Route to Recovery

A trip through the epicenters of the recession

Downturn brings fresh pain to struggling Gulf Coast shrimpers

November 12, 2009

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BAYOU LA BATRE, Alabama – Long before America slid into recession in late 2007, shrimp fishermen here on the Gulf Coast had been struggling to make a living.

“Twenty-odd years ago, if a shrimp boat came in with 100 boxes of shrimp, they’d consider that a good catch,” said Avery Bates, vice president of the Organized Seafood Association of Alabama (OSAA). “Now if you come in with 400 you’re barely scraping by.”

The main problem that shrimpers down here say they face is farm-raised shrimp imported from countries like Vietnam or China, or government-subsidized shrimp from Mexico.

“We take it right on the nose,” Bates said. “A lot of our boats have went right out of business.”

Bates said that back in the 1980s, some 4,500 U.S. shrimp boats trawled the waters of the Gulf of Mexico. Now, that number is down to 1,200 and dwindling fast.

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The complaint here is similar to one you will here from manufacturers around the country: a cheaper imported product has undercut the market and left local producers fighting to stay afloat. Shrimpers in this small town known as the seafood capital of Alabama say they have had to catch ever more shrimp over the years to keep up.

“The last good year we had around here was 2000,” said Greg Ladnier, owner of Sea Pearl Seafood Co Inc., which processes shrimp delivered by local shrimpers. “Back then a lot of farm-raised shrimp was affected with diseases and we had a good year for catches. So we were able to make up the difference.”

“Since then things have been bad,” he said as workers cleaned his plant following the heavy rains brought by tropical storm Ida. “Unless something changes what’s going to happen is already happening all around us. “

“As the price of shrimp goes down it’s harder and harder to make a profit and keep on going.”

High fuel costs and high maintenance costs have added to shrimpers’ woes and the recession has only made things worse. Shrimp is a luxury item and prices have slumped as American consumers have cut their budgets.

“Shrimp is like steak or hamburger,” said Ernie Anderson, OSAA president as workers at his distribution facility box up frozen shrimp to be hauled to customers. “People don’t have to eat it and it’s something they can do without if they need to spend less money.”

While readying the shrimp boat that he works on for a trip out into the Gulf – Gulf shrimpers will often go out for 20 to 30 days and freeze the shrimp they catch as they go within 30 minutes of catching it – Bob McClintoc said that he had just been looking through the boat’s log back at the year 2000 and regretted that he had.

Back then, the boat would sell “1620s” – meaning shrimp that weigh in at between 16 to 20 to the pound – for $7.40 per pound. Now that catch sells for $2.80 a pound.

“It’s enough to make you sick,” he said. “This is killing us.”

Anderson said that the local industry’s hopes for survival are currently pinned on a state law, which will come into effect next January, that will require restaurants to tell customers where their seafood comes from when asked.

“We believe that given a choice, most people will prefer domestic wild caught shrimp to farm-raised imports,” he said. “That should at least allow us to increase our market share just enough to stay in business,”

He added that the U.S. shrimp industry is lobbying for a national bill along the same lines, but that the restaurant industry and retailers are resisting it.

“Restaurants are not keen to have American consumers know what they’re eating,” Anderson said.

In the meantime, shrimpers like Steve Patronas say that they are caught between the high costs and low prices for their catches that are slowly choking off their way of live.

“Come the spring if shrimp prices are where they are now and fuel prices go up,” he said, standing on the deck of his small boat for shrimping close to shore, “then my boat isn’t going out.”

Photos by Carlos Barria

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Comments

No one should be eating farm raised shrimp. That stuff is loaded with antibiotics and other drugs. Some of those drugs are illegal in the US. It is far better to eat wild shrimp.

Posted by BB | Report as abusive
 

Those Gulf Shrimpers always have to blame someone else (Mexicans, Vietnamese Immigrants ad nauseum) for the destruction of the Shrimp habitat that they have been practicing. Thousand of fish are killed everytime a shrimper drags his traps across the ocean floor, stirring up sediments and pollutants that have settled a long time ago. Farm raised shrimp is much more ecologically friendly, and does not have Thousands of Boats polluting the Air with their ill maintained Diesel engines.

Posted by Jamie Douglas | Report as abusive
 

I remember as a kid how exciting it was visiting the shrimp boats as they came in. Getting fresh shrimp off the boats and having my mom boil up a big batch. There is nothing better.

