MFR PAPER 1104 lett CO\t Howe\er. the larger In\e~tment a~,>oclaled \\ Ith the largel \e'>'el IL Estimated Costs, Returns, and Financial ,>ulted In an annual II\ed CO~1 l'l S, IOA21. v.hleh meant net retuJll' Illi Analysis: Gulf of Mexico Shrimp Vessels the 66-to 72-1001 \e"el were .7.\ 111 01 S,X()9 le\, than lor the 5-'- to ()'i_ loot \ e"el WADE L. GRIFFI N, RONALD D. LACEWELL, and WAYNE A.HAYENGA C 0,[,> per pound 01 ~hnmp landed arc esllmated b) taJ...ln g total CO,1 (b) Ilem) and dl\ Idlng b) the numbel 01 pound, la nded. Table 2 Indleate~ INTRODUCTION CO~h per pound 01 ,>hnmp landed b\ Thl~ report rc~ult., from an eco­ changc, in th e ba,e 19 7 1 data 10 the lV.O \e'>'>el ,17e cla'>Slheatlom r l)tal nomic e\aluation of ~hnmp lant.!Jng~ account for co,t Ie\ el, e-.. perienced \anable co,t., lor the 53- to 65-10\)1 in the Gult of le\ico ba~ed on data In earl) 19 7-+. \es,el v.ere ~0.72 per pound 01 ,hnmp available tram the allonal I\lanne landed . The cre\\ and captain ,hare Fi~hene~ Sen ICC and 1\ IIHended tor BUDGET ANALYSIS wa, ~O 39 per pound. repall~ and financial in~titution~ . ~hrimp \e~~el maintenance 0 . 1-+ . and luel SO OX Costs and return~ for two ~hnmp owner~. and pro,>pecti ve ,hrimp \e,~el Fi\ed CO~h lor the ~mallel \e,""el, vessel c lassifications based on length owner'>. The first part of thi~ report were $0.20 per pound 01 ,hnmp land­ of \es~e l are compared on both a nnual indicate,> co~h and return~ ot shnmp ed. In,uranee wa, $0.08. Intere'>t Cl"t co~t and return ba,i, and on the ba~l~ \e~~eh In 1971. The ~econd part I~ an ju~t 0\ er j, O.06 and depreclallon lu,t 01 cost per pound ot ,hrinlp landed. in\e,tment anal)si,> Including ca,h under S,O.06. T o tal cn,t 01 a pound Annual COq and return e,tlmate~ are flov. and on a ,>hnmp 01 ,hnmp landed In 1971 With a :; 'I pre~ented in Table I a nd are ba~ed \e~,el entenng the Gulf ~hnmplng to 65-loot \ e"el wa, about S,0.92 on 1971 data taJ...en trom 2'1 \e~sch ~leet . The la,t ,eClion rdlect~ co,t I-or a 66- to 72-foot \e~~el. \ anable in two clas'>c'>. 53- to 65-foot and 66- co~t, per pound 01 ,hrimp were s,O 91 10 72-1'001. The a\erage \e"el In the Wade L. Griffin, Ronald D. 53- 10 65-foot cla,~ landed -+ 1.551 Lacewell, and Wayne A. pound~ of shnmp. which '>old at Table 1.