Economic Impact

The bait fishery is an important but often overlooked component of the menhaden industry.  It is frequently lost in the shadow of the reduction fishery.  But the east coast bait fishery is critical to both commercial and recreational fishing from Maine to South Carolina and as far south as the Gulf of Mexico. In the waters of almost all of the Atlantic coastal states, the fish is harvested and used as bait in crab pots, lobster pots, and hook and line fisheries.

WASHINGTON (Saving Seafood) February 27, 2012 – Most Americans have probably never heard of Atlantic menhaden, a small, oily fish not prized for its taste.  However, the public is likely aware of the nutritive benefits that menhaden provides as a source for Omega 3 fish oils. The fish is also converted into fish meal and hundreds of other common products from margarine to pet food to salad dressing.  And, although no restaurant will likely feature menhaden on its menu anytime soon, the fish does represent an important means for catching an array of preferred seafood species, not to mention a wide variety of sport fish.

Indeed, the bait fishery is an important but often overlooked component of the menhaden industry, frequently lost in the shadow of the reduction fishery.  But the east coast bait fishery is critical to both commercial and recreational fishing from Maine to South Carolina and as far south as the Gulf of Mexico. In the waters of almost all of the Atlantic coastal states, the fish is harvested and used as bait in crab pots, lobster pots, and hook and line fisheries. Without much fluctuation in menhaden reduction landings, by which the fish is processed for commercial applications, bait landings have become more relevant in the overall fishery. According to a report prepared by NOAA and the New Jersey Division of Game and Fish, the bait fishery averaged 11 percent of total menhaden landings from 1985-2000. Now, the bait fishery makes up around 20 percent of total menhaden catch. The report also states that from 2000 to 2009, the annual bait fishery harvest averaged around 77 million pounds.

And as bait itself, the significance of menhaden seems to be growing with recent harvest restrictions on other bait fish species. For instance, partly due to a decrease in the herring catch, a major source of lobster bait, menhaden has become an increasingly popular choice for Maine lobstermen. An article that appeared in Maine’s Fisherman’s Voice recently stated that menhaden represented only six percent of lobster bait in 2006. By 2008, that percentage more than tripled to 19 percent, and now may be as high as 32 percent.

 “The menhaden fishery is a huge part of keeping us fishing,” says Patrice McCarron, executive director of the Maine Lobstermen’s Association. And that’s no small thing as McCarron explains that the lobster fishery is easily the state’s largest, generating a direct value of between $300-325 million and indirect economic impacts in the $1 billion neighborhood. “With the reduction of herring, menhaden has taken up the difference,” she says.

Certainly, Jennie Bichrest, owner of Purse Line Baits in Sebasco Estates, Maine, can attest to the growing importance of menhaden as bait. “Pogies (menhaden) have always been my mainstay, but now everyone’s buying them,” she says. “Looking back at my books, my company handled 4,842,000 pounds of menhaden in 2007. Last year, that number went up to 9,500,000 pounds.”  This increase represents double the amount of menhaden over a four-year period.
   
But Maine hardly holds a monopoly on the menhaden bait fishery. Moving south, New Jersey currently ranks at the top among states in the Mid-Atlantic for menhaden bait landings. This fact hardly surprises Jeff Reichle, president of Lund’s Fisheries in Cape May. Established in 1954, Reichle’s business produces various species of fish for consumers and for commercial and recreational fishing. Of its menhaden sales, Reichle reports that the majority of sales are for bait, as opposed to reduction, with the highest volume sold for the lobster and blue crab industries and significant sales going to the recreational fishery for a variety of species, such as snapper, grouper, and shark. And while not the only part of his business, menhaden has played an increasingly important role.

“We’re not just a bait or menhaden business, but it’s an important part of our business,” says Reichle. “We can’t walk on one leg. Because of quota cuts and catch restrictions on other fish, “if we don’t have menhaden, we can’t survive on the other species alone.”

