SEAFOODNEWS.COM by John Sackton May 12, 2014 — Our Story Friday (Shrimp correction well underway – huge harvests in Ecuador, slowdown from China push prices down) about the shrimp price correction got a lot of attention.
One aspect of this is that high shrimp prices have been like an umbrella, allowing prices increases on other seafood items to be more easily absorbed. This situation is now reversing. Like a tide going out, it will be harder for other items, such as salmon or crab, to maintain margins as costs increase. Even if you are not selling shrimp, the sea change in shrimp commodity prices will impact the entire seafood industry.
Other major seafood items like salmon, cod, crab and tilapia do not react directly to shrimp prices – they all have their own internal supply and demand dynamics that push prices up or down. But with high costs for things like salmon, crab and tilapia, for example, the retreat of shrimp prices makes it much more difficult for sellers to maintain margins in other species. This is the factor we see playing out in some parts of the US seafood industry over the next eight months.
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This story originally appeared on Seafood.com, a subscription site. It is reprinted with permission.