I hate to say this, but I think America is our own worst enemy. We are a land of opportunity and slowly we are letting it go to foreign competitors. I am guilty of this myself. I want a cheaper product, but I’m starting to realize, cheaper may not always be the best way to go. Not if its going to destroy our economy and livelyhood. “America, come back home”

 

Do a taste test, wild caught vs. farm raised. The farm raised is nasty. You can’t beat wild caught gulf shrimp. The Asian shrimp producers DO use chemicals in their operations that are banned in the US. How can that stuff be imported?????? I can’t believe Obama and his business nazis arent all over this!!! Save us Mr President save us!!!!

Posted by DAve | Report as abusive
 

If only we stop going cheaper and cheaper and support US producers.. soon there will be no farming in US.. gone is Manufacturing to China.. a seizable portion of Services to India..

Posted by Michael | Report as abusive
 

People have been sold by the Harvard and Columbia MBA-types on the bogus notion that ‘free markets’ are always better. They aren’t. America grew to become a great economic power behind all sorts of protective tariffs and trade barriers in the nineteenth and early-twentieth centuries. The MBA-types have made fortunes for the ‘brilliant’ insight that if they ship jobs abroad their profits go up. The fact that there are fewer and fewer decent jobs in the US simply doesn’t matter in their calculations because that’s a long-term problem and their profits, salary, consulting fees, bonuses, and stock options, are all relatively short-term – they cash out and working people who used to be able to make a decent living are left to twist in the wind.

Markets have a place. They aren’t magic, though, and anything carried to an extreme is a very bad idea – does anyone really need to be told this?

Yes, there should be imports, within reason, but unrestrained ‘free-trade’ has benefited only those with control of substantial assets and capital. Look around. The divergence between middle class and the very wealthy is the greatest it’s been in many decades, perhaps in a century. At this rate we’ll soon be back to indentured servitude as the latest ‘great free-market idea’ from the MBAs.

We’re nearing a desperate point, I think, so I’ll make a simple point: There’s an ancient idea, called by the Chinese the ‘mandate of heaven’, and there are similar western ideas that were applied even in the ‘age of kings’ that says that if a government fails to serve the interests of the people it no longer has a claim to being a legitimate government. The perception that this is the case is now rightly widespread, and with good reason.

I think it’s time to start considering serious measures such as state secession and/or calling for a constitutional convention. Washington is in the hands of oligarchs not too much better than the Russian oligarchs, and is no longer responsible to the people.

What’s the alternative? Indentured servitude? Serfdom? An extreme right-wing or extreme left-wing revolution as the economy collapses?

If there isn’t action that begins soon, I’m afraid that what may emerge will be a very rough beast indeed, and we all ought to fear that.

[End of rant]

Posted by Big Al | Report as abusive
 

i live near galveston tx, & i am a avid fishermen. i can relate to both the first 2comments. farm raised shrimp is not as tasty to me nor the fish (not that i buy that to fish with it, it just happpened that way 1 day). i can instantly tell the difference just by lookin at them as which is which. Now i dont know about the the drugs, and while i may have to rely on those shrimp boats to catch my bait, thier are some of these boats that kill turtles, flounder,& a host of of other species, and yet sell them keepers, or not, the bycatch thats not kept is tossed overboard. A case can be made as to well, the creatures of the sea would have ate them. But alive they have their chance in nature. while we cant have cameras on every boat to monitor what they r doing & shoudn’t, we must rely on the good judgement of the captain to do the right thing. i just cant do the farm raised thing, yet as u can see, i have mixed emotions about the real thing.

Posted by B Wayne | Report as abusive
 

Buyer beware! I only eat wild caught shrimp simply because the flavor and texture is far superior to farm raised (there also isn’t all the chemicals from runoff into farm raised ponds in China and Indonesia). Having said that, whenever I order a shrimp dish from a restaurant that advertises gulf shrimp or wild caught shrimp on their menu, I always ask them is it actually wild, or farm raised? I have yet to find an inland restuarant with such advertising that has not admitted to actually selling farm raised…even some coastal restaurants are false-advertising in this manner. Buyer beware!

Posted by JE | Report as abusive
 

Our labor cost is indeed cheap in China.The graduats’ salary,are about $500 per month.You know,developing countries have nothing except the cheap labor.And I have to admit that the qualities of my home products are not as good as yours.So,we win only through the lower price,but you win through the quality.That just looks like a person have a choice between two goods.

 

Enough of this “Free Trade” insanity. The USG MUST put the ability of Americans to earn a living ahead of any and all “Free Trade” swindle considerations. STOP imports like this farm raised shrimp! Me and my family don’t eat the crap, we only buy USA shrimp. “Free Trade” MUST END or we’ll all be living like coolies within 10 years.

