Wednesday, July 06, 2005

Shrimp and Free Trade

On the last day of June 2005, the Senate approved the bill authorizing the Central America Free Trade Agreement. Not by much of a majority either. What is this going to do to fishermen? you might ask. It's going to force producers in this country to scramble to keep their markets. The processing plants that have done all the marketing in the past won't care much, at least in Alaska. It's the fishermen alone that will have to get together, if they can, and brainstorm how they are going to survive this latest challenge.

In the Associated Press report on this issue on July 1, President Bush was quoted as saying CAFTA will be good for labor, etc. If you are a producer such as a fisherman or farmer it's not immediately good. Your competitor's products will become more competitive on the U.S. market. What's good is that you'll be back in P.E. class being forced to excercise.

Fishermen and farmers will be forced to find new markets, improve the quality of their products, or cut their production costs. First, production costs are going up in all categories. Fuel alone is going to break the bank of some producers says one ex-Alaska plant superintendent. Second, the products of American agriculture are the best around. At most risk is the sugar beet industry. The Administration has promised these growers that it will fund a feasability study on ethanol production from sugar beets. Improving quality equates to product forms more in line with consumer preferences. Going quickly are the days of your basic black Ford. Man, that's taken a long time for some products.

This may be some consolation. One Democratic Senator from a sugar beet state who voted for CAFTA says they aren't sure what the outcome will be. How reassuring is that for those who finance the sugar beet farmers? Also, do we really know the quality of the competition's products. The shrimp that are farmed in Central America, and it's a large and growing quantity, are sure to have health issues, just like farmed fish anywhere.

The farmed shrimp taste just as bland as farmed salmon, compared to the wild American product. There isn't a thing we need to do to increase the quality of our shrimp. Price point is the idol of the supermarkets. Farmed raised shrimp from Central America might just be the silver bullet for our shrimpers.

If you want to pursue the quality issue to do a comparison between wild shrimp and farm raised shrimp, first you have to file a Freedom of Information Act request with the Food and Drug Administration. They keep truck loads of reports on the fish products coming into this country. the problem is that the reports go to a lab in D.C. and that's the last they are heard from. Anyway, that's the story from someone who personally saw the process.

Was the recent closing of the Petersburg shrimp processing line tied to the impending spike in competition from Central American shrimp? Norquest is saying that the timy delectible salad shrimp from around S.E. Alaska are getting too small. Salmon are smaller some years than others, but the salmon packers don't quit buying salmon. Their production costs are just a little higher.

Klaus Stolpe, a life-long Petersburgite, wrote a great article for the Petersburg Pilot, which was run by some other news organizations as well. To the Pilot's credit, they now have a local that can put some heart into fisheries reporting. Klaus was able to explain how this one production line pulled Petersburg through the Great Depression, gave many a newcomer their first job, gave an income to many housewives, and supported a small fleet of shrimp boats.

It will be hard for anyone else to take up where this plant, (Norquest) left off because of the lack of good dock space in Petersburg. A new dock would be cost prohibitive. The public dock might be used to unload, but the market would have to be a great niche market to warrant the trucking expense. I trucked snow crab to a plant I ran once, but the Japanese were paying good money and we were leasing a truck for a short period, so it worked.

This brings up the point that you don't have to keep using the latest equipment to make money in seafood. There's a lot of used equipment on the market and if fishermen were willing to train in different areas, they could pull off running a plant for some of these species that the big plants don't want to bother with.

When I was brokering smoked salmon in Arizona one winter, I ran into a guy who was putting on $10,000 business lunches at Sky Harbor International Airport in Phoenix. A few customers like that and you can put your peeling machines anywhere in town. Well, this kind of thing is what the Regional Fisheries Development Association are for. They will surely have a go-getter marketer that can find these niche makets in a blink. And if he can't, they need to get rid of him and hire a new one. These associations can do that where the Alaska Seafood Marketing Institute never could. Or I should say, nobody could ever hold ASMI accountable.

This is the process that President Bush calls "good for 'em." And it is, it's just a little painful doing something you've never done before. But the muscles are well worth it in the end.


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