A drop in catfish inventory in 2005 caused a small, but much-welcomed lift in the price for catfish farmers for the second consecutive year.
According to figures from a report conducted by the USDA Economic Research Service, the average farm price for catfish rose 2 cents, from 70 cents per pound in 2004 to 72 cents per pound in 2005, while catfish processor prices also experienced a slight increase, up 2 percent from 2004.
The 2004-05 price difference was less than the sharp rise in price farmers anxiously embraced in 2004 after suffering with an average farm price of 58 cents per pound in 2003.
Jimmy Avery, Extension Aquaculture Leader, National Warmwater Aquaculture Center, Stoneville, Miss., said the rise in prices proved profitable for producers.
He noted another intrinsic factor that helped growers' overall finances.
“The rise in prices was good for producers but what helped also was that the cost for feed stayed relatively stable — in fact somewhat lower, from $300 per ton to $240 per ton — in 2005,” Avery said. “At that price operations are manageable, though not as good as they were a few years ago.”
The upward price shift prompted farmers, Avery said, to sell as much inventory as possible while the precious opportunity presented itself, consequently leaving most stock levels lower than usual.
“The price rise caused farmers to take advantage and sell as much as they could,” he said.
Avery predicted that inventory could remain quite low for fingerling stocks for the first part of 2006 until growers can adequately restock ponds.
Like all other sectors of agriculture, catfish farmers will continue to feel the pinch of higher fuel costs. But Avery said that if the sale price for catfish can at least sustain its current level, it should offset fuel prices.
In 2005, according to USDA statistics, catfish sales by growers to processors totaled between 605 million pounds and 620 million pounds, down between 2 percent and 4 percent from 2004.
That number reflects a trend of declining inventory beginning in 2004: Following a significant price drop in 2001 and 2002, when prices dipped to 57 cents per pound and 58 cents per pound respectively, many farmers scaled back operations.
In fact, in Mississippi alone catfish pond acreage decreased by about 9 percent — some of which has begun to be recovered thanks to existing farmers' expanding operations, Avery said.
It remains unknown exactly how much Hurricanes Katrina and Rita affected the aquaculture industry. Avery said answering those kinds of questions is a difficult process, partly because there is no reporting service to tally how many power outages occurred along the Gulf Coast.
“It's hard to assess. The damage was not big on the feed fish, but wind damage affected running aerators in some ponds. If you can't pump oxygen into the ponds you can lose entire batches,” he said.
Avery said despite recent trade legislation that favored U.S. catfish farmers in a protracted dispute with Asian fish importers, worldwide competition into the domestic marketplace remains a looming threat.
“The number of foreign imports is creeping back up from Southeast Asia, according to the Department of Commerce,” he said.
Based on feedback from talking to catfish growers at meetings in autumn, Avery estimated that most are cautiously optimistic about the economics of the industry in 2006.
“There is still a lot of anxiety that prices could fall like they did a few years ago, and it sends shivers up their backs because they know if that happens again it will be tough to keep their business.”