Arkansas catfish farms gasping

Receipts fall 35%; feed is costly; ponds being ditched

— Arkansas’ catfish farmers saw income from fish sales plummet in 2012 as a steady drop in prices took its toll.

Sales of food-size fish generated $17.4 million in revenue last year - down 35 percent from the $26.8 million earned in 2011, according to a Jan. 28 report by the U.S. Department of Agriculture’s National Agricultural Statistics Service.

“It’s really rough right now in the catfish business,” Ted McNulty, director of the Aquaculture Division of the Arkansas Department of Agriculture, said Tuesday.

McNulty said high feed costs combined with low market prices at least partially resulting from foreign fish imports are pushing farmers to convert fields covered by ponds to other, more profitable crops such as corn and soybeans.

“Farmers like a year ago were getting $1.25 per pound. Today, they’re getting 85 cents per pound,” McNulty said.

With feed prices running between $400 and $500 per ton - constituting the biggest annual cost of raising catfish - a farmer’s break-even cost is around $1.10 per pound, he said.

Given the importation of low-cost fish from countries such as Vietnam, growers in Arkansas and other states can’t raise their prices to offset higher production costs, since consumers tend to buy the cheapest product available, McNulty said.

For 2013, ponds covering 8,200 acres in Arkansas will be used for catfish production, according to the statistics service - a 15 percent drop from the 9,700 pond acres used in 2012.

Statistics on catfish production in Arkansas were added to the 1987 Census of Agriculture.

In 1988, the statistics service recorded the highest amount of acreage devoted to catfish in the state - 38,000 acres of ponds. The 8,200 acres in 2013 were the fewest in the past 25 years.

Nationally, the amount of catfish processed in 2012 dropped 10.2 percent compared with 2011. The statistics service reported that 300.2 million pounds were processed last year, compared with 334.1 million pounds in 2011. At the same time, the average monthly price per pound dropped from $1.25 in December 2011 to 83 cents per pound a year later.

The inventory of food-size fish in Arkansas ponds shrank less than 1 percent, from 13.1 million on Jan. 1, 2012, to 13 million on Jan. 1, 2013. Nationally, food-size fish numbers were down 8 percent. Food-size fish range from three-quarters of a pound to more than 3 pounds.

However, the statistics service report noted that the numbers of small food-size fish and stocker fish in Arkansas are down, 16 percent and 13 percent, respectively.

Gene Martin of the Arkansas Farm Bureau said that with the industry’s shrinkage, it only makes sense that fewer fish arein the pipeline. Martin serves as coordinator for the Arkansas Catfish Promotion Board.

“You’ve melted away 24,000, 25,000 acres of catfish ponds, and there’s not much more melting that you can do there,” Martin said. “That just shows the state of the industry at this point. There’s just fewer people out there so therefore there’s going to fewer numbers of those categories of fish.”

Like any segment of agriculture, catfish farming has its ups and downs, Martin said.

Martin said the problems for the industry began a few years ago when grain prices started rising, which in turn carried feed prices higher.

“There just hasn’t been much of a break for the catfish guys in that 5- or 6-year span,” Martin said.

While farmers can’t stay in business very long if they don’t cover their production costs, Martin said, they do have some flexibility by focusing on short term costs such as feed and electricity.

For a “couple of years a guy can say: I’ve got the work I’ve done on the ponds, I’ve got the pumps, I’ve got the aerators, all of that fixed expense,” he said. “So, as long as I’m covering my short-term expenses and putting a little back on those fixed, long-term things, then I can stay in business.”

At some point, farmers have to cover fixed costs: long-term maintenance of ponds, pumps, aerators.

“On a 1- or 2-year basis perhaps, you don’t count that against what your cost of production is, but at some point it has to be,” Martin said.

The future of catfish farming will be the topic of a panel discussion Friday at the annual meeting of the Catfish Farmers of America being held at the Peabody Little Rock hotel on Thursday, Friday and Saturday.

McNulty, who’ll moderate the discussion, said he’ll be interested in hearing what producers from other states have to say about the prospects for catfish farmers.

Both he and Martin said many of the ponds that have been drained and, in some cases, leveled for other crops won’t likely be used again to raise catfish, given strong prices for corn and soybeans and the ongoing struggle to make a profit with catfish.

“The ones that have knocked the levies down and gone to raising corn and soybeans I doubt they’ll be back,” McNulty said. “It’s just so costly to move that dirt that much and rebuild.”

Business, Pages 29 on 02/13/2013

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