AQUACULTURE AND CAPTURE FISHERIES. IMPACTS IN U.S. SEAFOOD MARKETS ^^^''^0.;: Report Prepared Pursuant To The National Aquaculture Improvement Act of (P.L. 99-198) ^^^^'°'^o. e. *. U.S. DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration National Marine Fisheries Service Washington, D.C. April 1988 Digitized by the Internet Archive in 2012 with funding from LYRASIS IVIembers and Sloan Foundation http://archive.org/details/aquaculturecaptuOOunit AQUACULTURE AND CAPTURE FISHERIES: IMPACTS IN U.S. SEAFOOD MARKETS '*^'^> ,1 s. oepo'->^^^^ U.S. DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration National Marine Fisheries Service Washington, D.C. April 1988 The objective of the National Aquaculture Improvement Act of 1985 was to stimulate development of a domestic aquaculture industry. Expectations were that the Act would help create new jobs, replenish depleted fisheries, and re- duce the trade deficit in fishery products. However, there were concerns marine aquaculture could affect certain tradi- tional capture fisheries in the United States. Thus, an amendment to the Na- tional Aquaculture Act of 1980 (renamed the National Aquaculture Improve- ment Act of 1985) requires the Secretary of Commerce to conduct a study on competition between aquaculture products and capture or "wild" fisheries and to recommend measures to ameliorate any such adverse effects. This study was undertaken to comply with the Congressional request. Accord- ingly, the study examines U.S. seafood markets that are supplied with prod- ucts from commercial capture fisheries and aquaculture enterprises (domestic and foreign). The report focuses on salmon and shrimp which are the most important fisheries in the United States supplied by capture fisheries and aquaculture. The world aquaculture industry is in a period of dynamic growth. Aquaculture production estimates reported by the National Marine Fisheries Service in 1985 in its study 'The Outlook for Salmon and Shrimp Aquaculture Products in World Markets" and revised in this study, have been increased by as much as 100 percent. The business opportunities for capture and aquaculture products are expected to change in the next few years as economic and environmental conditions, and government trade and financial assistance policies affect inter- national seafood markets. Therefore, the estimates and findings in this report will become outdated because of the influence of subsequent events. Chapter I describes the economics of aquaculture. This chapter shows in theo- retical terms, but in lajnnan's language, how capture fishery products and aquaculture may interact in a market. Chapters II and III, respectively, examine the size of U.S. salmon and shrimp markets and look at the sources of supply. These chapters contain the sum- mary production estimates of aquaculture operations here and abroad. Chapters IV - VII describe aquaculture operations in the United States focusing on marine species. Appendices I and II provide detailed summaries of salmon and shrimp aquaculture operations outside the United States. These sections rely heavily on reports from U.S. embassies and consulates. Appendix III re- views some of the Federal statutes controlling the siting and permitting of marine aquaculture operations in the United States. The report v/as prepared by staff of the National Marine Fisheries Service in Washington, D.C. and field offices, under the direction of Robert A. Siegel. The Summary section and Chapters I - III were prepared by Douglas W. Lipton and Robert A. Siegel of the National Economics Staff, with assistance from Sennen S. Salapare from the Office of Trade Services. Chapter TV was written by Dale Squires of the NMFS Southwest Fisheries Cen- ter. Chapter V was written by staff of the Northwest Fisheries Center and Northwest Regional Office, respectively. Staff of the Alaska Regional Office consisting of Lewis Queirolo, Aven Andersen, Jim Brooks, Tamra Faris, William Heard, Janet Smoker, and John Hamilton wrote Chapter VI and Appendix III. Kenneth L. Beal of the Northeast Regional Office prepared Chapter VII. James P. McVey of NOAA's National Sea Grant College Program wrote Chapter VIII. The NMFS Fisheries Analysis Branch, under the direction of Milan Kravanja, prepared Appendices I and II. Appendix I was written by William Folsom, with assistance from Michelle Miller. Appendix II was coauthored by Dennis Weid- ner and Paul Niemeier. 