The domestic shrimp industry is expected to lose more money in 2011 than in 2010, with Gulf of Mexico shrimp fetching lower prices than imports because of consumers’ safety fears, according to a news release from the American Shrimp Processors Association.
Prices have been driven down by shrinking demand and domestic distributors paying less in order to regain market share and customers lost in the aftermath of the spill, according to the association. A shortage of larger sizes, those in the 16-20 per pound range, and the lower prices have sliced profit margins for the entire domestic industry.
The pricing structure for the 2011 season is unprecedented, according to the association. At certain sizes imports are actually more expensive than domestic product.
Before 2010, domestic shrimp were regarded as a premium product and normally commanded a higher price.
Tom Guinan Jr., executive vice president of Pestcoe, Schwed & Associates and an industry consultant, said the 2011 shrimp market is completely backward.
Domestic processors are being forced to sell their product in a downward spiraling market without sufficient capital to maintain operations in this extremely low-margin market, he said in a news release.