-Annual costs and returns for a Hayenga are, respectively, nearly $1.13 pcr pound. }ielding a typical Gulf of Mexico shrimp vessel, 1971 assistant professor, associate gros,> rc\enue of $-+6.XOO. Variable Vessel size professor, and Extension Item 53-65 ft' 66-72 ft" economist (agri-business), De­ costs to land thc,e ,hrimp were partment of Agricultural Eco­ 30.031 . The large,t \anable co'>t Gross recetpts nomics, Texas A&M University, from productIOn $46.800' S69869' item~ were crev. and captain ..,ha re, Variable costs College Station, TX 77840, ( 16.380). repair, and maintenance Ice 896 1 450 and economists with the Tex­ Fu el 3,148 7 101 as Agricultural Experiment ($5.728). and fue l ($3.1-+8) . ThiS left N els 704 680 Station and Texas Agricultur­ $ 16.769 income abm e \ariable cost~. Supplies 1 141 ) 08< El ectrOnics 662 ' 02~ al Extension Service. This pa­ Annuali zed ti\ed co,t, ba,ed on 20- Repair and maintenance 5.728 q Pa Cki ng 1 372 2 88~ per is Technical Article 11219 year ve~~el life . including deprecia­ of the Texas Agricultural Ex­ Shares 16.380 2 .... ~ Subtotal , periment Station. For the com­ tion . on in\eqment and insur­ 3003' "1 p lete report, refer to Depart­ ance. were $X. I-+-+ . which re,ulted in Income above ment of Agricultural Economics total cost~ of $38. 175 and net return ~ varia ble costs 1676q 18 Technical Report No . 74-1, FIXed costs of $X.625. ' De p ree I a t I on 2 32q Texas Agricultural Experiment 15, The 66- to 72-foot \ e"e l~ landed Insurance Station, Texas A&M University, Interest 266< 113" more ~hnmp (56.'133 pound~ com­ Subtotal 8 141 1042 College Station, TX 77840 . ' pared to -+ 1.551 pound,) and recel\ed The research upon which this Total Cosis 38 75 O~ ) paper IS based was supported a higher price (nearl) 1.23 com­ N et returns 862" "181b in part by funds prOVided by pared to almost S 1.13 ) than the '>mall­ the U.S. Deoartment of Com­ IOala are from a sample cf 8 vesse·s veSSt er \e~,eb. Thi, higher price for .,hrimp life IS based on 20 years and 2 SOC f'S~lng merce, National Oceanic and days Straight line deprec alIGn nteresl art Atmospheric AdministratIOn, for the larger \e~~e l , i, due to their base.d >n an 8 percent annua National Marine Fishenes trawling In deeper v.ater and la nding rate Captain ar"d crew 5 35 percent )f catch value Service, under Contract No . larger ~hriJllP. G I 'O"'~ return, for the :!Data are from I sample c f 21 vesse 5 Vessel 03-3-042-19 with the Texas Ille IS base j In 20 years and 2 500 Ils~ ng larger \e~,el ,ile v.ere S69.X69 In 1'1"" I Agricultural Experiment Sta­ days Straight Ine depreClal In I nlerest >n /Jon. Sincere appreCiatIOn IS Vanahle co,t, v.ere ~51.632. \\hleh Investment b?sed >n an 8 pert,;ent an Cl rate Capl a 11''' and rev. share IS 35 .... ( tor. expressed to Dr. J. D . Green­ catch value field, NMFS regIOnal econo­ 'In e,labl"hlng oerlCLlallOI1 ano 1I1tt:rC,t ~The 5) te 65 f)Ol st'llimp "esse ... en :J mist, for aSSisting In obtaining charge,. ~n IJ1\ C,tI11CI1I 01 ~'0.5~4 " u,eo