11 DEFmiTIONS Salmon aquaculture is the partial or complete cultivation of the species in hatcheries or the sea. It includes at least two different processes: pen- farming and ocean-ranching. Pen-farming is the commercial production to marketable size in total capitivity. Ocean-ranching is the private or government production of salmon in captivity to a certain stage at which it is released into the wild. Shrimp aquaculture is the production of shrimp involving control of one or more phases of their biological cycle and /or control of the environment in which they develop. Management system^s may be extensive such as large seminatural or natural marsh impoundments or rice fields (low stocking rates and little or no feeding or water exchange), semi-intensive such as large drainable ponds (medium stocking, feeding and water ex- change), and intensive such as small, totally controllable ponds (high stocking rates, water circulation/exchange, and nutritionally complete diets). Indoor raceways would exhibit the highest degree of technology with control of nutrition and environmental requirements for year-round growth. Ill CONTENTS PREFACE SUMMARY Vll CHAPTER I THE ECONOMICS OF AQUACULTURE AND 1 CAPTURE FISHERIES Introduction 1 Theory and Nature of Seafood Markets 2 Role of Imports in the U.S. Market 4 Summary 7 Technical Notes 7 CHAPTER II U.S. SALMON MARKETS: DEMAND FOR 11 WILD AND CULTURED PRODUCTS World Salmon Production 12 U.S. Salmon Landings 18 Salmon Imports 19 Are Atlantic and Pacific Salmon 22 Substitutes? Tariff/Trade Barriers Affecting 24 Salmon Products Foreign Salmon Markets for U.S. 25 Salmon Products CHAPTER III SHRIMP PRODUCTION: CAPTURE 29 FISHERIES AND AQUACULTURE World Production Trends 29 U.S. Shrimp Landings 31 Potential Aquaculture Production 32 Seasonality of U.S. Landings 32 and Imports Tariff/Trade Barriers 36 IV CHAPTER rV Marine Aquaculture in California 39 and Hawaii Introduction 39 Hawaii 39 California 40 CHAPTER V Aquaculture in the Pacific 41 Northwest Introduction 41 Salmon Sea Pianching 41 Salmon Farming 43 Technology for Salmon Farming 44 Problems and Concerns 46 CHAPTER VI Aquaculture in Alaska 51 Introduction 51 Commercial Pen-Rearing of Salmon: 51 Economic and Social Issues Ocean Ranching 54 Pen Culture Technology 54 State Regulations 55 CHAPTER VII AQUACULTURE IN THE NORTHEAST 61 Introduction 61 Current Production 61 Planned Production 61 State Regulations 62 Federal Regulations 62 Industry Concerns 62 Environmental Issues 63 Aquaculture Capital Costs < 63 CHAPTER VIII AQUACULTURE IN THE SOUTHEAST 67 Introduction 67 Current Production of Shrimp 68 Species 69 Planned Production 69 State and Federal Regulations 69 State and Federal Support 70 of Aquaculture Summary 70 APPENDIX I WORLD SALMON AQUACULTURE 73 APPENDIX II SHRIMP AQUACULTURE IN LATIN AMERICA 109 APPENDIX III SHRIMP AQUACULTURE IN ASIA, AFRICA, 179 AND EUROPE APPENDIX IV FEDERAL REGULATIONS 223 APPENDIX V FOOTNOTES AND SOURCES 225 VI SUMMARY RISING DEMAND FOR SEAFOOD Consumer demand for seafood products in the United States has grown steadily in the 1980's. Between 1980 and 1986, U.S. per capita consumption rose from 12.8 pounds (5.8 kg) to 14.7 pounds (6.7 kg), an increase of almost 15 percent. Annual growth in per capita consumption averaged 2.1 percent over this period compared to a 1 .3 growth rate between 1960 and 1980. Factors that led to the rise in consumption include increases in income, changing lifestyles, and a greater awareness of the health benefits of seafood. America's growing appetite for seafood is satisfied by domestic supplies and im- ports. As U.S. catches of its mainstay fisheries of groundfish, salmon, and shell- fish such as shrimp, lobsters, and crabs have approached or exceeded their maxi- mum biological limits, seafood imports from capture fisheries and aquaculture have satisfied the increase in fish consumption. The net result is a persistent fish- ery trade deficit that gets larger each year, growing from $ 1.8 billion in 1980 to $ 3.5 billion in 1986. If the upward trend in seafood demand continues, the United States is going to need new sources of fishery supplies in the 1990's. Based on recent projections by the U.S. Department of Agriculture, it appears that per capita seafood consumption may increase 5 percent to 1 7 percent above the 1 986 base by the year 2000.1/ This would boost per capita consumption to between 15.5 pounds (7.0 kg) and 17.2 pounds (7.8 kg). Under this scenario, supplies of edible seafood products for the total U.S. market will need to increase by 18 to 31 percent above the 1986 level. Vll Global Trends More than three decades ago, the oceans were thought to contain an enormous untapped supply of marine fishery resources. Between 1950 aind 1970, the world catch increased from 21.1 million metric tons (mt) to 66 million mt (Figure i- 1). Per capita consumption grew from 8.4 kilograms to 17.8 kilograms over the same period, as the annual growth rate in catch outpaced world population increases. Trends in World Catch Freshwater and Marine Million Metric Tons 100 Y//)^ Freshwater ttttH Marine 80- 60- 40- 20- 1 1 T 1 1 1 ; r 1950 1955 1960 1965 1970 1975 1980 1981 1982 1983 1984 1985 After 1970, however, this situation reversed itself. From 1970 to 1985, world catch increased 29.4 percent, while world population grew 33.2 percent. The Food and Agricultural Organization of the United Nations projects that global demand for fish (all aquatic species) could reach 114 million mt by the year 2000.2/ Production is estimated at 94 million mt, resulting in a shortfall of 21 million mt.