The paradox of Gulf shrimp: demand is high but prices stuck near record lows

Published on
May 31, 2016

Demand for wild shrimp is expected to be higher at the start of the Louisiana brown shrimp season on 23 May, but fishermen are reporting near-record low prices at the dock.

Demand for wild shrimp caught in the Gulf of Mexico has been up for the past two years or more, thanks to marketing efforts by leading chefs in Louisiana, Alabama and other Gulf states and associations such as the American Shrimp Processors Association. After the BP/ Deepwater Horizon oil spill, Gulf restaurateurs, seafood suppliers, processors and others took their message nationwide: the Gulf seafood supply is still very safe and plentiful.

Now, demand for U.S. shrimp and Cajun and creole flavors is at an all-time high. Further fueling consumer demand is a recent episode of The Dr. Oz Show, in which the daytime television star touted the benefits of wild American wild shrimp versus imported farmed shrimp, which often contains high levels of antibiotics.

“The Dr. Oz Show created such a buzz. We had 25 mail orders this week, versus our two to three typical orders per week this time of year,” said Lance Nacio, owner and captain of Anna Marie Shrimp Company in Montegut, Louisiana.

However, dock prices for the new Louisiana shrimp season are much lower than they have been for several years, fishermen and buyers said.

“We are working on 1983-1984 dock prices. We are getting killed in every direction,” said Dean Blanchard, owner of Dean Blanchard Seafood in Grand Isle, Louisiana.

While dock prices were as high as USD 5 (EUR 4.47) per pound for 10/15-count two years ago, they are down to USD 2 (EUR 1.79) per pound on average now, fishermen and buyers said. Dock prices for smaller sizes, such as 45/50s have fallen to between USD 0.85 (EUR 0.76) and USD 1 (EUR 0.89) per pound, on average.

NOAA reports that April average dockside ex-vessel price in the western Gulf for 41/50 count headless shrimp was UD 1.12 (EUR 1) per pound, compared to USD 3.51 (EUR 3.14) per pound in April 2015.

“This is the lowest ex-vessel price for 41/50 headless count reported for any April in the western Gulf in the data maintained by the Southern Shrimp Alliance going back to 2001,” the Alliance stated in its newsletter, The Shrimp e-Advocate.

Buyers acknowledged the lower prices for the start of the Louisiana brown shrimp season and the Mississippi shrimp season, which starts in June. For example, Kristian Wade, executive chef for the Beau Rivage Resort and Casino in Biloxi, Mississippi, expects to pay less for Louisiana and Mississippi shrimp this season. The resort uses at least 1,000 pounds of Gulf shrimp daily.

At Thibodaux, Louisiana.-based Rouses Supermarkets, large, head-on wild Louisiana shrimp were priced as low as USD 4.99 (EUR 4.46) per pound in late May.

There are a number of different theories on why the dock prices are so low, but the plentiful Gulf shrimp supply likely has a lot to do with it. NOAA reported landings of 2.8 million pounds of shrimp in the Gulf of Mexico for April, 2016, the highest total for an April since 2012.

“This amount was driven by a productive April in Louisiana (0.65 million pounds) and Texas (0.95 million pounds) and an unprecedented April in Alabama (0.75 million pounds). Shrimp landed in Alabama last month was, far and away, the highest reported for any April in the data maintained by the Southern Shrimp Alliance going back to 2002 and nearly three times the historical average….for the prior fourteen years,” according to the Southern Shrimp Alliance’s newsletter.

However, shrimpers believe that many buyers are undercutting them on dock prices, while keeping their wholesale, retail and restaurant prices high.

“With the low fuel prices, they figure we can work on less margin,” Nacio said.

Blanchard agreed. “Buyers figure that BP paid the fishermen so much money [that they don’t need the money],” he said.

However, Benny Miller, owner of New Orleans-based wholesaler Louisiana Seafood Exchange, believes the low price on smaller sizes is linked to global markets. “A lot of this [pricing] has to do with world markets. The Gulf market is a very small percentage of shrimp used in the U.S., and the big buyers keep all that in the big picture.”

However, shrimpers who have developed businesses where they sell directly to retailers or consumers are snaring stronger prices, Miller said.

Contributing Editor

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