U.S. Aquaculture Production Higher in 2006
The combination of a somewhat stronger domestic economy in terms of
growth in GDP and disposable income, and a dollar that is weaker against a
number of foreign currencies, is expected to increase demand for seafood in
general and domestic seafood and aquaculture products in particular. The
weaker dollar means many imported aquaculture products are expected to be
more expensive and their imports will grow at a slower rate than in previous
Even with these changes, imports of aquaculture products are expected to grow as a percentage of total domestic seafood supply. Lower domestic landings of a number of species in the Gulf region that was heavily impacted by hurricanes in 2005 are one reason for this growth. Alaska is the largest supplier of wild harvest seafood in the United States, but Louisiana is the second-largest in terms of both quantity and value. With the exception of crawfish and oysters, most domestic aquaculture operations were not severely impacted by the hurricanes.
The primary grain products used in aquaculture feeds are corn and soybean meal. In 2005, the average prices for these products fell considerably. Corn prices are forecast to be slightly higher in the first half of 2006 with prices moving lower towards the end of the year. For high protein soybean meal, prices are expected to be about even with a year earlier in the first quarter, but to be lower during the remainder of the year. Overall prices for 2006 are expected to be higher for corn, but lower for soybean meal. While continued low prices will help many aquaculture producers that use these products in their feeds, low grain prices will also reduce feed prices for livestock and poultry producers.
The overall picture for the domestic aquaculture and seafood industry in 2006 is based on four major factors. First, strong domestic economic growth in 2006 is expected to improve restaurant sales, which are a chief outlet for seafood sales. Second, a weaker dollar is expected to make imports of many competing seafood products relatively more expensive and help make U.S. exports more competitive. Third, as demand for poultry products lessens in many parts of the world, demand for alternate protein products may place some upward pressure on seafood prices. Fourth, relatively strong farm-level prices for a number of aquaculture products in 2005 are expected to provide an incentive to increase production.
Offsetting these positive factors are strong expected competition from the U.S. livestock industry in 2006. Production of both beef and pork is expected to be higher in 2006, with average prices expected to be somewhat lower than in 2005. Broiler production is expected to increase by 2 percent in 2006. Wholesale prices for most broiler products have started 2006 considerably lower than at the start of 2005.