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
years.
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.
Links
For more information view the full Aquaculture Outlook Report - March 2006 (pdf)
Source: U.S. Department of Agriculture, Economic Research Service - March 2006
