish accounts for most of the reduction.

Almost all the decrease in food-size fish pond acreage came in Arkansas and Louisiana, as acreage was only down slightly in Alabama and acreage actually increased a small amount in Mississippi. In addition, growers indicated that the amount of pond acreage they expect to rebuild and new pond acreage to be constructed were both higher than in the previous year. The slightly higher pace of renovation and new construction is likely the result of stronger prices in 2004 and the forecasts for lower grain prices in 2005.

Processor Revenues Up 5 Percent

With a 4-percent decrease in sales volume and a 9-percent increase in the average price, gross processor revenues from catfish sales in 2004 totaled $686 million, up about 5 percent from 2003. During 2004, catfish processors sold 306.8 million pounds of product, down 4 percent from the previous year. For 2004, the weighted average price for processed catfish products was $2.24 per pound, up 18 cents per pound or 9 percent from 2003. While up from a year earlier, the weighted average price of catfish products in 2004 was about even with the average from 2001 and much lower than in 1999 and 2000, when average prices were $2.34 and $2.38 per pound. The increase in the average price for catfish products was due to increases in the prices for both fresh and frozen products. With the expectation of a small increase in sales and relatively strong processor prices, total gross processor revenues are expected to reach close to $700 million in 2005.

Figure 3: Catfish processor prices

Processor sales levels were generally lower on a year-over-year basis for almost all of 2004. Frozen catfish fillet sales are the most important product for the catfish processing industry. Overall sales of fresh fish products totaled 117 million pounds in 2004, down 7 percent from the previous year, but frozen whole catfish sales were down only 2 percent in 2004. Frozen fillet sales declined 2 percent in 2004 and sales of these products have declined in 4 of the last 5 years. Over the last several years, processors have claimed that frozen fillet sales have been hurt by imports. The majority of the decrease in frozen product sales was due to lower fillet sales, but sales of whole frozen fish also were lower. However, sales of other frozen catfish products were up 3 percent and have risen for the last 8 years.

While the overall sales volume for catfish products fell in 2004, prices for most all catfish products increased. The weighted-average price for fresh catfish products rose 12 percent to $2.23 per pound and is the highest since 2000. Prices for fresh whole fish were $1.56 per pound, up 15 percent. Prices were also higher for frozen catfish products. Frozen whole fish averaged $1.95 per pound, up 6 percent from the previous year. Prices for frozen filleted catfish averaged $2.62 per pound, up 9 percent. Prices for frozen other catfish products reached $1.46 per pound in 2004, an increase of 2 percent. Prices for frozen other catfish products had fallen during the previous seven consecutive years.

The overall outlook for catfish producers in 2005 is positive, and there are a number of factors that should be positive for catfish prices and returns. With lower inventories at the start of the year, farm supplies of catfish are expected to be relatively tight through most of the year. On the input side, feed costs are expected to be considerably lower than in 2004 and are expected to lower production costs.

Figure 4: Catfish imports

Also, the domestic economic growth is forecast to be relatively strong, which should in turn boost sales at restaurants. Partly offsetting these positive factors will be higher prices for energy and maybe continued strong imports. Gas and diesel prices have already risen during 2005, and prices for natural gas and electricity will also increase. Fuel and electrical prices impact growers through higher costs for general machinery operations and running aeration and pumping equipment. One unknown factor is what will happen to imports of catfish products. Over the first half of 2004 import quantities were low, but during the second half of the year they jumped up considerably. Continued strong imports would put downward pressure on prices.

Trout Production Higher in 2004

The NASS Trout Production report had sales of domestic trout products, including eggs, in 2004 estimated at $68.7 million, up 7 percent from the revised estimate of $64 million the previous year. This is the first year that overall trout sales have increased after falling the last four consecutive years. The NASS survey covered 365 commercial firms that sold trout products. In addition to the commercial trout farms surveyed, the survey also got data from 271 operations that distributed trout in 2004. The operations distributing trout are doing so for restoration, conservation, or recreational fishing, and many are State or Federal hatcheries. The estimated value of the fish distributed from these operations was $64.8 million in 2004 and is separate from the figures given for the value of trout sold from commercial operations.

Sales of trout increased in three of the four segments of the commercial trout industry. Sales of food-size trout totaled $57.1 million in 2004, up 8 percent from the previous year. The increase in sales was the result of a greater amount of foodsize trout being sold, as the average price remained the same at $1.04 per pound. In terms of the trout farmers survey, food-size fish are those 12 inches or more in length. Trout prices are influenced by other farm-raised fish such as catfish, and they are also impacted by overall tilapia and salmon supplies. Most of the increase in 2004 came from higher production in Idaho, the largest producing State. Trout production in the other major producing States (California, North Carolina, Pennsylvania, and Washington) was all lower in 2004.

