The US Shrimp Market

The U.S. Shrimp Market: Trade, Consumption and Perspectives

Darryl E. Jory, Ph.D. James L. Anderson, Ph.D. Advisor Director, Institute for Sustainable Food Systems Aquaculture Business Development and Professor of Food and Resource economics and Support University of Florida, Florida USA Florida USA TRADE Where is it coming from? U.S. Shrimp Imports • The U.S. depends on imports for well over 90% of its shrimp supply annually. • The U.S. imports shrimp from over 50 countries around the world. • The value of imported shrimp in 2018 was over US$ 6.2 billion out of US$ 22.9 billion of imported seafood (27% of total seafood imports). • Imports in 2018 of 695,723 MT of shrimp - about 4.8% more than in 2017, and for the 3rd consecutive year established a new tonnage record – 664,201 MT in 2017 ( about 13.6% more than the previous year) and 584,447 MT in 2016. • India was the top shrimp exporter to the U.S. in 2018 with 247,783 MT, and became the first country to exceed 247,000 MT (500 million lbs.) of shrimp exports to the U.S. in a calendar year. • Following were Indonesia 132,317 MT, Ecuador (75,893 MT), Vietnam (58,383 MT), Thailand (49,686 MT), China (40,814 MT), Mexico (24,884 MT), Argentina (11,033 MT) and Peru (10,532 MT). Gorjan Nikolik Gorjan Nikolik Main Shrimp Trade Flows Major Shifts 2012 to 2018

2012 RANK MT 2018 RANK MT THAILAND TO USA 1 129,455 ECUADOR TO CHINA 1 299,513 INDIA TO USA 2 105,563 INDIA TO USA 2 248,160 ECUADOR TO EU 3 86,245 INDIA TO CHINA 3 179,914 INDONESIA TO USA 4 72,880 INDONESIA TO USA 4 130,042 INDIA TO EU 5 70,495 ECUADOR TO EU 5 103,294 ECUADOR TO CHINA 6 24,322 INDIA TO EU 6 75,361 ------THAILAND TO USA 7 50,107 Total MT 488,960 1,036,284 TOP 6 Main Shrimp Trade Flows Major Shifts 2012 to 2018

How will shrimp trade flows look like in 5-10-15 years? Based on US shrimp imports, a clear picture emerges of India substituting Thailand and driving growth US shrimp imports in volume (left axis) and value (right axis) ‘000 tonnes Million USD 800 8,000

600 6,000

400 4,000

200 2,000

- - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 India Thailand Vietnam Indonesia Ecuador Mexico China Others Value Source: UN Comtrade, Rabobank, 2019 Gorjan Nikolik …while China is the main demand driver, emerging as the new largest shrimp importer Global marine shrimp imports in volume (left axis) and value (right axis) tonnes Value in Million USD 3,000,000 24000

2,500,000 22000 Millions 20000 2,000,000 28% 18000 1,500,000

8% 16000 1,000,000 25% 33% 14000

500,000 12000

0 10000 2013 2014 2015 2016 2017 2018 USA EU China+Vietnam* Japan Rest of the World Total Value Source: UN Comtrade, Rabobank, 2019 Note: *We have used exports to China+Vietnam from World Gorjan Nikolik