That refrain is echoed a few states south of New Jersey as well. “We wouldn’t survive without the bait industry,” declares Stanley O’Bier, president of Pride of Virginia Seafood in the state’s Northern Neck region. Established as a small crabbing operation with a single freezer in 1965, the business has grown to include four plants with a freezer capacity of 40,000 square feet and its own trucking company. For the last three decades, Pride of Virginia Seafood has been a premier dealer of baitfish — including menhaden, herring, and mudshad — for private and commercial fishermen along the eastern seaboard and the Gulf of Mexico. “Look at the money from the crab fishery,” which he says has had one of its most successful years in Virginia. “If you don’t have the bait to put in those pots, you can’t make that.”

Certainly these kinds of dynamics are helping keep Jimmy Kellum of Virginia-based Kellum Maritime LLC in business as well. Kellum runs two menhaden fishing companies and caught 24 million pounds of the fish last year alone. He sells half to the reduction industry and half as bait to Pride of Virginia Seafood. Of his bait sales, Kellum estimates that 90 percent goes to commercial fishing, mostly for bait for crabs, lobsters and crawfish; in fact, Louisiana crawfish operations rank among his most significant clientele. “The bait fishery has expanded in the past few years because other states have closed their fisheries,” he says.

Just south of Virginia, the menhaden bait fishery is also crucial to North Carolina’s enormous blue crab industry, the state’s largest fishery by value and volume. According to the North Carolina Department of Marine Fisheries, over 30 million pounds of blue crab were caught in the state in 2010, 42 percent of all landings, at a value of over $26 million. The state agency also estimates that the blue crab fishery used 11 million pounds of menhaden bait in 2010.

Even though relatively little menhaden is caught in North Carolina and most is imported from other states, Sean McKeon, president of the North Carolina Commercial Fisheries Association, considers menhaden  “one of the most important” fisheries for his constituents. “I can’t think of any fishery that would affect the state of North Carolina more based on the number of people who use it for bait in the crab fishery,” he says.

Billy Carl Tillet agrees. As chairman of the North Carolina Fisheries Association and owner of Moon Tillet Fishing Company, one of the largest privately owned fishing and seafood trading companies in the Outer Banks, Tillet notes a growing demand among crabbers for menhaden bait. “For catching crabs, [menhaden] is the best year-round bait they have,” he says. “It’s what the crabs like best, and it holds up in the pots.”

And, because more people are turning to menhaden for bait, McKeon adds that the menhaden bait fishery “is poised to grow if they don’t regulate it out of business.”

There are countless other examples that demonstrate the growing importance of the menhaden bait fishery, whether for sport or for the significant fishing industries on which so many livelihoods depend. Bait dealers, commercial fisherman, and recreational anglers along the East Coast and the Gulf of Mexico are increasingly relying on the little fish whose name remains unfamiliar to a majority of Americans. But even if the name never quite registers in the popular lexicon, its role as a bait fish is sure to touch an ever expanding number of end consumers.

 

Just as scientists note the complex interdependence of species in the natural world, economists note a similar kind of interdependence at work with industries, communities, and livelihoods. With so much already on the line during these trying times, menhaden policies based on disputed, inconclusive ecological theories could yield devastating impacts on this economic web of life.

WASHINGTON (Saving Seafood) 25 January 2012 — With an economy struggling to regain equilibrium, governments at all levels have adopted policies aimed at triggering a resurgence in job growth and economic stimulus. Unfortunately, the prospect of some new policies may create more challenging conditions for one important industry based on a small and prolific fish – the Atlantic menhaden.

Most Americans know little about menhaden, an oily fish more likely to be found in their medicine cabinets than on their dinner plates. Prized as one of the main sources for fish oil and fish meal, menhaden are also found in hundreds of household items, from margarine to pet food to salad dressing. The fish also make great bait for crabbers and lobstermen. All told, the resource supports thousands of jobs – directly and indirectly – and generates hundreds of millions of dollars annually, in effect, representing a significant path towards improving the country’s dour economic circumstances.

But this path may become fraught with obstruction, which largely stems from disagreement about the sustainability of the fish and mounting pressure on the regulatory authority that oversees its management. Lauded as a victory for environmental and recreational angling groups who have long dismayed of commercial menhaden fishing, the Atlantic States Marine Fisheries Commission (ASMFC), a deliberative body of representatives from all 15 Atlantic coast states, recently voted to set new “safe harvest” limits on menhaden. Before they are implemented, the ASMFC Menhaden Board – a committee comprised of state fisheries professionals and political appointees – will need to determine the regulations that will achieve these newly approved goals.  The question is: will they implement policies that cause economic harm to the industry and, consequently, the myriad jobs and communities that rely on it?