Sales of stockers (fish 6 to 12 inches) totaled 2.2 million pounds with a value of $5.8 million in 2004. This is a slight decrease in the total weight of fish sold, but average prices were up 13 cents per pound to $2.63. Stockers are sold to both other trout farmers (for further growout) or private groups, or State governments for recreational purposes. Many of the trout distributed by State and Federal hatcheries are stocker fish being placed in public waters.

Sales of trout fingerlings, fish less than 6 inches, are normally in units of a thousand fish. In 2004 the total number of fingerlings fell to 5.6 million fish, down 25 percent from 2003. Not only have the number of fish sold decreased, but the total live weight of fingerlings sold also fell as the average weight of a thousand fish decreased by 18 percent. Overall sales of fingerlings by commercial trout producers totaled less than $1 million, down from $1.2 million the previous year.

Sales of trout eggs rose by almost $650,000 to $4.8 million in 2004, an increase of 16 percent from a year earlier. The sales increase was due to both an increase in the number of eggs sold (up 10 percent) and higher prices (up 6 percent). Almost all the egg production is concentrated in Washington State, with only a very small amount being produced in the rest of the United States.

For a number of trout producers water availability will continue to be a major problem. This is especially true of producers in Western areas that have now seen drought conditions for several years. Over the last several years lower prices for imported farm-raised fish and domestic catfish products have placed downward pressure on trout prices. However in 2005, trout producers are expected to benefit from stronger catfish prices. Salmon prices are also expected to increase due to a weaker dollar relative to the euro. The trout industry is also expected to benefit from a relatively stronger domestic economy and higher prices for a number of competing meat products, especially during the first half of 2005.

International Outlook: Tilapia Imports Continue To Surge

U.S. tilapia imports surged to 249 million pounds in 2004, up 25 percent from 2003 and 68 percent higher than in 2002. The value of tilapia imports rose almost as fast, climbing to $297 million in 2004, 23 percent higher than the previous year and 71 percent higher than in 2002. Tilapia imports have increased as the demand for a relatively low-priced white-fleshed fish to include on menus at food service establishments and restaurants has expanded and people have become more familiar with the species.

Once again the volume of imported tilapia products increased in all three major product segments. Over the last 2 years imports of tilapia have grown by 100 million pounds with about half of that increase coming from higher imports of frozen fillets. The remaining 50 million pounds of additional imports were divided between whole frozen products (35 million pounds) and fresh fillets (15 million pounds). In 2004, imports of filleted tilapia products accounted for about 50 percent of total tilapia imports. Since fillets are only a relatively small percentage of a fishs total weight, the amount of foreign tilapia production required to supply the U.S. market in 2004 was about 500 million pounds of live fish.

Since 1993, the first full year that tilapia imports were reported separately, the value of tilapia imports has grown from $18 million to almost $300 million in 2004. Most of the increase in value over this time span has been due to a higher quantity of imports, but in 2004 for the first time imports of fillets (fresh and frozen) accounted for about 50 percent of the imports. Just like the Atlantic salmon market, the fastest growing segment of tilapia imports has been frozen fillets. Over just the last 2 years, the quantity of frozen fillet imported rose by 183 percent. In 2004, filleted products accounted for almost 80 percent of all tilapia imports on a value basis.

Figure 5: Tilapia imports

Almost all tilapia imports come from aquaculture operations, with different countries being major suppliers in the different segments of the tilapia market. With the continuing growth in demand for tilapia in the United States, imports from most countries have grown over the last several years. However, the majority of the growth has come from a small number of countries that are large suppliers of a number of aquaculture products. China now supplies over half of all tilapia products imported into the United States. While it has always been a supplier of frozen whole product, over the last several years it has become by far the largest supplier of frozen tilapia fillets, accounting for 77 percent of the imports in 2004.

Ecuador has been a large shrimp producer for years, but has built up its capacity to supply tilapia products as a mean to diversify its aquaculture production. It concentrates its sales to the United States in the fresh fillet segment of the market where it has a transportation advantage over China. Exports from these two producers are expected to expand in the future as the market for tilapia products grows. While shipments from China account for a large percentage of frozen whole tilapia imports, most of its future expansion is expected to come in the frozen fillet segment of the tilapia market.