average .J 1 ,51 heads c ff poundS t S r mp at an average pr e per pound "I 51 126 the cost data used In thiS tor 53- to 65-foOl \"",,1-. .t 110 'q5.!Cn tOf 06- to 72-foot \ c"d, In c"dllallng a ranic jThe 66· tc ""'2 ·f,· shrimp "ess ar rl a aJerage 56 g~ ~ heads Off poundS c; r 1T10 d study and for suggestIOns ular \e"el. the Ii,co C\hh ,houlo he fecal helpful In the analYSIS . LlIl~teo u"ng actllal'J1\'c,tI11Cnl (lIthe \L'''cl an average peper pound )f S 1 227 Table 2.-Cosls per pound of shrimp lended I().()()() ,dl\;lgl' \,dlll' \\;1, 11lI..llIdu l for a Iypical Gulf of Mexico shrimp vessel, 1971 .I, IIIL\lIlll' III \l'.I 1 '() I Ill' .I111111.tI L',,,h 11(,\\ tldl" h"wd Ilem 5365 II' 66'2 II' \' 11 ':\lc'II1,tI 11I1.tllL'1I1' .tll· .,1111\\11 III Va"able cosls I "hie \ 1"1 I Ill' 1\\\1 \l·"'l·1 cl.""lll.t Ice $00216 $0 02~5 Fuel 00758 o 12·\8 11"11, \ 111111.tI ld,h 11,,\\ III Ilil ""l1l'l Nels 00110 00119 \,1 Illl ~ \ I" h~ 111111 \l'>'l'l 111 \l'"" Supplies 00275 o 03bb Eleclronlcs 001')Q 00181 IIH""gll h I" -1.22'1 .,II1C': 'I. \, Repair and ma,nlenanCt"' o 1 9 o 20Q8 .1111111.11 Il1ll'll,.,1 .til" 111.111 IC·I'.I\11Ic·111 Pacl"ng 001 0 00 07 Shares"1 o 39J2 o .\,q, I, dl'dIlL'lnl IIII"l'\l'I .• tl1<'1 \C.l1 ii, Sublolal 006§ ~ .1111111.11 c.I.,1l 11,,\\ h' till.' \l" c'l ,I\llCI Fixed costs II1LIL'.!"·' I" hI \ .tl1d LIII1I1I11tc; DepreciatIon o (,S61 U 0'78 o '0 Insurance G 0758 o ObJ .I I I Il I" In c·1 I 11 I , 'I I g 11 c·.t I ~ II \ C ,cI • Interest I {, Jb 1 o Ob03 II1\c'.,1111c·111 "., c'd "" .t dll\\ 11 1',1\ tlll'lll Sublota "i191i o 1'130 (,I 211 I'C'ILl'l1l t,l ~,..-. \\(,ltI" I\: • 0 Total 'as s II 17 Ihl' 1l1l'.tll I ltc' r.,\h,ll.

IBased on 8 veSSt Is and vessel Ide Cl 0 V 'lf~ I'L'II"" \\I'lIld hl' ,th'\lll _ 7 \1:.11 --~~~~--~~------. lBased en ")1 v~ssels a,-.d \t'ssel It 0 1\11 11lL: hll III 7_-1, ,'t \1:' d ;;',1 It years iCrew and capla n sharf' IS C.l Cu ~ted 11\1\\ 111 \C.II' Ihl"lI -h II I' 1.71)7 percent o' the value vt the "",atch IIILi Col l' I'lf \ .:,( 'Interest charge v·.. as calcu lied ~y ,,, ar ,I" .til" I,' 'i r 1& "6r vestment P JS salvage d vld 'j b',' nd 'he 1111\l\IL!h 211 I III ,11 111\c; IIllUlI (,I result mull plied by 8 per .... t nt 1'.1\ 'Due to r 1undtng olf the I('IA n y eQunl 1-.111-1 Ill.: h.ILk I'd" d \\ 1111 III FIQur. 