The U.S. imports over 90% of the shrimp consumed

From Urner Barry From Urner Barry PRODUCT IMPORTS EXPORTS RE-EXPORTS BALANCE OF TRADE U.S. IMPORTS OF MAIN AQUATIC SHRIMP WARM-WATER SHELL-ON FROZEN 51/60 $100,487,643 $224,277 $43,630 ($100,219,736) SHRIMP FROZEN OTHER PREPARATIONS $1,008,816,803 $470,295 $661,678 ($1,007,684,830) PRODUCTS (78% OF TOTAL) IN SHRIMP COLD-WATER SHELL-ON FROZEN 26/30 $1,755,595 $251,764 $138,609 ($1,365,222) 2018, AND BALANCE OF TRADE SHRIMP WARM-WATER PEELED FRESH $1,690,060 $0 $0 ($1,690,060) SHRIMP WARM-WATER SHELL-ON FROZEN 41/50 $174,829,809 $408,132 $61,048 ($174,360,629) SHRIMP COLD-WATER SHELL-ON FROZEN 41/50 $1,837,625 $39,821 $34,890 ($1,762,914) YEAR DEFICIT SHRIMP OTHER PREPARATIONS $5,674,574 $4,193,832 $1,459,466 ($21,276) SHRIMP COLD-WATER SHELL-ON FRESH $2,196,083 $0 $0 ($2,196,083) 2011 -$11,090,034,797 SHRIMP COLD-WATER SHELL-ON FROZEN < 15 $8,306,325 $5,726,472 $195,201 ($2,384,652) SHRIMP COLD-WATER SHELL-ON FROZEN 51/60 $322,365 $68,683 $0 ($253,682) 2012 -$11,072,399,817 SHRIMP PRODUCTSShrimp PREPARED DINNERS IN ATC imports$2,825,595 accounted $254,862 $26,800 ($2,543,933) SHRIMP WARM-WATER PEELED FROZEN $2,712,600,709 $10,022,810 $8,189,358 ($2,694,388,541) 2013 -$12,233,035,913 SHRIMP WARM-WATER SHELL-ON FROZEN 26/30 $276,266,940 $1,217,387 $141,870 ($274,907,683) 2014 -$14,327,877,349 SHRIMP WARM-WATERfor SHELL-ON FROZEN27.7% 31/40 of$302,518,977 the seafood$701,745 $190,475 -$301,626,75 TILAPIA (OREOCHROMIS SPP.) FILLET FROZEN $463,162,756 $1,052,631 $4,352,167 ($457,757,958) 2015 -$13,063,669,721 TILAPIA (OREOCHROMIS SPP.) FILLET FRESH $142,992,314 $2,323,786 $13,667,540 ($127,000,988) TILAPIA (OREOCHROMIS SPP.) FROZEN $54,593,204 $742,333 $261,048 ($53,589,823) 2016 -$13,883,673,274 CATFISH (PANGASIUS) FILLET tradeFROZEN deficit$405,227,517 in 2018$0 $0 ($405,227,517) 2017 -$15,,680,087,945 CATFISH (PANGASIUS) FILLET FRESH $23,100 $0 $0 ($23,100) 6.8% CATFISH (ICTALURUS) FILLET FROZEN $30,302,661 $0 $0 ($30,302,661) 2018 -$16,747,599,027 CATFISH (SILURIFORMES OTHER) FILLET FROZEN $109,436,363 $0 $0 ($109,436,363) SALMON ATLANTIC FILLET FROZEN $591,695,168 $0 $0 ($591,695,168) SHRIMP, ALL FORMS, TOTAL 27.7% SALMON ATLANTIC FRESH FARMED $1,017,166,035 $59,028,860 $3,298,105 ($954,839,070) SALMON ATLANTIC FILLET FRESH FARMED $1,774,945,734 $0 $0 ($1,774,945,734) TILAPIA, ALL FORMS, TOTAL COBIA, ALL FORMS, TOTAL $6,976,070 $361,340 $98,491 ($6,516,239) 3.0% GROUPERS (all sp.), TOTAL $59,312,489 $0 $0 ($59,312,489) CATFISHES (incl. Pangasius), FLATFISHES (all sp.), TOTAL $310,593,786 $189,801,073 $4,133,704 ($116,659,009) SNAPPERS (all sp.), TOTAL $131,866,305 $0 $0 ($131,866,305) ALL FORMS, TOTAL 2.5% TUNA (all sp.), TOTAL $1,773,050,695 $51,098,171 $15,206,036 ($1,706,746,488) SHRIMP, ALL FORMS, TOTAL $6,239,606,673 $113,449,192 $21,975,101 ($6,104,182,380) SALMON, ALL FORMS, TOTAL 15.2% TILAPIA, ALL FORMS, TOTAL $698,488,266 $5,724,539 $18,927,909 ($673,835,818) TOTAL 48.5% CATFISHES (incl. Pangasius), ALL FORMS, TOTAL $558,531,021 $4,200,819 $571,964 ($553,758,238) SALMON, ALL FORMS, TOTAL $3,434,071,546 $64,353,876 $12,641,367 ($3,357,076,303) https://www.st.nmfs.noaa.gov/commercial- TOTALS - 2018 $22,920,950,783 $5,802,393,217 $370,958,539 ($16,747,599,027) fisheries/foreign-trade/applications/annual-trade- TOTALS - 2017 $21,945,979,556 $5,922,470,081 $343,421,530 ($15,680,087,945) balance-for-product Anderson et al U.S. imports by type to Sep 2019 From Urner Barry From Urner Barry From Urner Barry From Urner Barry Anderson et al CONSUMPTION Who is consuming what, how, where? U.S. per capita seafood consumption & composition SPECIES / CONSUMPTION SPECIES / CONSUMPTION DIFF. CHANGE % % OF TOTAL PRODUCT (LBS) 1987 PRODUCT (LBS) 2017 (LBS) 1987 TO 2017 2017 Tuna 3.51 Shrimp 4.40 2.11 92.1% 27.5% Shrimp 2.29 Salmon 2.41 1.97 447.7% 15.1% Cod 1.68 Canned Tuna 2.10 -1.41 -40.2% 13.1% Alaska Pollock 0.88 Tilapia 1.08 ------6.8% Flatfish 0.73 Alaska Pollock 0.78 -0.10 -11.4% 4.9% Clams 0.66 Pangasius 0.71 ------4.4% Catfish 0.60 Cod 0.66 -1.02 -60.7% 4.1% Salmon 0.44 Crabs 0.52 0.19 57.6% 3.3% Crabs 0.33 Catfish 0.53 -0.07 -11.7% 3.3% Scallops 0.33 Clams 0.31 -0.35 -53.0% 1.9% Other 4.76 Other 2.50 -2.26 -702.0% 15.6% Total For All Total For All 16.21 16.00 -0.21 -1.3% 100.0% Species Species • Two top-10 species in 1987 are not on 2017 list. Data from • In 1987, only one of top 10 species was aquacultured (3.7% of total consumption). • In 2017, 4 of 5 top species were mostly/exclusively aquacultured (54% of total consumption; 57% adding catfish). www.fisheries.noaa.gov/nati • In 1987, top 10 species consumed were 71 percent of total (11.45 of 16.21 lbs). onal/fisheries-united-states- • In 2017, top 10 species consumed were 85% of total (13.50 of 16.00 lbs). 2017 Foodservice is 65% of shrimp by volume