After falling for the last 2 years, imports of tilapia from Taiwan rose to 61 million pounds in 2004, up 23 percent from the previous year. Shipments from Taiwan were higher in the whole frozen segment and the frozen fillet segment of the market. For a number of years Taiwan had been the largest supplier of whole frozen tilapia. However, in 2004, while Taiwan was still the second largest supplier to the United States of tilapia products, its shipments were less than half as large as those from China. While Taiwan is not expected to regain its former position as the largest supplier to the United States, it has been lowering its frozen fillet prices to stay competitive with China. Over the last 2 years average prices for imported frozen fillets from Taiwan have fallen from $1.82 a pound in 2002 to $1.49 a pound in 2004.

The volume of imported fresh tilapia fillets rose to 47.2 million pounds in 2004, up 19 percent from 2003. The value of this segment has also been expanding, with shipments in 2004 valued at $121 million, up almost $20 million from the previous year. Average prices for fresh fillets have been decreasing gradually, but considering the expansion in the amount of product imported, prices have stayed relatively strong. Ecuador accounted for 48 percent of the imports in this segment of the tilapia market in 2004. Imports from Honduras and Costa Rica accounted for 38 percent of fresh tilapia imports. With shrimp prices continuing to decline, aquaculture producers in these countries will have an incentive to switch to tilapia production, which is likely to boost production and lower prices.

The frozen fillet segment of tilapia imports has been the fastest growing one. In 2004, imports of frozen tilapia fillets totaled 76.5 million pounds, up about 25 million pounds (49 percent) from 2003. These imports were valued at $114 million, 36 percent higher than the previous year. As with a number of farm-raised seafood products, the price for frozen fillets has been gradually falling, even though imports have been rising very rapidly. The frozen fillet segment is dominated by Asian countries, with imports from Thailand, Indonesia, China, and Taiwan accounting for almost all of the shipments. Most of the growth in the last several years has come from China. Over the last 2 years, shipments from China have risen from 13 million pounds to over 59 million pounds. Chinese frozen tilapia fillets averaged

$1.37 per pound, down 10 cents per pound from the previous year and 20 cents per pound from 2002. In 2005, shipments from Asian countries are expected to grow as producers have an incentive to switch acreage away from shrimp production. While China is the dominant supplier, exports from Thailand and Indonesia have increased, and there must be some quality or species difference in their products as imports from these two countries cost considerable more per pound than imports from either Taiwan or China.

With the U.S. economy expected to be stronger in 2005, higher demand for tilapia imports in the food service and restaurant markets is expected to bring about an additional increase in imports, but the increase is expected to be less than in past years. Total tilapia imports are expected to reach between 275 million and 290 million pounds on a product-weight basis, or about 550 million pounds on a liveweight basis. The value of imports is expected to reach between $320 and $340 million. The average import price is expected to decrease slightly in 2005. Prices for the individual segments of the tilapia market are not expected to increase due to strong competition among producers. In the fresh and frozen fillet segments, higher production is expected to put downward pressure on prices as countries try to capture a larger share of the market.

Atlantic Salmon Imports Fall in 2004

U.S. Atlantic salmon imports in 2004 totaled 394 million pounds with a value of $871 million. This is a 5-percent decrease in quantity and value from 2003. After increasing 253 percent from 1996 to 2003 (fig. 6), shipments were lower due primarily to declines in imports from Norway and the United Kingdom. After rising by 23-cents-a-pound in 2003, the average import price of all Atlantic salmon products remained at $2.21 per pound in 2004.

Figure 6: Imported Atlantic salmon

The decrease in the amount of salmon imported showed up in all three segments of the Atlantic salmon market. Over the last several years prices for most farmed salmon products have fallen, lowering any incentive for farmers to expand production. Import quantities were also held down by the dollar falling in value relative to the euro. Most of the decline in shipments came from producing countries that could divert sales to a stronger European market. However, U.S. salmon imports were helped by high prices for most livestock products during the first half of 2004. With the dollar continuing to be lower relative to the euro, salmon imports in 2005 are expected to increase only modestly in quantity. Salmon prices are expected to stay steady or increase slightly as importers have to increase prices to bid product away from the European market.

Domestic production accounts for only a small percentage of the total salmon supply in the United States. Most domestic salmon in the United States comes the from wild harvest salmon supplied by Alaska or Canada or from imports of farmraised salmon. The only two States with any significant production of farmed salmon are Maine and Washington.

