High Feed Costs, Tough Times for Catfish Farmers

Record grain and oilseed prices in 2007 have taken the cost of producing catfish in Arkansas to record levels, Engle said.

"These are tough times for farmers, and some of them may not be able to stay in business," she said. "My phone has been ringing off the hook since the first of the year when prices began really getting high.

"These are the highest prices ever in the history of the industry," Engle said.

Arkansas ranks third in the nation in catfish production. Engle estimated there are about 130 catfish farmers in Arkansas, down from about 150 two years ago, with just under 30,000 acres of ponds.

She said some feed mills have come out with new feed formulations that are cheaper to help farmers survive. The Aquaculture/Fisheries Center at UAPB is conducting aquarium studies on these feeds and has begun a pond study.

"These are cheaper feeds which use different ingredients, but still provide a 32 percent protein level that catfish need," Engle said. The new feeds are $60 to $70 a ton cheaper than previous formulations.

The standard formulation consists of soybean, corn, wheat and cottonseed meal. The soybean meal is highly digestible by catfish, but the price of some of these commodities is soaring.

The newer formulation consists of corn gluten, a lower soybean meal content and other ingredients that have been manipulated to keep the price lower while maintaining a 32 percent protein level.

Engle said that the average price of feed from 1987 to 2006 was $232 a ton. In 2007, the average price was $277 a ton.

"When we get into 2008, the price soared to an average of $380 a ton for January and February," she said.

Scott Stiles, an extension economist with the University of Arkansas Division of Agriculture, said the surge in feed prices followed run-up in grain prices, particularly soybeans.

"Fortunately for catfish producers, we’ve seen 32 percent feed prices stabilize, at least over the past month, to around $350 to $355," he said. "Soybean and soybean meal futures prices for the May contract peaked on March 3. According to the USDA, 44 percent soybean meal prices at Memphis have dropped $46.40 per ton since the week of March 8, down to $350.80."

Engle said the cheaper formulations are selling for about $325 a ton, which is still high but could make a huge difference in a farmer’s bottom line.

"With catfish prices of about 75 cents a pound, $380 a ton can net a farmer only 3 or 4 cents above variable costs. It’s not enough to cover fixed costs. It’s very risky. At $325, you have about 10 cents a pound to cover fixed costs, and it’s a much more stable situation. You can probably make it through with that."

Engle said if the price of catfish rises because of lower stocks, farmers will get an economic boost. That’s a possibility since some farmers in Arkansas and other catfish producing states have gone out of business or cutback production.

Engle said, "There’s a lot of change right now. It’s a very dynamic situation. Some farmers are taking their poorest-performing ponds out of production and reworking them and putting them into row crops. They’re focusing their management on their highest-performing ponds. I think this is a good business decision."

Engle said spreadsheets are available to farmers to help them make management decisions. Farmers can ask their county agents for information or go to www.uaex.edu/aqfi and select Extension, then Aquaculture.

The Cooperative Extension Service and Aquaculture/Fisheries Center of Excellence are part of the U of A Division of Agriculture.