Posted by RFL | Report as abusive
 

Yes farm raised shrimp is way cheaper but tasteless compared to wild caught shrimp. They need to go for the quality market and as mentioned in other articles, the health aspect. Just think when you eat Bengali, Vietnamese or Chinese shrimp you are eating the waste products of two billion people living upstream.

 

I do not know much about the shrimp industry and shrimp is a food I consume occasionally. However, I have certainly noticed the routine poor quality of Asian-manufactured goods and have no reason to believe food improrts would be any better.

I do not see this matter being any sort of priority nor reaching any resolution in the foreseeable future because our Government is in a power-trip tug-of-war over health care, the environment, Wall Street, the Banking System, Community Organizations, and whatever else they can get their fingers into.

My suggestion would be to have the USDA develop a rating system like they do for Beef or Eggs so consumers know what they are buying– whether it is domestic or imported and the grade/quality level. That way consumers can make their own individual choice about what is best for them. But, that is just me trying to apply rational thought to a problem and I suspect if Washington ever tries to tackle the problem it will be a 1500-page bill.

Posted by Scott | Report as abusive
 

Free trade is here to stay, there is no point in condemning the developing nations. Developed nations had their chance during the ‘industrial age’, now its time for other nations to catch up.

So what should U.S. do, is to invest in brains. That is where the money is. What should American citizens do? Got to college, strengthen your softskills, and start your enterprise in developing countries, make them work, reap the benefits. You cant beat it, you have to join it.

Posted by BP | Report as abusive
 

Dear Reuters

The way of life killed by uncompetitiveness.

In Economic 101, we learned about competitive advantages where one country can produce certain products, services or solutions better than the other countries. And vice versa.

As a result of that, if these countries have money to buy from each other, they should only focused on producing the products, services or solutions that are cheaper than the other countries. Of course, cheaper here also mean decent quality including safety too.

Alas, then come the need to be independent and the need to be more prosperous. So, producing just the cheaper products, services or solutions relative to other countries just cannot be the right aspiration.

Also, the countries that produced high value products, services or solutions at cheaper cost find that they can actually utilize cheaper labour/land/capital/equipment/etc in those countries that were producing cheaper products/serivces/solutions to produce their high value stuffs.

So, the MNCs, or some called them Global Companies ventured to low cost countries to make the stuffs.

NO ONE blinked when USA were doing that and that the USA workers (blue, white, gold collared) were gainfully employed. USA farmers (shrimps, fish, and whatever) were earning good money still. Of course, the Wall Streets type has it good all the while as NO ONE seems to have the expertise that the USA type possessed. Financial innovativeness keep rolling out ‘good’ stuffs for USA and the rest of the world to ‘invest’/'consume’.

Now we are in this situation. It is not new. It will happen again and again as it is the natural process.

Free Trade forgets that you cannot move people around easily. Can you imagine moving 300m PRC Chinese to the land of the free, USA? It will sink!! That will create a sizeable market for sure.

So, true Free Trade is a pipe dream. It had its share of the limelight as long as USA is benefitting.

Now that it is no longer the case, it is logical to reverse course from an American perspective.

Now the world wants PRC consumers to spend and learn the habits of using Credit Cards and Credits to consume so that the world economy can grow again.

So, that USA will not be the only dominant consuming nation.

Question is: there are still 700-800m PRC Chinese still NOT getting the fruits of the ‘economics progress’. What do we do with them? What will they do if they continued to not get it? How long will they wait before their patience wear thin?

So, free trade is a complex issue.

For now, if you want to eat wild shrimps, go do it. If you want to eat farm raised shrimps, go do it. You have a choice because of Free Trade. Ironically, is it not?

By the way, many ways of life in Asia also got killed by free trade as people (some) find it more ‘profitable’ to do other things to make more money!

Best regards
LU Keehong Mr.
Singapore

Posted by LU Keehong | Report as abusive
 

I agree with Big Al. Unbridled free trade and globalization were made on the back of all western world workers.
Investing in developing countries in order to start a cath-up process is great for everyone, but sending out manufactory activities all at once without giving an alternative to their workers is almost criminal action.
Note anyway that US is a free market advocate as long as it suits its needs; it put up the WTO with the condition that if at anytime an international free market treaty is against its interests, it can retreat and make another deal outside the organization.
Last little example: tariffs on chinese tires, some weeks after the G8 meeting and great talks about “collaboration” and “protectionism defiance”. Almost ridiculous hypocrisy.