In 2004, imports of fresh whole Atlantic salmon fell 8 percent to 121.7 million pounds, the second consecutive year these imports have fallen. Imports of frozen whole Atlantic salmon also fell in 2004, but imports of frozen whole products are only a small portion of total Atlantic salmon imports. In 2003, declines in imports of fresh whole salmon were offset by increases in the amounts of fresh and frozen fillets being imported. However, after increasing rapidly in the previous 2 years, imports of filleted products declined in 2004 by 3 percent to 264.6 million pounds.

While this is down from the previous year it is still the second largest yearly imports of fresh and frozen fillets. With the declines in imports of fresh and frozen whole salmon, filleted imports are now even a larger proportion of total Atlantic salmon imports. In 2004, imports of filleted products accounted for 67 percent of all imported Atlantic salmon products on a quantity basis and 70 percent on a value basis. The average import price for filleted products in 2004 rose to $2.30 per pound. Over the last 2 years, the average import price for fresh and frozen fillets has risen by 33 cents per pound. The increase in the average price for filleted Atlantic salmon product was helped in the first half of 2004 by strong prices for competing meat products.

Canada and Chile are the dominant suppliers of Atlantic salmon to the U.S. market, but Chile is continuing to gain market share. In 2004, imports from Chile accounted for 60 percent of all Atlantic salmon shipments to the United States. While total shipments of fresh and frozen fillets declined in 2004, exports from Chile rose 1 percent to 230 million pounds. The average import price for fresh and frozen fillets from Chile averaged $2.17 per pound, an increase of 40 cents per pound over the last 2 years. So while the total value of imported fresh or frozen Atlantic salmon fillets fell 2 percent in 2004, the value of Chilean product rose 3 percent to $498 million.

With its advantage in proximity to the U.S. market, Canada dominates shipments of fresh whole fish, its exports in this segment of the market rose 6 percent in 2004, to 94.6 million pounds or 78 percent of the total. However, the average price for Canadian products fell 21 cents per pound, so the total value of fresh whole salmon imports from Canada declined 4 percent from 2003, and was 25 percent lower than in 2002. With Canadian imports only falling slightly and imports from Chile rising, the decrease in overall Atlantic salmon imports was due primarily to lower shipments from Norway, the Faroe Islands, and the United Kingdom. With a weaker dollar relative to the euro, producers in these countries had more of an incentive to market their products in Europe rather than ship them to the United States. For each of the countries the average price of their shipments to the United States rose strongly in 2004, with average prices for products from Norway up 34 cents per pound and average prices from the United Kingdom up 26 cents per pound.

Even with U.S. economic growth in 2005 forecast to be relatively strong, imports of Atlantic salmon are not expected to expand greatly. Shipments in 2005 are expected to be near the 400-million-pound level and value is expected to remain close to where it was in 2004. Higher demand for salmon products due to health and dietary factors is expected to be offset by the continued weakness of the dollar relative to the euro, which makes imports into the U.S. market more expensive. Also, lower prices for a number of meat products are expected, especially in the second half of 2005.

Shrimp Imports: Value and Volume Higher

The volume of imported shrimp continues to set records. In 2004, total shrimp imports were 1.1 billion pounds, up 2 percent from 2003 and 21 percent higher than in 2002. However, with an additional decrease in the average price, the value of imported shrimp declined to $3.7 billion in 2004. This is down 2 percent from the record $3.8 billion set in 2003. The average price for imported shrimp products has fallen for four consecutive years, going from $4.94 per pound in 2000 to $3.23 per pound in 2004. With an import value of $3.7 billion, the United States spends over $12 per person annually on shrimp imports at the import level. At the retail level, the average per capita amount spent on imported shrimp is at least twice that amount.

Figure 7: U.S. shrimp imports

In 2004, the increase in shrimp imports was due to larger shipments of processed shrimp products, which rose 15 percent. Increased shipments in this segment of the shrimp market offset slight declines in imports of frozen and fresh shrimp. The increase in shipments in the prepared segment of the shrimp market offset a decline in price so that the value of imports in this segment rose 7 percent to $821 million. Over the last 2 years the average price of imports in the prepared shrimp market segment have declined 52 cents per pound to $3.08 in 2004. Prices also declined in the other two segments of the shrimp import market.

