The US shrimp harvesting industry is experiencing a long-term decline in profits and economic stability, including a $268 million revenue loss since 2021, according to an NOAA Fisheries snapshot report outlining the economics of the US Gulf of Mexico shrimp industry.
The report breaks down prices of imported versus US-caught Gulf shrimp, as well as landings, industry costs, profits, and participation in the fishery. It showed a decline in profits and economic stability of the fishery. This shows a multi-decadal decline in the Gulf shrimp harvesting industry’s economic stability and profitability. Imported farmed shrimp have driven shrimp prices lower while operating costs have increased.
From 2021 to 2023, total Gulf shrimp revenue dropped by more than half, from $489 million to just $221 million. The problem isn’t a lack of demand – as US shrimp consumption more than quadrupled between 1984 and 2023. This increased demand has been met primarily by imported shrimp. Originally, wild-caught foreign shrimp, this has since become overwhelmingly farm-raised shrimp. By 2023, the proportion of Gulf-harvested shrimp made up only 4.5% of the US market – down from 28.7% in 1984.
As a result of increasing volumes of imported shrimp at lower and lower prices, the average price of Gulf shrimp decreased,down from more than $6/pound in the 1980s to less than $2 in 2023.
‘For decades, this fishery has been fishing down its capital stock – leading to slow attrition in good times. Bad times rapidly turn into crises,’ said Dr. Christopher Liese, industry economist and lead author on the report.
‘The long life of shrimp vessels has masked a fundamental weakness. The fishery is not economically sustainable enough to reinvest in itself. This is an industry consuming its own capital to stay afloat, delaying a crisis rather than ensuring a future.’
US wild-caught landings in 2023 were 15% below the average of the previous ten years and 24% below the average of the previous 50 years. Shrimp populations have remained stable and are not undergoing overfishing – so declining profits are driving US shrimpers out of the fishery.
‘We know from our regular assessments that shrimp abundance is not the issue here,’ stated Dr. John Walter, Deputy Director of the Southeast Fisheries Science Center.
‘We also know that because of declining profits, fewer vessels are shrimping, active vessels are shrimping less, and fewer crew are employed by the industry. This is driving the observed drop in landings, and exacerbating revenue declines.’
There has been a 19% decline in active shrimping vessels from 2021 to 2023, and an estimated loss of more than 1200 jobs.
Given declining revenues and an estimated average annual profit margin of only 0.5% over the past 18 years, this fishery has not been economically sustainable for at least 20 years. Hence the fishery has seen minimal capital investment, and the average age of shrimp vessels has dramatically increased over the last 20 years.
While this downward trend is a long-term issue, the industry’s difficulties in recent years were intensified by disruptions related to COVID and inflation.
‘The struggles the industry is facing are immediately apparent when walking the docks in any of the major shrimping communities,’ explained Dr. Carissa Gervasi, lead of the Shrimp Futures Initiative.
‘Docks are in disrepair while giant vessels with peeling paint sit idly.’
For many shrimpers, prices are so low that it’s cheaper to leave the boats docked than go out shrimping. But leaving boats docked exacerbates the issue. Crews move on to more stable, shore-based jobs. Vessels that sit idle for years often require substantial maintenance and repairs to become operable again.
‘But many shrimpers are stuck. One fleet owner estimated that it would cost him $4 million to sell his 14 vessels and exit the industry. Shrimpers can’t afford to shrimp, and they can’t afford to stop shrimping,‘ Carissa Gervasi said.
Assessing the economic status of the Gulf shrimp industry is a first step in addressing the barriers to restoring its competitiveness.
‘This report puts numbers to the economic challenges facing the US shrimp industry. Achieving a truly resilient Gulf shrimp industry hinges on its ability to sustain profitability,’ said NOAA Fisheries’ seafood advisor Sarah Shoffler.
‘The path forward will likely involve a strategic combination of technological investment, market differentiation, and robust public-private partnerships. We are committed to exploring solutions that could support this industry into the future.’