1 Pre, nl velue 0 1 .;tpected .Ir.ern summal un cf 3.11 (oSlllem~ hl ' .'11 c' rli1ldll'd " \ \C,II ot Incom, lor I 53· 10 65"001 thr mp ves.el II III,rnllrve d.,count ratet I •• umln; • 20· \nl1l1.d e',I,1I II"" cl.11.1 \ IIhlll1l .,. •• r operating life E.ternll hnanel"; flop) and li\.:d Lllq, \\ ':"L () I I (11,d ul,1 11,ln':t1l1! I'll: III 1.lhlt: I,n 01 I Ihrlmp v •••• 1 I.tume. 20 percent do.,n Ind Ihe bll.,ce 'Inlnced tor 6 fe.,. It 8 per pllund llf ,hrlm!, hlllckd \\.t, I Ill) hllih \1: 'I lie' '1IIc.tl tl'l1 I hi p"rcent Internll 'In,nclng (bOItOm) '.Iume. th. o wn" ply I Ih. tall I '9"t •• 1 prlC' al the for Ihe 116 tl' 72-lt",t \.: LI. ,'r () 1- I1c'l e,,,h 11\l\\ 1\1 ,I\II1Cr 11m. of purchl.1 more th.tn 'ur Ih.: ~ \- 1,1 h~-llI"1 .t 11 c' 111ll.11 ul ,I \ e ...... :1 h - -I, h'l \ C t:I ,Itld Illr ,I 6( to _-\1,( t I:d l n .. purLh'l I: The ,1\': dg.: .:\-\.:"cl pftc'': \\1 pr eL 01 rh~ 111dllcr .,hrImp \\.1'" . I 11 I\'r Ih.: -- Itl h~­ Table 3 - Investment Ina'yll. lor shrimp \L d Ihl. \(luILi hI: vessels uSing eXlernal fInanCing 1971 dala fllot \.: cI ,Ind . I 2 \ 'l'r I~C hh I" ,Ib\. UI _ \ c,lr cO Ip.JrcLi t, 72-fllot \c.,..,el. 'Thcrel"r.:. nCI rC\':IlUl - 2 \1:,11"'> "'r Ihe 1.lre.:r \1: .: \\ hKh t· per pllund llf hrtmp \\,],> II 21 ,InJ hd .10 I: tlOldlc'L1 pur 'So. I-\, fLlr the '\ \- t,l ()'i-I,I\'t .Ind hh­ A 11 c w C}u'1l 211 Gr ss' er",e S 8 to 72-fLllll \e~,ek r.: r.:LtI\el\ I h.: C sh o~eraltn •• p I hl' J,lt,1 til 1 dhlt: ,.I!ld" pr HILIc Ilc"," ".~ner I,Hger catch a,,,,'ciatcJ \\ Ith Ihc 1,lr),!.:" Ih.: h,1 I 1\11 d prc,,:111 \.!Iu.: ,111;J1\ lor years' 20- • 61 14 \essel re,ult.:d In t,llal dnnu,t1 n.:t rc­ nlerest 31"'1 I an I h.: rrc cnt ,du.: \.1 Ih.: IrL',11ll 01 rePdymenl 9 8A 12 44 turns beIng f,lIrh cllmpaf'lbk c'ash fioy. '(\ ., ..... nef pI'': cnt- lor 'years 1 ti- L:d ~r.lrhIL,tll\ In II!!lIr.: dnd 2 Il)r INVESTMENT ANALYSIS V sse I OY. ner In'Jesl-ent Payback perIOd Ill.tli ,ll1d I.II!!': \(' d rc P':L·tl\e". Intenle\\s \~tth \e\sel butlder., In­ I<'r .111\ InIL'rn,d I,ll': "I rL'turn Ir,lIll This analySIS S baseo dIcated a t~ plcdl h2-fllLlt \ L"el C,"h menl of minImUm do..,..n In p.:r~.:nl h' -n pcr~cnl I,lr.lll tllIC t­ ,Ibollt $72.000 fulh ngged and read\ fmanclng tor the ba anc. m.:n! \\ Ilh ,Ind \\ IIh"UI ItIldnl'lll!! Th.: payment was ass med to tra~1. To tra~1 In deerer \\ater .tnd 'The balance 01 Ihl' vessel purchase pr ce 80 rdt.: ,'I relurn l'n th.: In\.:,IIl1.:nt I percent) IS paid over a 6·'Year period and s engage In longer trips. the Initial In­ deducted Irom vwner relurns The S10000 sal Id.:nllllc:d .I' Ihal IIll.:re,1 rdt.: \\hlch ,estment for a \essel o~ner clluld vage value would alsG be Income n year 2C ':L\UdIC, thL rr':'L'nl \ ,tluc "I thc ,1\\ n­ :tActual cash outlay lor vessel purchase (In\ est­ Increase to In er $ 1-10.000 Such a men!) s 20 percenl 01 purchase price ':1'\ n.:1 InCl'I11C tr':.1111 1" Ih.: ,)\\ ncr vesse l would be appro\ll1lalel~ 75 \eet IIlIII,1i In\':,II11.:nt.