Before that question can be answered, it is important to note that some scientists already dispute the very foundations on which arguments for stricter menhaden fishing policies stand, most notably the theory that there is an immediate correlation between commercial harvest and the sustainability of the species.  Unlike other marine resources, the health of Atlantic menhaden as a species has little to do with the amount or intensity of commercial fishing.  Conventional wisdom dictates that the larger a population, the better chance it stands to produce future generations – and that certainly applies to many species.  However, menhaden boast an evolutionary edge that enables females to produce enormous numbers of eggs – upward of 360,000 per fish. And the success of those eggs, many scientists say, is far more dependent on environmental conditions, such as weather, water quality and atmospheric pressure, than on anything else, including restrictions on commercial fishing.

“Intuitively, it makes sense that less fishing means more menhaden,” says National Marine Fisheries Services biologist Joseph Smith. “But it doesn’t work that way. Based on years of data, there doesn’t seem to be a very good relationship between the number of spawners and the number of juveniles.”

Nonetheless, the contention of a strong correlation between spawners and juveniles – among other misconceptions – could help establish restrictions that prove extremely costly.

For instance, the Atlantic menhaden reduction fishery, considered the lifeblood of Virginia’s Northern Neck region, contributes $80 million in annual economic output to the rural and largely impoverished region. In Reedville, Omega Protein operates a facility that converts the small and abundant fish into fish oil and fish meal. The plant employs more than 300 people, including Betty Smith Gaskins. Born and raised in the area, she has worked as an inventory specialist and administrative assistant at the plant for nearly four decades. But the prospect of new policies that could hinder, if not altogether halt, plant operations has her and her coworkers worried.

“We have enough problems keeping our children in the area now,” she says. “A lot of businesses would have to close and this would become a retirement community.”

Indeed, if the reduction fishery were to close in Virginia’s Northern Neck, Smith Gaskins’ worst fears would likely be realized. A recent study by the Virginia Institute of Marine Science on the economic and social importance of menhaden on the Chesapeake Bay used a financial simulator model to examine the impacts of different harvest quota scenarios. “In the event of a closure [of the Omega Protein plant in Reedville],” the report states, “the loss of the reduction industry alone would generate a 14.3 percent and 8.1 percent decline in total county output and employment; respectively.”

And with drastic harvest restrictions, these kinds of economic consequences could extend far and wide, considering the menhaden fishery and its stakeholders inhabit a broad swath of the mid-Atlantic and northeastern coast of the United States, largely mirroring the fish’s natural distribution from the Gulf of Maine to the east coast of Florida. Throughout much of this range, local economies and thousands of jobs are both directly and indirectly on the line.   

“It’s a trickle-down effect, and it’s unwarranted to start with,” laments Stanley O’Bier, president of Pride of Virginia Seafood. Established in 1965 as a small crabbing operation in Callao, Virginia, O’Bier’s business currently generates $6 million in annual revenues, much of which stems from menhaden bait sales. “If they’re going to cut [the menhaden harvest] 40-45 percent, I can’t stay in business unless I raise prices,” he says. But “the crabbers wouldn’t be able to stand the price increase.” He contends that this would ultimately hurt the already-thin margins of many crab fishermen up and down the coast, potentially forcing many out of business.

Jeff Kaelin, of Lund’s Fisheries in Cape May, New Jersey, says the company has a significant amount of money invested in the fishery. His company’s menhaden bait catch allows them to realize their capacity. “It helps us get a return on our investment.” But if harvest restrictions are implemented, he says “We probably won’t be making the kinds of investments that we otherwise would.”

John Manzione, of the New York Fishing and Tackle Trade Association, says it is important for dealers to have a sufficient amount of bait to meet diverse market demands, and that menhaden is “a well-known, well-utilized fish. Usually the South Shore [of Long Island] bait dealers will sell to crabbers, and North Shore dealers sell to anglers catching bluefish and other fish.”