Posted by Lighty | Report as abusive
 

Lower costs equal a higher standard of living for consumers. Why should I be forced to pay higher prices for shrimp? Doesn’t anybody in America believe in freedom anymore? Maybe these people that can’t make a living shrimping should find another line of work instead of intruding on my freedom by calling for government restrictions on their competitors! The ironic thing is that the people complaining about not being able to make a profit shrimping, are probably the same people that also complain about the profits being made in other industries such as health care.

Posted by Adam | Report as abusive
 

Redbox….soon it will have a Brown Box right next to it. Just like media, its the one I won’t be eating out of. Its going to take a lot of effort from everyone to make this right. England somehow managed to clean the River Thames; we’ll have to do that to the Mississippi and the Gulf. In addition, those changes really mean major agricultural changes.

Back before WWII people worked the fields by hand, using the sun for energy….rather than exotic pesticides and fertilizers. We got lots of jobless; de-tune the millitary-inustrial-agro complex and put those hands in the fields. Most people that work gardens get great joy out of providing for others; its just a matter of how you treat the worker. I’m not talking slavery here; I’m talking work….a little toil. Its good for the human spirit to have something to do other than watch TV or surf the internet.

Good for America and good for your stomach.

Posted by Anthony Rodriguez | Report as abusive
 

Tian Yue ~ I think China has a great deal going for it besides cheap labor and a (presently) cheap Renminbi. I simply think it would be better if the US slowed – not stopped – outsourcing jobs. It isn’t change that’s damaging, in my opinion, but the *rate* or change. An economy needs some time to adapt. For the US to have over the past decades outsourced so many good paying jobs to Latin America, India, and now China, has created great destruction because large numbers of people no longer had decent gainful employment and had no choice but to take very-low-paying jobs with no benefits, all of which has a sharp contrationary effect on the economy while, meanwhile, the US financial oligarchs piled up the money.

China has many advantages, and the US would benefit from the competition if only the *rate* of change were managed more sensibly by the US.

So far, I’m afraid, it hasn’t been, and that benefits no one in the long run, in my opionion.

The Chinese government is certainly not terribly democratic, yet it’s done a better job, on the whole, of looking out for the interests of the people of China than has the US government.

At least in my opinion.

Posted by Big Al | Report as abusive
 

Voters need to wise up.

Posted by jason | Report as abusive
 

The notion that outsourcing of manufacturing and services is killing us is not the complete picture. In this era of globalization it does not matter if we do not do that someone else will produce goods cheaper than us and capture the market. The past 80 years or so have lulled us into a dangerous slumber because we built capacity while the rest of the world infrastructure and skill set were totally ravaged by war and other disasters. We were the only nation with a manufacturing base left intact and could sell our cars, refrigerators and other machinery and services to people overseas. Gradually that advantage has been eroded, the next 30 years will see some changes in America that will leave everyone scratching for a living. It is not because of our weakness but because of our complacency, when we should be investing in the next big things like fusion power, gene technology and out innovating others we are spending time watching desperate housewives, american idol and the bachelor. The emphasis on cutting edge research and education has given way to mindless commercialism and made us weak and unprepared. There is no going back folks, the only way is forward….we need to innovate or suffer.

Posted by Giri | Report as abusive
 

What is so strange about outsourcing is that we are trying to put the world on a single economic plane. OK so US doctors and bankers will have to work for India based wages. This is socialism in the worst form and smacks of the company store and the company town where people live and die poor. Leave the foreign shrimp and the Chinese and Indian products be consumed by Chinese and Indian people. Global free trade is a failure now and always have been. How can we go on being governed by representatives who will sell their vote to the highest bidder. Well we can’t.

Posted by f belz | Report as abusive
 

Big AI,at first,I’ll say I very respect to The USA,because of her democratic system.Alought she is not perfect,The USA have set an example over the world.
About the Chinese cheap labor and Renminbi,I think they maybe lead to the U.S. unemployment in some way.But obviously,they are not the main reason.Imagining if there are no Chinese cheap labor and Reminbi:on one hand,the rate of unemployment will decrease in US,and “the world factory” will begin to work once again;on other hand,the Chinese employment rate will decrease,meanwhile,there is no cheap products anymore.The result is that the commodity price in USA will go up,so you will spend more money in your daily life.And the demand of your products maybe reduce,because one of your customers—China has gone bankrupt.Perhaps someone will say that American will buy their products,because they get good jobs.However,the USA and China are both the producers also customers,when one becomes weak,another won’t be better.
And we have done a lot of works.We have bought lots of U.S. treasury bonds,instantly you want us to revalue Renminbi,what about our losses?You know saving so much money isn’t an easy thing for a developing country.
At least,the two countries have to cooperate with each other to deal with the common problems.
It is only my opinion.

