A simple question was asked: "What is the break-even point of a dragger?" The answer painted a bleak picture, and raised an even more troubling question: "Is there a break-even point for a dragger?"
Carlos Rafael, owner of 36 fishing vessels, presented the grim reality from two representative vessels in his fleet.
The first vessel gross yield was $522,000 last year, but after paying the mortgage, insurance, fuel, ice, payroll, accounting fees, suppliers and other expenses — including the cost of leasing 62 days-at-sea (DAS) the boat was not profitable. Even with approximately $23,000 in government aid, the boat’s net loss was $22,000. WIthout government aid the loss would have been over $46,000.
The second vessel also lost approximately $22,000 before government aid. WIth $19,000 from the state, the net loss was minor, but next year it may well be a major loss.
We face an 18% cut in days-at-sea and we must think about how this will affect the leasing pool.
Many boat owners, like Carlos, lease DAS to combat the severe reductions in their own DAS allocation. WIth an 18% reduction in the DAS he owns himselft, combined with an 18% reduction in the pool of DAS from which he leases, Carlos, like many others, will be forced to decide if they should stay or leave the industry.
THE BOTTOM LINE: With decreased DAS prices will rise. This will make it harder for those who remain to make a profit, or for that matter, to break even. Without further government assistance, and with the implementation of Amendment 16 interim measures, the future for many industry members is uncertain.