The global shrimp market is estimated to be greater than $8.0 billion. During the past twenty years there has been a tremendous increase in the worldwide supply of shrimp with 80% of it coming from farms. Ninety-nine percent of the farm raised shrimp comes from developing countries. The top seven producers in 2000 were Thailand, China, Indonesia, Vietnam, Ecuador, Philippines and Bangladesh. Many of these farms still utilize chloramphenicol and endosulfan, although some countries have banned these substances. Chloramphenicol is an antibody used to kill bacteria that may grow in shrimp ponds. If consumed by humans, it can cause aplastic anemia, a condition where bone marrow stops producing red and white blood cells, which is often irreversible and fatal. Endosulfan is a pesticide used to kill mollusks in shrimp ponds. Human ingestion can affect the neurological system, eyes and respiratory system, as well as disrupt the endocrine system. Europe has a zero tolerance policy for such substances and shrimp shipments containing banned substances have been redirected to the U.S. and other countries.

Shrimp farming has increased the volume of shrimp and resulted in dumping in the U.S., causing a price reduction. Historically, shrimp was caught in the high season when the supply was high and prices were low, and held until the off season when the supply was low and prices high to maximize return. However, farm-raised imports are available year-round, eliminating the high and low periods in the supply. The average frozen inventory had been three months and now it is two and a half weeks. The overall impact to the global industry has been significant. From 1980 to 2001, the value of the world shrimp trade has increased by 70% but the volume in weight has increased by 240%. After the effects of inflation, the average price per pound of shrimp imports has declined from $5.82 in 1980 to $2.87 in 2001. This does not include the record import years of 2002 & 2003 (Source NMFS).

Although there have been anti-dumping restrictions put in place by the U.S. Government as a result of the anti-dumping suit filed by the Southern Shrimp Alliance, there has been minimal impact seen in the U.S. market at this point. The suit was filed with the U.S. Department of Commerce and the International Trade Commission against farm-raised shrimp from China, Thailand, Vietnam, India, Brazil and Ecuador. The suit claims that those six countries dumped shrimp on the U.S. market at below cost prices, triggering a plunge in the value of U.S. harvested shrimp from $1.25 billion in 2000 to $559 million in 2002.

The Domestic Shrimp Industry

The U.S. domestic shrimp production has declined from 332.5 million pounds and $691 million in 2000 to 261.1 million pounds and $407 million in 2005. In contrast, the U.S. consumption of shrimp has tripled over the last twenty years. Less than 20% of the shrimp consumed in the U.S. is a domestic product, even though the quality is often superior and in some cases, the prices comparable.

Jerry Fisher, Editor of National Fisherman Magazine said “It is true that health conscious consumers would rather purchase wild shrimp and would pay more for them. The Alaskan salmon industry is doing that with their ‘Wild Salmon’ program and the domestic shrimp industry must position itself to compete against farm raised imports. The way to do this is to focus on the health benefits of ‘natural’ seafood rather than chemically treated farm-raised products from developing countries. There have been numerous food incidents recently and with the increase in food imports, the relative inspection percentages have been declining.”

South Carolina Shrimp Industry

Shrimp are America’s most popular and most valuable seafood. South Carolina has two important penaeid shrimp species, the brown shrimp (Penaeus aztecus) and white shrimp (Penaeus setiferus). A third species, the pink shrimp, is relatively rare but can be found at times in South Carolina waters. These shrimp are harvested by various methods from large commercial shrimp trawlers to cast nets and drop nets. Shrimp is South Carolina’s principle fishery, with an estimated average harvest of 3.5-5.0 million pounds per year (South Carolina Department of Natural Resources). There are currently 24 shrimp/seafood docks operating in South Carolina. It is the intention of SC Shrimp to purchase South Carolina shrimp and eventually expand purchasing to North Carolina and the Southeast Atlantic Coast. It is estimated that in most years, over 20 million pounds are caught on the Southeast Atlantic Coast.

The commercial fisheries for shrimp are dominated by the large shrimp trawlers which may range in length from 17 to 85 feet and account for most of the shrimp caught. The average number of licensed resident trawlers is around 600 with non-resident licensees totaling 200-400. Between 2000 and 2005 the number of Southeast Atlantic commercial trawlers has declined by 33%. Trawling is allowed only in the ocean, except for limited periods during the fall when trawlers may work in lower bay areas of Winyah (near Georgetown) and North Santee. Most shrimpers work within four miles of the beach. The commercial shrimp trawling occurs primarily from Winyah Bay to the Georgia border.

The commercial shrimp trawling fishery has three basic seasons with 80% of the catch occurring between June and October:

• May / June: Roe Shrimp; approximate heads-off landing of 500,000 pounds
• June to August: Brown Shrimp; approximate head-on 1.3 – 2.0 million pounds
• August to January: White Shrimp; approximate head-on 1.5 -2.5 million pounds

Removing the heads from the shrimp (heading) results in a weight loss of approximately 40%.

The average commercial trawl landings (heads-on) in South Carolina and the Southeast Atlantic as reported by the National Marine Fisheries Service (NMFS) between 2001 and 2005 are as follows:

The commercial shrimp landings in South Carolina accounted for a market value of $8.7 million in 2003. Inflation, high fuel prices and declining shrimp prices (due in large part to rising foreign imports) have resulted in a general decline in economic conditions for the South Carolina shrimp industry over the last ten years.

There are very few shrimp processing plants in South Carolina. One facility, Port Royal Seafood, was very small and has recently been sold to developers. Jack Whetstone of South Carolina Sea Grant indicated that most of the South Carolina harvested shrimp are shipped to Georgia and Alabama for processing. If a South Carolina processing plant existed and paid a fair price, then most, if not all, of the South Carolina catch would go there. It would also be an attractive option for some of the remaining Southeast Atlantic catch.

High-tech Shrimp Farming – Ocean’s Bounty Seafarms

Another start-up company in South Carolina, Ocean’s Bounty Seafarms, is seeking to construct a high-tech shrimp farming system developed at the Waddell Mariculture Research and Development Center, an entity under the South Carolina Department of Natural Resources. The system is composed of raceways that are enclosed from the environment, preventing the introduction of disease and other contaminants to the shrimp farming system and eliminating the need for the addition of antibodies, hormones or other chemicals. The shrimp farm is capable of producing more shrimp per acre of water than conventional open-air farms, and with proper temperature regulation, can be operated all year round. Ocean’s Bounty and SC Shrimp have been in close contact, as each company recognizes the obvious synergies between our respective operations. As their operations expand, Ocean’s Bounty will need a processor to purchase the large quantities of shrimp it plans to produce. SC Shrimp would benefit from a year-round source of shrimp and SC Shrimp can specify size categories that best meet our customers’ needs.

Ocean’s Bounty has obtained the initial funding for the project and is in the process of building the first phase. Their planned shrimp production was not included in the financial projections; however, the design capacity of SC Shrimp’s facility was increased to take into account the possibility that Ocean’s Bounty farm-raised shrimp would be available. SC Shrimp is in the process of negotiating a supply contract with Ocean’s Bounty.

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