Certainly, the role of menhaden as bait has become increasingly important. According to a report prepared by NOAA and the New Jersey Division of Game and Fish, the bait fishery averaged 11 percent of total menhaden landings from 1985-2000. Now, the bait fishery makes up around 20 percent of total menhaden catch. Concurrently, many profitable fisheries – the crab industries in the Chesapeake Bay and off the Carolinas and the enormous lobster industry in Maine, to name a few – have become increasingly dependent on menhaden.  In fact, partly due to a recent decrease in the herring catch, another major source of lobster bait, menhaden has become an increasingly popular choice for Maine lobstermen. An article that appeared in Maine’s Fisherman’s Voice recently stated that menhaden represented only six percent of lobster bait in 2006. By 2008, that percentage more than tripled to 19 percent, and now may be as high as 32 percent.

Jennie Bichrest is the owner of Purse Line Baits in Sebasco Estates, Maine. “Looking back at my books,” she explains, “my company handled 4,842,000 pounds of menhaden in 2007. Last year, that number went up to 9,500,000 pounds.” This increase represents double the amount of menhaden over a four-year period.

As one of the original three large bait dealers in the state, Bichrest worries that tighter restrictions on menhaden harvests could create an increasingly inhospitable business environment. “Pogies (menhaden) have always been my mainstay, but now everyone’s buying them and I don’t know how increasing limits will fare for business.”

She also worries how smaller businesses and others in the region will be affected. “A lot of little skiff guys fish for them for bait too,” she says. “And don’t forget the trucking operations that are employed to haul the fish.”

Last summer, Bichrest was one of 42 industry stakeholders, from Maine to North Carolina, who signed a letter urging the ASMFC to carefully consider all of the complexities regarding the menhaden fishery before making significant policy decisions. Now that the ASMFC has set “safe harvest” goals, the regulations that are determined to achieve them could set into motion a far-reaching ripple effect of disastrous economic consequences for Atlantic fishing communities.

 

edited by Tazewell Jones

 

 

 

It’s the Lenten season, and for many that means no meat on Fridays as an act of penitence. The religious tradition observed from Ash Wednesday to Easter dates back centuries. It’s also good for the seafood business, which happens to be a huge part of the southern New Jersey economy. The problem is: Fewer Catholics are observing the old traditions.

“It’s not like it was in the past. Ash Wednesday years ago was one of the biggest days of the year. As the population gets older and people die off, the new generation isn’t following the rules like they did,” said Al D’Amato, the day manager at the seafood market.

D’Amato recalls customers even shunning some of the chowders because they have bacon in them. He rarely gets those kinds of questions anymore. The decline of Lent seafood sales also has been noted at Viking Village in Barnegat Light.

Read the complete story from The Press of Atlantic City.

 

 

 

 

 

 

NEW BEDFORD – March 14, 2012 — Seafood buyers from China outnumbered those from every other nation in the eighth annual buyers' tour of the New Bedford scallop industry Tuesday.

More than half of the 35 buyers who arrived by bus from the Boston Seafood Expo were Chinese representatives, eager to supply a growing middle class in that booming economy with fish and shellfish they could not afford in the past, according to Colleen Coyne, of Food Export USA New England, who came along for the day-long tour.

Also attending was Flora Zhang, one of two U.S. trade representatives working in China on exporting scallops and other species to the growing China market. She said her office has been open just three years and the prospects are growing fast.

Right behind the Chinese were the Russians, who had at least four representatives.

Read the complete story from The Standard-Times.

 

 

 

 

 

 

HOUSTON, March 8, 2012 — /PRNewswire/ — Omega Protein Corporation (NYSE: OME), a nutritional ingredient company and the nation's leading vertically integrated producer of omega-3 fish oil and specialty fish meal products, today reported financial results for the fourth quarter and full year ended December 31, 2011.