long and be eqUIpped \\ Ith a refrigera­ Table 4 .-lnvestment analYSIS for shrimp \\ Ilh c\t.:rnal Imallclng. the pr.: cnl tion unit. vessels ' Without , 1971 \alu.: l,1 Ih.: n.:1 C,I h Ihl\\ g.:n.:rated In estimatIng the cash nO\\ O\er Vesse size h\ ,I "3- Il' 6.- -lllLlt ,hrll11!, \ .:""cI 7 the 20-year life of the vessel. t~o lIem 53·65 II 66. 2 It I !-Ig I. Illp) '" .In e.,lll11dtcJ ::, .... ".000 arrangements were investigated' (I) Annual cash summary al It) p.:rcent. 50.UnO.l1 15 perc.:nt. leveraged investment where the own­ Gross revenue $48 600 S69.869 . 35.0()() at 20 p.:rcent. '.211.IHHI at Cash operaltng • er's inve tment was 20 percent of the expenses 33 187 55.328 30 perc.:nt. 1-1.000 ill -HI p.:rcent. Nel cash flow to purchase price and 80 percent wa~ owner:!: 13.613 14.541 and') 11.000 al 50 percent Inc.: Ih.: Ananced at 8 percent interest for 6 Vessel owner Investment 56.584 75.820 In \e.,lment I' all e,tll11ated '11.31'. Payback perIod 4 16 yr 5.21 yr years. and (2) a situation in w hich the Ihe Inlcrnal rale Llf return \\ould be investment was equal to the purchase 'Based on a 20-year vessel Itle ju,t k~ ... Ihan 50 per.:enl. Therefl1re. 'The assumed value 01 $10,000 would also be price. In both cases, an ass umed added 10 tncome tn year 20 If an In\e,lo r\ reqUired rate of return

2 affcct the re s ult~ . For e\ a mple. the with the shrimp is cauti oned addition o f ma ny vessels to the in­ to stud, very carefull , all the ramifica­ 70 dustry could be expected to reduce ti o n. of vessel ownership prior to 60 catch per vessel. These limitatio ns investmc nt. 50 ~hould be kept in mind whil e review­ COSTS ADJUSTED 40 ing the present va lue a nal ys i ~ pre­ 'a 0 for a 20-year period. it d oes provide Z this point refer to 197 I survey data. ~ => 20 30 40 50 a basis for consideri ng investment in A preliminar, urvey conducted early 0 'A J:: '40 ~ shrimp vessels. The reader i~ o nce In 197-+ indicated that costs. o ther '":3 '20 again reminded of t he sensiti vit y of than fuel. increased by 19 percent ..> '00 the a na l) s is to c ha nges in catc h. costs. s in ce 1971. Fuel co~ts have in creased I- Z a nd shrimp price . Also. the data are i!l'" 80 twofold to threefold . To account fo r a: "- based o n th e assumptio n that th e ves­ the upward shift in opera ting costs. 60 ~els are manned b) experie nced cap­ thc 197 I da ta were adjusted to show 40 tains and crew,. The ves~e l owner the break-even impli cations for shrimp 20 is vulnerable In that vessel perfor­ vessels. mance is entire l) dependent o n th e All costs except fue l a nd crew a nd INTEREST RATE OF RETURN captain a nd crew. Therefore. th e capta in s hares were inAated 19 per­ In vestor who is not intima tel y fam ili a r Figure 2.-Present value of expected stream of cent from 197 I levels. Fuel cost was income for a 66- to 72-foot shrimp vessel at alternative discount rates assuming a 20~year operating life . External financing (top) of a Table 5.