Posted by Tian Yue | Report as abusive
 

Fresh caught shrimp, and in particular, Gulf shrimp, are much tastier than farm raised (US or other) and foregn caught shrimp.

As for concerns about the method of catching fresh shrimp stirring up the bottom, what do you think shrimp eat? It’s what everybody else in the ocean is finished with….

No matter how small the fleet gets, there will always be a demand in the USA for fresh caught U.S. shrimp. Hang in there Ricky Robin and the shrimpers of St. Bernard Parish LA, of Bayou La Batre AL, of Calabash NC, etc.

Posted by Rick B. | Report as abusive
 

“No one should be eating farm raised shrimp. That stuff is loaded with antibiotics and other drugs. Some of those drugs are illegal in the US. It is far better to eat wild shrimp.” – posted by BB
Agree. But why only shrimp? Farmed fish is equally bad. Especially imported from China. Remember the scandals with poisoned pet food and dairy (including baby food) tainted with melamine intentionally added to increase protein content (or rather to fool test determining that content)? If that’s how they treat food intended for human consumption, one could only imagine what they add to animal (including shrimp & fish) feed. Besides if you make an effort you can find wild caught fish at prices competitive, or even beating farmed fish. Wild Pacific salmon is less expensive than farmed Atlantic salmon, and tastes better, though looks not as gorgeous (mostly because farmed salmon is fatter, and pigment was added to the feed for that “salmon” color). Flounder and ocean perch (these are never farmed) are usually sold at the same price as tilapia (always farmed), and again taste better (though taste is individual matter).

Posted by Anonymous | Report as abusive
 

Tian Yue ~

I may not have been clear – my fault. I agree with most of what you say, perhaps even all of it. I don’t think it would be good for either China or the US to devalue the Renminbi right now. I think the Chinese are right that they want to keep the Renminbi where it is and that the US needs to put its own house in order. The US is mostly under a lot of stress right now – mostly its own fault – and is trying to blame other countries, including China, for its own mistakes.

All I mean to say, really, is that there is some place, in any country, whether it’s China, the US, or whoever, to consider the role of cheap imports. They are good in many ways, but if a country allows in *too* many cheap imports *too* fast it tends to destroy its own economy – I think the US did this, following the advice of its own most greedy advisers who made a lot of money peddling this supposedly brilliant advise to US companies. This is the US’ own fault, and the US needs to put its own house in order, not blame other countries.

The problem, as I see it, inside the US, is that the most powerful commercial interests lobby for the idea of a very extreme idea of markets and free trade, and I think that *anything* that is too extreme is a bad idea.

I don’t think our opinions are really very different, unless I’m mistaken.

Only my opinion, also.

Posted by Big Al | Report as abusive
 

Ok, some Americans really need to wise up, crying rarely solves anything (no offence intended). I recommend you guys read “Only the Paranoid Survive” by Andy Grove, it talked about the early days of Intel in the 80′s where they were beaten at every turn by the Japanese in the computer memories market, until they decided to make a bold move and move into the micro-processor market. Look at them now! Nothing comes out of crying and complaining, instead it’s always better to try to beat the market by being innovative.

Also, China cannot be blamed for any of America’s mess. I mean, if China doesn’t keep their currency artificially low against the dollar, some other country will!

Posted by Noobface | Report as abusive
 

What I like about small business owners is that they are not afraid to take huge risks and lay it all on the line. But, I agree they do need a lot of help with their marketing. I think having them go the social media and email route is not only the least expensive but its also the most effective. Thanks for the stats!

 

The Center for Media Research has released a study by Vertical Response that shows just where many of these ‘Main Street’ players are going with their online dollars. The big winners: e-mail and social media. With only 3.8% of small business folks NOT planning on using e-mail marketing and with social media carrying the perception of being free (which they so rudely discover it is far from free) this should make some in the banner and search crowd a little wary.

 

I have to agree with Al.Don´t forget the American innovative spirit.If we are getting undercut by cheap farm-raised, poor quality. That sounds like an opportunity to me. Define your product as wild caught, of course eco-friendly(fished with turtle extruder), better quality, fresher and better tasting shrimp. Then define your market and sell to those restaurants who understand the valuein your product. The marketing may take some work but I can almost guarantee that you can get the price you deserve especially if you throw in some of that american first class service. Let´s quit blaming others and get down to doing what we do best.

Posted by Kenny | Report as abusive
 

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