Of the eight largest countries exporting shrimp to the United States in 2004, three showed strong increases in volume which helped to partially offset declines in shipments from other countries. Although it is hard to measure the impact of the tariffs that have been placed on frozen shrimp imports from a number of countries, several of the countries that increased their shipments to the United States in 2004 were countries where tariffs had not been placed on their exports.

Although total shrimp imports to the United States increased slightly in 2004, imports from Mexico, Bangladesh, and Indonesia all rose substantially. Imports from Mexico are almost exclusively in the frozen segment of the shrimp market and tend to be heavily weighted towards larger shrimp. As a result, imports from Mexico in 2004 averaged $5.12 per pound, by far the highest average price for any of the major shrimp suppliers, but down 11 cents per pound from the previous year.

While Mexico does have a shrimp farming industry, a large percentage of its production comes from wild harvest. Bangladesh is somewhat like Mexico in that almost all its shipments to the United States are in the frozen shrimp segment, and imports from Bangladesh are weighted towards larger shrimp. In the case of Bangladesh much of their imports come from shipments of fresh water prawns, most of which are farm raised. In 2004, shipments from Bangladesh were 38.3 million pounds, which was up over 100 percent from 2003. Even with a 2-percent decrease in the average import price, the total value of shipments from Bangladesh rose from $82.8 million in 2003 to $173 million in 2004. Shrimp imports from Indonesia are also mostly in the frozen segment, but unlike Mexico and Bangladesh, imports from Indonesia are not large shrimp so that the average price is considerably lower. Average prices for shrimp imports from Mexico were over $5 per pound, the average price for imports from Bangladesh were $4.50 per pound, but shrimp exports from Indonesia were only $3.28 per pound, and this was down 24 cents per pound from 2003. A fairly large percentage of Indonesias production is farm raised.

In 2003, Thailand, China, and Vietnam were the three largest shrimp suppliers to the United States, accounting for 54 percent of total shipments on a quantity basis. In 2004, shipments from all three of these countries declined as a weaker dollar made other markets more attractive. In addition, the average price for shipments from Thailand and China also declined, further lowering the value of their shipments to the United States. Exports from Thailand declined to 291 million pounds in 2004, this is only a slight decline from the previous year, but the average price fell by 41 cents per pound in 2004, and this follows a 45-cent-per-pound decline in 2003 versus 2002. The decline in shipments in 2004 was due to falling exports of frozen shrimp, as Thailands exports of prepared shrimp rose. Imports from China had been the fastest growing of the major suppliers. After growing by over 70 million pounds in 2003, Chinas shipments fell in 2004 to 145 million pounds, a decrease of 34 million pounds. The average import price of shrimp from China has also dropped significantly. In 2004, the average price was $2.32 per pound, down 15 cents per pound from 2003 and 41 cents per pound from 2002. Producers in Vietnam also saw their shipments to the United States fall in 2004. The quantity of shipments declined by 35 percent and was only offset slightly by a 2-cent-per-pound increase in the average price to $4.72 per pound.

In the shrimp market there are a number of factors at work. Since 2000, the average price of shrimp being imported into the United States has fallen by $1.71 per pound or 35 percent. While improvements in shrimp farming technology are expected to gradually lower production costs, with strong price declines such as these, there may be a point at which growers will either cut back production or at least stop expanding. There was a similar strong drop in the price of imported Atlantic salmon products and it quickly reduced the incentive for producers to expand production. As a result, over the last 2 years import quantities and prices for Atlantic salmon have begun to stabilize. The shrimp industry may be at or rapidly approaching a similar turning point. Complicating the situation is the large number of nations producing shrimp products through wild harvest or farming. In many of these countries the government has backed shrimp production as a means of boosting foreign exchange earnings and it may be hard politically to cut production. In addition, a weaker dollar and tariffs on imports from a number of the major suppliers will make imports generally more expensive.

In 2005 the quantity and value of shrimp imports are expected to change very little. While a number of factors may work towards higher prices, they are expected to be partially offset by a relatively strong domestic economy. This is expected to boost food service sales, which serves as the prime outlet for shrimp consumption.

Clam and Oyster Exports Higher Again in 2004, Mussel Exports Down

The quantity of clam and oyster exports rose strongly in 2004, the second consecutive year of strong increases. Oyster exports led the way with an increase of 29 percent to 7.5 million pounds. Prices for oyster exports were slightly higher than in the previous year, which led to a 33-percent increase in the value of oyster exports to $17.2 million. Canada is the largest market for U.S. oyster products and in 2004 was the destination for 66 percent of U.S. oyster exports on a value basis. U.S. clam exports also increased strongly to 5.8 million pounds, up 44 percent from the previous year. The average price of clam exports fell somewhat in 2004, but the value of clam exports rose 35 percent to $10.9 million. Canada is also the largest market for U.S. clam exports, accounting for 81 percent of total exports on a value basis.

