Fuel too high, shrimp too low

Fuel too high, shrimp too low

28 April 2008

By KATHERINE SAYRE

BAYOU LA BATRE. Little Andrew hasn’t moved in months.

Dung Nguyen’s shrimp boat has been tied to a dock here since January.

“Fuel too high, shrimp too low, can’t make a profit,” Nguyen said.

Boats line the docks along the bayou, tied up and stagnant. Boat owners have found it increasingly difficult to make a profit in recent years, with higher fuel costs, low prices for their domestic catch and destruction from Hurricane Katrina in 2005.

But many say recent high prices for marine fuel which topped $3.60 per gallon at local fuel docks last week has further damaged an already struggling industry.

Diesel fuel prices have more than doubled in the past five years, an increase that adds up to thousands of dollars when filling up a 25,000-gallon tank. Many shrimpers say the math doesn’t work out: expenses exceed the profit of trawling, at least for now.

Some say they’re waiting until shrimp prices increase or fuel prices fall, but it’s unclear when, or if, conditions will change.

In the meantime, the local seafood economy suffers. With boats tied up, crews are out of work in a town where generations of men and women have made lifelong careers from shrimping.

“I think it’s too late for the shrimping industry. There’s no way you could survive this,” said Bayou La Batre Mayor Stan Wright, who owns an oyster processing house. “If you own a shrimp boat today, I feel sorry for you.”

The average price per pound of shrimp has steadily declined in recent years, making the annual catch less valuable each year, according to federal statistics.

About 20.1 million pounds of whole shrimp landed on Alabama’s shores in 2000, valued at $56.7 million. Last year, 21 million pounds of shrimp landed in Alabama, valued at $40.2 million, or a 29 percent decrease in value for slightly more shrimp, according to preliminary data from the Alabama Marine Resources Division.

A shrimper today, on average, must catch nearly 2 pounds of whole, head-on shrimp for every gallon of fuel burned to cover fuel costs, according to the Alabama Marine Resources Division.

Ernie Anderson, president of the Organized Seafood Association of Alabama, said marine diesel fuel prices have increased from an average of $2.88 per gallon last year.

Fuel costs today eat up a majority of the average value of each pound of headless shrimp, or about $2 for each pound sold at an average of $3.25, Anderson said.

A spokeswoman for the Southern Shrimp Alliance, a coalition representing the domestic shrimp industry in eight states, said the high cost of diesel fuel is impacting shrimpers nationwide.

Imported shrimp from countries such as Vietnam, Thailand and China account for more than 90 percent of all shrimp consumed in the United States, according to the National Marine Fisheries Service. Those imports have kept domestic prices too low, shrimpers say, to make up for the fuel price increase.

American consumers have continued to eat more imported, farm-raised shrimp, despite tariffs on imports petitioned for by the U.S. shrimp industry, whose leaders claimed foreign imports were being “dumped” in the U.S. at unfair prices.

A U.S. trade law passed in 2000, known as the Byrd Amendment, allowed millions of dollars in duties to be paid directly to U.S. shrimpers, but that law has since been repealed.

Nguyen, who lives in Panama City, Fla., but has docked Little Andrew in Bayou La Batre for seven years, said he uses about 22,000 gallons of fuel on an average trip, which adds up to a bill of about $79,000. He also pays $16,000 each month for the loan on his boat and insurance.

“If fuel goes down, we’ll do OK,” Nguyen said.

Dominick Ficarino, owner of shrimp processing house Dominick’s Seafood, also owns five trawlers the largest fleet remaining in Bayou La Batre.

Miss Ashleigh, Miss Loraine, Miss Barbara, Miss Hannah and Joseph Anthony with fuel tanks ranging from 26,000 gallons to 41,000 gallons will stay at his dock until he decides he can make a profit, he said .

“I don’t anticipate leaving any time soon,” Ficarino said earlier this month. “We just can’t afford to take a chance.”

Some cost-saving measures could help when he goes out, he said, such as using smaller nets that take less fuel to drag and limiting the hours nets are out.

“I just can’t see leaving to go lose $100,000 overnight,” Ficarino said. “I think I lost enough since the hurricane.”

Jeremy Schjott, who operates Miss Barbara for Ficarino, was painting boats on Tuesday, a temporary job until he can bring the boat back into the Gulf.

“We used to work year-round,” said Schjott, 28, who has been a shrimper since he was 16. “We never stopped.”

Walton Kraver, owner of two seafood companies who heads a cooperative of crab, oyster and shrimp processors, said he used to keep a fleet of 22 vessels, but now he’s down to one, the Country Girl. He has invested more in seafood imports and processing.

Now, he questions the value of keeping even one boat in the water.

“It’s a bad situation,” Kraver said. “The big questions have to be asked. If the boats can’t go out and catch, what are you going to do with the processing plants? What are you going to do with the people who work there? What are you going to do with the city who depends on the taxes?”

Source: AL.com