Shrimp sales within broadline foodservice increased nearly 10 million pounds to 255 million lbs. in 2018

Source: Shrimp Panel, 2019 NFI Global Seafood Market Conference Regional popularity by species in Foodservice

Source: Shrimp Panel, 2019 NFI Global Seafood Market Conference Peeled and deveined is 72% of Foodservice shrimp

Source: Shrimp Panel, 2019 NFI Global Seafood Market Conference 72% volume and 67% growth occurs at restaurants with 1-19 locations

Source: Shrimp Panel, 2019 NFI Global Seafood Market Conference Over 1/3 (36%) of all shrimp sold by Foodservice is in the South Atlantic States

Source: Shrimp Panel, 2019 NFI Global Seafood Market Conference Top four shrimp species sold in each census region

Source: Shrimp Panel, 2019 NFI Global Seafood Market Conference Household penetration at retail has grown 9%, while volume has grown 37% Shrimp retail sales volume

Source: Shrimp Panel, 2019 NFI Global Seafood Market Conference Percent of households buying shrimp at retail

Source: Shrimp Panel, 2019 NFI Global Seafood Market Conference Source: John Sackton, Seafood Datasearch – Aquaexpo Guayaquil Oct. 2019 PERSPECTIVES Increasing consumption

SEAFOOD: 16.1 LBS. (2017)

CHICKEN: 90.8 LBS. (2017) ABOUT 200 LBS (90.7 KG) OF BEEF, PORK AND POULTRY VS. 16 LBS (7.3 KG) OF SEAFOOD PORK: 50.1 LBS. (2017)

BEEF: 54.3 LBS. (2017) https://www.ers.usda.gov/amber-waves/2017/januaryfebruary/us-per-capita- availability-of-red-meat-poultry-and-fish-lowest-since-1983 INCREASING DEMAND • Waiting (hoping? wishing?) for the next pandemic is not a sound strategy to improve prices. • Convey the right message about shrimp as a wholesome, nutritious food. • Continue educating the public that shrimp farming is a responsible industry. • Do not alter the products – make better products. • Most shrimp consumed in restaurants – must reach more households – education, convenience. • Penetrate fast-food segment. • Competition is poultry, beef, pork + coming technologies/cellular aquaculture. • Unified Marketing Strategy - Shrimp Marketing Council under development (GAA). • Need spokesperson…”Got Milk?... • Convince Millenials/younger generations to eat more shrimp - more environmentally and health conscious. Growing consumer interest for traceable seafood 1. “Consumer push for traceable seafood is growing…diners and foodservice operators equally interested in sustainability…across all age groups but Millennials and younger age groups are more visible or they are asking for it.” US Foods, the U.S.’s second largest foodservice distributor (www.intrafish.com/marketplace/us-foods- consumer-push-for-traceable-seafood-is-growing/2-1-676646).

2.“The certifications a consumer in the United States is most likely to encounter are the Global Aquaculture Alliance (GAA), which has developed standards called the Best Aquaculture Practices (BAP). There is also the Aquaculture Stewardship Council (ASC), more established and widespread in Europe.” “If you see any of these abbreviations listed on the label of your frozen shrimp or at your fish market, you can go ahead and buy with confidence. (Look for at least a two-star BAP rating, out of four stars.).” (October 15, 2019, The New York Times). The Avocado Model (USDA Marketing Board) Accurate weekly production data Increased per cap consumption

37 https://www.aquaculturealliance.org/advocate/how-we-can-help-children-reach-for- https://www.aquaculturealliance.org/advocate/farmed-seafood-makes-sense/ seafood/

SUMMARY

• Shrimp is the most popular seafood item in the U.S. (over 27% of total). • The U.S. depends on imports for over 90% of its shrimp supply annually. • A major shrimp market - 695,723 MT imported in 2018 - with significant consumption expansion potential. • Organic shrimp: report of a potential 45,000 MT niche market (segment growing at 7%/yr). • Potential for indoor RAS systems everywhere in the U.S. – local sourcing is of much interest to retail buyers - salmon projects leading the way. • Promote sustainability, responsibility, certification and traceability. • Promote consumption and increase demand. THANK YOU FOR LISTENING Darryl Jory