US catfish industry bleeding finally stops Jeanine Stewart Years of doom and gloom trends in the US catfish industry are finally coming to an end as the industry stops losing its major companies to soybean farming. “We’ve lost 50% of our farms, but I believe we’ve reached a point where the loss in the industry has stopped,” Jack Perkins, vice president of sales and marketing for Consolidated Catfish, told Undercurrent News. He estimates the industry will produce the same amount of catfish this year as it did last year, at 300 million pounds, and believes buyers are finally ready to recognize the high costs of doing business. “Although cold, rainy Spring weather has caused a set-back in farm production and a short supply of production size fish, good summer weather and a long fall feeding could make up the difference,” Perkins said, adding that that is a big “if”. Also, new farming tactics could produce more fish per acre, which may allow the industry to grow more fish on the existing acreage. “Hopefully we’ll see 2014 and beyond as an industry recovery time,” Perkins said. There is much to recover from, considering the past few years. Farmers are struggling with a 109% increase in feed prices, which rose from a range of $200 to $230 per metric ton to the sky high level of $450 per mt. This comes due to mounting costs of corn and particularly soybeans. Soybean prices are soaring above the thirty year average of $4 to $8 a bushel, having risen to $12 to $16 a bushel, said Perkins. Staring these costs in the face, catfish farmers realized that converting their catfish farms to soybean farms – which is completely viable – was a better business prospect, and little by little the industry has shrunk. However, even with a decreased amount of acreage at its disposal, the farmers that are left are working on ways to do more with the acreage they have by producing more fish per acre, Perkins said. Plus, staying in the industry is becoming more attractive, considering the price improvements. Right now, prices at the high level of $4 to $4.25 per pound for wholesale for fillets, which is the same price as last year at this time but a significant jump from last fall and a huge increase from recent history. The industry average for the 10-year period leading up to 2010 was $3 to $3.25, Perkins said. Where will prices settle? Perkins calls the $4 to $4.25 per pound price range reasonable, but prices may increase. “The market has been going steadily up since February and March and probably will go up a little more,” Perkins said. Yet the current price point could be partially due to a low supply situation that may not last. “Supply is down because of the cold and rainy weather,” Perkins said. “May and even April, it was just cold nights, and now hopefully we’re having beautiful weather now. If we get lucky in the fall and have a later winter, we can probably make it up weight-wise.” He anticipates the fish, which have been harvested at 1 to 1.5 pounds this spring, will grow better as the weather warms and be able to hit 2 pounds before harvest. Assuming supply does increase, will prices sustain themselves? They very well could. Prices in the fall of 2011, after all, hit up to $5 per pound. Although Perkins doesn’t want to see prices go so high that they become unreasonable to the consumer, any lowering of prices could injure an already wilted industry. “In order to keep the industry alive, we have to cover the cost of production,” Perkins said. Meanwhile, it appears the price of pangasius – the US catfish industry’s long-standing major competitor from overseas – is not impacting the catfish market for the first time in years, said Perkins. Mislabeling of the lower priced product pangasius as catfish, which Perkins has witnessed first hand even this year, has hurt the price of catfish in past years, he said. Yet right now, the US catfish price increases, Vietnam’s pangasius industry is reporting a price plunge. When asked whether the current low supply levels were a major cause of the increased costs, Perkins said no. “It is mainly due to the cost of production,” he said. Whatever the cause of the price increase, it is important that they hold firm for the sake of the industry’s survival. “We’re a much smaller company than we were six years ago,” Perkins said. However, even with this downsize, Consolidated Catfish has not shrunk as much as most. “We have grown market share by a few percentage points.” By Jeanine Stewart Source: Undercurrent News
Posted on: Mon, 08 Jul 2013 03:30:18 +0000
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