-Annual costs and returns for a typical 53- to 65-foot Gulf of Mexico shrimp vessel, shrimp vessel assumes 20 percent down and 1971 data adjusted to early 1974 conditions. the balance financed for 6 years at 8 percent. Internal financing (bottom) assumes the owner 1971 Esl,mated SprIng 1974' pays the total vessel price at the time of purchase. Fuel cost Fuel cost Item Actual Break-even doubled t"pled less tha n the Interna l rate of return Gross rece,pts Irom (SO percent In th is casel. the anal) sis productlOn2 $46,800 $33,530 $43,825 $48,668 Indicates the Investment would meet Va"able costs Fuel 3, 148 3,148 6,296 9,444 the return goa b of the r o tentia l Other 10 ,503 10,5 03 12,499 12 ,499 . With internal financing. Fig­ Shares' 16 .380 11 ,735 15,339 17 ,034 Subtotal $30031 $25 .386 $34,134 $38977 ure I (boltom) indicate~ that the Income above variable costs 16.769 8,144 9.691 9.691 Internal rate of return is a bout 2-+ F,xed costs 8 .144 8,144 9.69 1 9,691 percent . Total costs 38.175 33,530 43 ,825 48,668 N et returns 8.625 0 0 0 A similar pre~e nt value ana l)sis is Actual price presented in hgu re 2 for 66- to 72- rece'ved per Ib' 1 13 Break-even price per Ib' 0.81 105 17 foot vessels. The internal rate of return with external financing i~ a n e~timated 'All variable costs except fuel and crew and capta,n shares were Increased 19 percent 'Based on annual catch of 41,551 pounds of head-off shrimp 30 percent. This is compared to 17 "Crew and capta,n shares are calculated as 35 percent of the value o f the catch. percent With total vessel price paid at 'Ex-vessel price per pound of heads-off shrimp the time o f purchase. For both vessel Table 6.-Annual costs and returns for a typical 66 - to 72-foot Gulf of Mexico shrimp vessel, s ize clas~ificatlon~. the rate of return 1971 data inflated to early 1974 conditions. on i n\ est ment IS higher USI ng e"\le rna l 1971 Est,mated Spnng 1974' fi nancing. Comranng the two vessel classes. the internal ra te of return is Fuel cost Fuel cost Item Actual Break-even doubled tripled significa ntl) la rger for the 53- to Gross receipts from 65-foot \es~el using either t) pe of productlon~ $69,869 $57,845 $77.691 $88 625 fi na nc ing. Variable costs Fuel 7, 107 7 107 14.214 21,321 Caution i~ advi~ed in Interpreting Other 20,07 1 20,071 23.884 23.884 the present val ue a n a l ys i~ . Fir~t . the Shares:' 24,454 20,246 27 192 31.919 Subtotal $51 ,532 $47.424 $65.290 $76,224 more ri sk involved in a n IllV e~ tm e nt. Income above the la rger the rate of re turn necessary variable costs 18 .237 10421 12.401 12.401 F,xed costs 10.421 10.421 12 ,401 12.401 to make a profi table inv e~ tm ent. Sec­ Total costs 62,053 57.845 77.691 88.625 o nd. the minimum interna l rate of Net returns 7,816 0 0 0 Actual price rcturn required of an in vestme nt for a received per Ib l 1 23 given risk Icvel varies among investo rs. Break-even price per Ib' 102 1.36 1.56 Lastly. this analysis is ba~cd on 1971 IAII vanable costs except fuel and crew and captain shares were Increased 19 percent 2Based on annual catch of 56.933 pounds of heads-off shrimp information. Shift~ in shrimp catch "Crew and captain shares are calculated as 35 percent of the value of the catch o r price. o r in industry costs. will 'Ex-vessel pri ce per pound of neads-off shrimp

3 shnmp to $ 1.56 per pound. 5'\ percent above 197 I . 10 1971 NET RETURN f-J gure '\ \how\ e\pected nd return\ LEVEL 8 for 66- to 72-loot \e\\el\ at a lt ernative ~ 6 \hril11p pnce\ U\lng the 1971 CO\!\ ~ a nd with two Ie\ e l, 01 In crea\ed CO\ t\ z 4 UTfRNA IN fFHlAL '"a: t y I U\ 'I i:? I n I tJ7 I, Indi cated h) the hOrt/llntal ~o , w ,. , a: 2 lin e. the '!> 1.2.'\ pnce recel\ed prp­ , , ~ 40 , , z duced a 'i7.Xlh net return H oweler ? , , 0 o , , that ,ame annudl nel rcturn with a ,, ,, I':> percent Increa\e In CO\t\ and With ,, , luel Cl)\t dl)ubled I\()u ld re4111rc ,hrtl11p , , I Figure 3.