Florida Shrimp Industry Analysis

Topics: Shrimp, Retailing, Aquaculture Pages: 25 (7421 words) Published: April 2, 2012
Industry Analysis
What if it were logical and profitable to merge two of the fastest growing shrimp industries in the United States today? That is exactly the idea behind “bait shrimp production”, the latest development in the combined evolution of the valuable live bait shrimp industry and the continual growth arena of aquaculture. Farm-raised bait shrimp is a very appropriate combination of the two businesses; both have a historical development in Florida for over forty years.

Florida has been proclaimed the “Fishing Capital of the World” with its 1,197 statute miles of coastline hosting 3.4 million anglers annually. The statistics regarding the recreational fishing industry in Florida are astounding. The Florida Fish and Wildlife Conservation Commission (FWC) reports: •The economic value of recreational fishing to Florida is $7.0 billion and supports 75,000 jobs. •Recreational fishing is the second largest sports industry in Florida with over 700 world-record fish caught. Live bait shrimp is the nucleus around which evolves Florida’s saltwater sport and recreational fishing. It is the preferred bait for fishing near shore species such as snook, sea trout, redfish, snapper, cobia and mackerel. The business of catching and supplying live bait shrimp began with a few individuals supplying themselves, and a few bait shops in the 1950’s to becoming a multi-million dollar industry with exports throughout the Southeast United States. This growth is a testimony to the pre-eminence of shrimp as the most popular live bait among saltwater anglers in Southeast United States.

The message is clear --- the recreational/sport fishing industry and live bait shrimp are well established in Florida. And their popularity is growing amongst the14 million people (75% living within 10 miles of the coast) and the 40 million tourists who visit each year.

Commercial fishermen currently supplying 100% of the bait shrimp market experiences regulatory restrictions, seasonal declines in wild stocks, and unreliable labor causing unpredictable shortages and as such are unable to meet the increase in the market demands. The FWC and Florida Department of Agriculture and Consumer service reports: •As the tourist and recreational fishing industry continues to increase in Florida so will the bait shrimp business. •Fishermen love to use live bait shrimp and retailers are always running out of bait before they run out of customers. •The retailer wants consistent deliveries of bait shrimp in numbers that will keep the customers walking through the door of their shop •Although the fishing effort has increased 50% over the past ten years, the live bait harvesters cannot meet the market demands.

This increase in demand without an increase in supplies has resulted in an extremely high dollar value of live bait. This increase in demand, low supply and high dollar value has attracted the attention of shrimp producers.

Now for the other half of the combination -- shrimp aquaculture. As the demand for live bait shrimp has expanded without an increase in supplies, the inevitable has begun to take place --- culturing Florida’s endemic penaeids for bait size shrimp using hatchery and production technologies developed for other economically important penaeids.

Wholesale distributors cannot get adequate supply of bait shrimp certain times; retailers are forced to accept inaccurate counts and variable sizes of wild bait, which they will loose almost 30% in mortalities during the course of the day. Retailers cannot consistently provide the customer with the desired size and often sell “mixes”. Fishermen are reliant on the seasonal migration, molting periods and life cycles of the natural population; as such they cannot guarantee quality or volume. Shrimp spawn in April/May releasing eggs that move with the tides and currents into estuaries, where they spend their postlarval and juvenile stages before migrating back to deeper waters. Bait size...
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