HALL COLUMN: How about a nice, big plate of catfish?
Published 12:00 am Wednesday, March 21, 2007
No shortage of victims exists in the news that Southern Pride Catfish is consolidating their Demopolis operation to their Greensboro processing plant.
The most obvious victims are the approximately 150 contract employees and up to 25 salaried employees who will lose their jobs. They will suffer the most, at least in the short-term.
Then there are the approximately 120 employees who will now have to work in Greensboro if they want to keep their jobs. While they are blessed with the prospect of continued employment and even provided transportation, it does not come without inconveniences.
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Next, Southern Pride itself is a victim. Their operations are changing, and it will most certainly adversely affect their economic forecast for the short-term, if for no other reason than they are having to deal with a supply shortage that prevents them from meeting the benchmarks they would have set under a two-plant operating model.
And what about the farmers? The consolidation means one less processing plant to whom they can sell their product. Of course, their opportunities are still good right now, but possibly only for the short-term. Too, their good fortunes (i.e. higher prices) come after a devastating couple of years at the beginning of the decade when several farmers went under or got out of the business.
As for the consumers, most people seem to think it will affect them the least. But if the catfish industry continues to face hard times, then eventually the consumers will pay even higher prices at the grocery store or be further tempted with low-quality fish from foreign ponds.
Victims. All of them.
So what led to the point where we now sit?
A little history, via Jesse Chappell, an aquiculture specialist for the Department of Fisheries at Auburn University, and a couple of extension services.
In 2002, the pond price fell to a low of about 52 cents per pound. According to the Mississippi State Extension Service, the average industry pond price was 57 cents per pound in 2002 and 58 cents per pound in 2003.
Catfish farmers in the South were hit hard, and many were not able to weather what would turn out to be nearly two years of low prices.
Chappell said the result was some farmers making tough decisions &045; like turning their efforts to row crops &045; and other farmers eventually losing their farms either through selling or closing down.
The most dramatic effects were felt in Louisiana and Mississippi, but Alabama farmers were not immune, Chappell said.
Since that time, pond prices have rebounded. The Alabama Cooperative Extension System said the average pond price was 72.53 cents per pound for 2005 and 79.46 cents per pound for 2006.
However, feed prices started rising substantially in 2004, when they hit a record high of $270 million per ton. Terry Hanson, an agricultural economist at Mississippi State University, told The Washington Post last year that rising feed prices have all but offset the rebounding pond prices farmers are paid by processing plants.
In Mississippi, the largest catfish producing state in the nation, farmers were hit hardest. That meant supplies for processors were scarce, which drove up the pond price. Today, the pond price is between 80 and 85 cents per pound.
Alabama, Louisiana and Arkansas processors have matched the price of the Mississippi Delta to remain competitive.
David Bleth, vice president of catfish operations for American Pride Seafoods and general manager of Southern Pride Catfish in Greensboro, said that his company is paying 80 cents per pound to farmers, whereas most processors in Mississippi are paying 85 cents.
The difference, Bleth said, is that Southern Pride has their own harvesting operation, which they run at a cost of 5 cents per pound.
Despite the competitive prices, Southern Pride is facing what Bleth said is an industry-wide problem &045; a supply shortage. Bleth said, however, that there is still a high demand from processors such as Southern Pride.
According to the Alabama Cooperative Extension System, U.S. processors processed a record 661 million pounds of catfish in 2003. Since then, the annual totals have been 630 million pounds processed in 2004 and 565 million pounds in 2006.
Bleth said they did better last year than the national average as compared to their budget.
Another major threat to both U.S. farmers and processors is global competition, mainly from Asian markets such as Vietnam.
A thriving catfish industry there will deliver catfish to U.S. ports for as much as 15 cents per pound cheaper than domestic pond prices, according to the Mississippi State Extension Service.
Chappell said this threat is very real, one that U.S. farmers must decide how they will approach.
For one, Chappell said that most of the catfish from overseas is of lower quality, due to a lack of government regulations that assure only safe procedures are used in growing and harvesting catfish. It is this same lack of regulations that drives the price down.
Still, Chappell said the opportunity for U.S. farmers to overcome the challenge is great.
In the short-term, the local news is not good. The long-term prognosis, however, depends on many factors, and each part of the industry &045; farmers, processors, consumers and government leaders
&045; will play a part in ensuring the continued success of a vital U.S.industry.
In short, eat more catfish.
Sam R. Hall is editor and publisher of The Times. He can be reached by e-mail to firstname.lastname@example.org.