-Net returns and shrimp price rela ­ pnce., 01 'i I '\h per pounu. and I 77 .. I ~IP F 97 O 3 'Xl increased by 19 percent over 1971 costs. Data Il)r the '\ ~- tIl h - -Inllt I e\,el Ar"dA AVE"OGE PR E PE" POI.."O HEADS OI'F Price per pound is ex-vessel value for heads­ off shrimp. arc ,hl)\1 n in I igurc 4. In 1971 a Figure 5 - Break- even price at Ihrlmp for net return of . X,h2~ wa\ llhtalned at 53- to 65 - toot ve •• ela at various level. of a ,hnl11p pnce nl I 13 I II maintalll return on Inveltment tor 80 percent external 10 fjnanclng and 100 percent Internal finanCing th" lelel 01 net re\ellue \\Ith ,I 19 8. pen.ent Cl.l.,t Increa,e \hnl11p pnce W lluld hal e tll he "I ~6 per pllund g 6 g. \\ Ith ILlel Ltl\t ulluhleu, anu I 4 .z ~4 1\lth luel clht tnpleu w z '" . I I !5 2 Ilgure\ '\ anu h Cllntaln a pn.:\ent ~.'" ~ > 0: I alue anah "\ Illr \l11all anu largL' z .... 0 w z 40 z I es ... eb. re'pectl\ el . II hlch udermllle\ o -2 Z the hrea"-elen annual u\ cruge pnce Q: ~ll ;> $080 1.00 1.20 1.40 1.60 1.80 of \hnmp that a I e\\cl ll\\ ncr mu\t PR ICE PER POUND '"a: L .... hale fl.lI· \arH1U\ Ie\el\ III return lln Z Figure 4.-Net returns and shrimp price rela­ w tionships for 53- to 65-foot vessels. Cosls, Inle\tment f Igun: ~ indicate., u'l11all a:<.> w other than fuel, crew, and captain shares, were Ic.,\el ll\\ncr \\l)uld h,t\e tIl rccel\c 0. increased by 19 percent over 1971 costs Price $(, 5V 200 2~ 300 per pound is ex-vessel value for heads-oN ':, I 2() pcr pound tl.l llhtdln a 2() pcr­ A'~ A .. A E"AGE pI>.E PE~ POU' e\ternalJ~ $0.81 per pound The estimated 197-.+ and -I 50 per pl'und ILlr double anu linanced fllr ,'0 percent llf \e\\el co t break-even pnce of shrimp IS SI.05 triple fuel pnces. re.pcctl\el) The hrea"-e\en price per pound for per pound. With fuel costs doubled hgure 6 Indll::ate\ that tor a large head,-ofl ,hn mp f 1.1r ,mall \ e el and other costs increased 19 percent. vessel owner to ma"e 20 percent re­ 0\\ ner., tll Ju,t ma"e pa) menh 1L1r the this is an increase of approximatel) turn on Inlestl11ent \\ Ith e\ternal fi­ lir t h )ear, \\Ith Cll,t merea ed 19 30 percent from the 197 I level . For nancing. he would hale to recel\e percent abll\ e I'r I ano fuel co~t the smaller vessels, with the same 19 1.50 and I 70 per pound for d luble doubled ano tnpled I, 'S 1.27 and ~ 1.3,'. percent increase in costs and fuel and triple fuel pnce\. respectl\el). re~pectl\el) Imtlarl). for large \e el price tripled. the brea"-even price of F-or a \cs'>cl internall) linanccd to Ol\ner,. the price of ,hnmp I\ould shrimp increases to $1.17. or an in­ achlele 20 percent return on in\est­ hale to be 1.:7 anu - 1.76 per pound crease of 4-.+ percent compared to ment a \e,sel mIner would hale to \\ Ith double and tnple fuel prtce. 1971. receive S 1.70 and 1.90 per pound re,>pecti\ el~. to generate sufficient Similar information on costs is of shril11p with double and triple income 10 meet l11onthl~ \es,el pa~­ presented in Table 6 for a 66- to 72- fuel prices. respectivel). ment.,. foot vessel. The 1971 break-even price of shrimp was $ 1.02 per pound. With costs in creased 19 percent and fuel MFR Paper 1104. From Manne Flshenes Review. Vol. 36, No. 12 , price doubled. the break-even price December 1974. Copies of thiS paper. in limited numbers. are increases to $ 1.36. or 33 pe rcent available from 083, Technical Information DiVISion. Environmental above 1971. Tripling of fuel costs Science Information Center, NOAA, Wa shington, DC 20235. increases the break-even price of

4