U.S. mussel exports dropped to less than 1 million pounds, 32 percent lower than the previous year. The decrease in exports is not as much a result of lower foreign demand as it is of rapidly increasing domestic demand and the fact that domestic production falls far short of meeting domestic demand. Over the last several years domestic mussel production (2004 production is not yet available) has been increasing, and prices have also been rising due to strong demand. Maine is the largest domestic mussel producer, and output from Maine has increased by over 50 percent between 2000 and 2003, however the value of Maines mussel production has risen by 326 percent during the same time period. With total production of less than 5 million pounds, domestic mussel production is only about one-tenth of the amount imported.

The outlook for 2005 is for continued growth in clam and oyster exports as the dollar is forecast to be slightly weaker against a number of foreign currencies, making U.S. exports relatively less expensive. Possibly offsetting this advantage due to exchange rates will be growth in the domestic economy that may keep more domestic production in the United States. With strong domestic demand, U.S. mussel exports are expected to remain small in 2005.

Mussel and Oyster Exports Expand, Clam Imports Fall

The quantity of mussel and oyster imports both increased in 2004, up 18 and 4 percent. The quantity of clam imports has risen for the last 4 years. The largest category of oyster imports is prepared oyster products, which accounted for 67 percent of all oyster imports on a quantity basis in 2004. The quantity of mussel imports had fallen in 2003, but the longer term pattern has been for strong growth, and imports in 2004 reached a record 50.9 million pounds. Ten years earlier, imports of mussels had been averaging around 25 million pounds annually. This increase in import quantity has come without any decline in average value. Over the last 4 years the average import price for mussels has been between $1.08 and $1.10 per pound. The growth in mussel imports has come from products from Canada and New Zealand. Canada supplies most of the live imported mussels, and New Zealand is the chief supplier of prepared and frozen mussel products.

Clam imports have gone up and down over the past several years with no clear pattern of growth or decline. In 2004, clam imports totaled 7.9 million pounds, down from the previous year but higher than in 2002. Canada is the largest supplier of clams to the United States, accounting for 24 percent of the total in 2004. Oyster and clam imports in 2005 are expected to remain relatively stable, with any increase in demand being offset by a weaker dollar, making the United States a less attractive market. Mussel imports in 2005 are expected to increase due to a continuation of demand growth, especially through restaurants.

Ornamental Fish Imports and Exports Increase

U.S. exports of ornamental fish increased 2 percent to $8.7 million in 2004. This is the third consecutive increase in exports after several years of decline. During 2004, domestic producers were helped by the fact that a weaker dollar made U.S. exports more price-competitive. Canada remains the largest market for U.S. ornament fish sales. In 2004, sales to Canada were up 5 percent to just over $4 million. However sales to Mexico fell by almost $1.3 million after increasing strongly in 2003. Offsetting the decline in shipments to Mexico were higher exports to the European Union-25 (EU) and Asia. With a stronger euro relative to the dollar, ornamental fish exports were up to most EU-25 countries. Most of the shipments to the EU-25 were to the United Kingdom, the Netherlands, France, and Germany. Shipments to the largest Asian markets (Hong Kong, Taiwan, and Japan) were all up strongly in 2004.

Normally a weaker dollar would result in an increase in exports and would depress imports, however, the value of imported fish rose 6 percent to $43.8 million. This is the second year of relatively strong import increases. Since imports of ornamental fish are lumped together in one category and are only reported by value, it is unknown if the quantity of ornamental fish imported increased or if the higher total import figure is just the result of higher prices. Also it is impossible to know if there have been large changes in the types of ornamental fish being imported. Most of the increases came from Asia, with imports from Thailand, Singapore, Indonesia, China, and Taiwan increasing the most. In 2005, the continued weakness of the dollar relative to the euro is expected to boost sales of ornamental fish to EU-25 countries, and exports to Mexico are expected to improve. Normally a weaker dollar would be expected to lower imports, but the value of imports may not decline if the major Asian suppliers are the only sources for specific types of ornamental fish.

Links

For more information view the full Aquaculture Outlook Report - May 2005 (pdf)

Source: U.S. Department of Agriculture, Economic Research Service - May 2005

5m Editor