Fourth Quarter and Full Year 2011 Highlights:

Revenues:  $62.8 million for the quarter, a 46% increase over the 2010 fourth quarter, and $235.2 million for the year, a 40% increase over 2010
Gross profit margin:  17.2% for the quarter and 23.2% for the year
Net income: $0.6 million ($0.03 per diluted share) for the quarter and $34.2 million ($1.71 per diluted share) for the year
Production:  The Company experienced its highest overall production since 2003 and highest fish catch since 2002
Fourth Quarter 2011 Results

Omega Protein fourth quarter of 2011 revenues increased 46% to $62.8 million from $43.1 million in the same period last year.  The composition of revenue by nutritional product line was 76% fish meal, 15% fish oil, 5% specialty nutraceutical ingredients, and 4% fish solubles and other.  Fish meal sales prices decreased 27% compared to the fourth quarter of 2010.  Fish oil sales prices increased 28% compared to the fourth quarter of 2010. 

Read the full story here.

 

GLOUCESTER, Mass. – 7 March 2012 – These days, Gloucester supermarkets rarely, if ever, sell fresh caught cod.

The price of fresh caught cod has doubled at the wholesale level, putting it out of bounds for many retailers.

The city's landmark Gloucester House has no cod on its menu.

Fine seafood restaurants in Boston are using pollack instead of cod for fish and chips.

Others now get their supply of the 200-year-old Commonwealth of Massachusetts' iconic state fish from Norway.

Such is the state of the cod in the state of the cod.

Read the story in the Gloucester Times

A well-known Gulf of Maine herring fisherman said Tuesday he lost about everything when his fishing vessel sank some eight miles off the Maine coast.

Danny Fill, 48, was captain and minority owner of the Plan B, an 81-foot shrimp and herring seiner that sank en route to Gloucester from Portland last week.

Fill, 48, said he owned 49 percent of the Plan B, with the majority owned by interests associated with the Gloucester-based Western Fishing Co.

Read the complete story from The Gloucester Times.

 

 

 

 

 

 

 

In the mid-nineteenth century, New Bedford, Mass., was the center of the whaling universe and the richest city per capita in the United States — if not in the world, according to one 1854 American newspaper. The US whaling industry grew by a factor of fourteen between 1816 and 1850. Still New Bedford swallowed half of America's whaling output by mid-century. Demand for New Bedford's haul came from all over the country. Sperm oil could lubricate fancy new machinery. Inferior whale oil could light up a room. Baleen, or whale cartilage, could hold together a corset.

The life and death of American whaling might seem like a precious nostalgia trip, but it's really a modern story about innovation. It's about how technology replaces workers and enriches workers, how rising wages benefit us and challenge companies, and how opportunity costs influence investors and change economies. The essay can stand on its own, without my muddying the waters with political points about how Washington or CEOs should learn from yesterday's Ahabs. Suffice it to say that whaling became the fifth largest industry in the United States in the 1850s, and within decades, it had disappeared.

Read the complete story from The Atlantic.

 

 

 

 

 

 

CNN – The federal government is contemplating what for generations seemed inconceivable — restricting or shutting down most of the cod fishing in the Gulf of Maine, a region that extends from Cape Cod up through Nova Scotia.

A recent government survey found that Gulf of Maine cod, considered a top earner for fishermen in the region, are in far lower numbers than what experts had thought.

Just three years earlier, the government had projected the area was well on its way to recovery after decades of overfishing. Since then, federal regulators have raised cod catch rates to nearly five times the sustainable level based on what are now reported as overly optimistic and incomplete estimates.

The new data now suggests the stocks are so depleted that even if the fishing industry were to shut down, codfish would still not recover by 2014 to the levels mandated by federal law.

Read the complete story and see the video from CNN.

 

 

 

 

 

 

ELLSWORTH, Maine — Maine fishermen landed 276.6 million pounds of seafood and bait worth more than $425 million in 2011 thanks, in part, to a record lobster haul, state fisheries officials announced Thursday.

According to preliminary figures, last year’s total catch was 21 million pounds larger than in 2010 and represented the biggest haul since at least 2006. But despite the increase in total pounds, the estimated value of Maine’s 2011 catch declined by roughly $30 million due to a smaller harvest of pen-raised Atlantic salmon, the Department of Marine Resources said.

Once again, the lobster fishery continued to dominate Maine’s commercial fishing industry, especially in terms of the monetary value of the catch. For the first time in history, the lobster catch broke the 100 million-pound mark in 2011, with the 103.9 million pounds representing nearly 38 percent of the total landings in Maine last year.

Read the complete story from The Bangor Daily News.