Insurance Program Development for Catfish Margin 

Protection

D15PD00514 Data gathering report 

Acquisition Services Directorate 

and 

Risk Management Agency 

Agralytica 

333 North Fairfax Street, Suite 202 

Alexandria, VA 22314 USA 

Tel: (703) 739-9090 

Fax: (703) 739-9098 
i 

Insurance Program Development for Catfish Margin 

Protection 

D15PD00514 Data gathering report

A report for

Acquisition Services Directorate 

and 

Risk Management Agency 

TABLE OF CONTENTS 

EXECUTIVE SUMMARY .............................................................................. I

1. OBJECTIVES AND METHODOLOGY ..................................................... 1

1.1. Farm Bill requirement ........................................................... 1

1.2. Objective & scope ................................................................ 1

1.2.1. Objective ................................................................ 1

1.2.2. Scope ..................................................................... 2

1.3. Methodology ....................................................................... 2

1.3.1. Project ................................................................... 2

1.3.2. Data gathering report .................................................. 3

2. LISTENING SESSIONS ..................................................................... 4

2.1. Potential interest in insurance on the part of producers and insurance 

providers ................................................................................... 4

2.2. Risks that affect producers ..................................................... 5

2.3. Identify insurance programs that meet needs and operations ............. 5

2.4. Previous industry losses / aid ................................................... 6

2.5. Why interested in insurance and willingness to pay ......................... 6

2.6. Perceptions of conflicts and difficulties of implementing an insurance 

program ..................................................................................... 7

2.7. Describe typical production activities ......................................... 8

2.8. Feed and feed conversion ....................................................... 8

2.9. Risk mitigation .................................................................... 8

2.10. Nature of sales / Use of contracts / Processing .......................... 9

2.11. Timing of sales / timing of insurance ...................................... 9

2.12. Describe other commodities typically produced, revenue relationships 

between other commodities ............................................................10
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2.13. Estimate of revenue of each operation ...................................10

2.14. What percentage of producers are full time? ............................10

2.15. Analyze, summarize, interpret data .......................................11

3. CATFISH OVERVIEW .................................................................... 12

3.1. Sources of catfish data .........................................................12

3.2. Economic context ...............................................................12

3.2.1. US production ..........................................................12

3.2.2. Domestic demand .....................................................14

3.2.3. US seafood trade ......................................................16

3.2.4. World situation ........................................................16

3.3. The production challenge – price/cost squeeze on margins ..............20

3.3.1. Catfish prices ..........................................................20

3.3.2. Feed consumption .....................................................21

3.3.3. Feed prices .............................................................21

3.3.4. Feed purchases ........................................................22

3.4. Catfish production...............................................................22

3.4.1. Domestic production and production systems .....................22

3.4.2. Management practices ................................................27

3.5. Environmental Adaptation .....................................................31

3.6. Catfish species ...................................................................32

3.6.1. Agronomic Classifications ............................................32

3.6.2. Varieties ................................................................32

3.7. Growing Requirements .........................................................32

3.7.1. Rotation and isolation requirements ...............................33

3.7.2. Natural resource requirements ......................................33

3.8. Diseases, pests, and mortality .................................................35

3.8.1. Pests .....................................................................36

3.8.2. Diseases .................................................................36

3.8.3. Mortality ................................................................37

3.8.4. Perils ....................................................................37

4. MARKETING .............................................................................. 39

5. PROGRAM AVAILABILITY ............................................................... 41

6. A REVIEW OF LIVESTOCK PROTECTION PLANS .................................... 43

6.1. Statutory language ..............................................................43

6.2. Livestock gross margin (LGM) plans ...........................................44

6.2.1. LGM-Cattle .............................................................44

6.2.2. LGM-Swine ..............................................................44

6.2.3. LGM-Dairy ...............................................................45

6.2.4. Usage of the LGM plans ...............................................45

6.3. Other related plans .............................................................45
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6.3.1. Lamb Livestock Risk Protection .....................................46

6.3.2. Dairy Margin Protection Program (MPP) ............................47

6.4. Comparison of current LGM and LRP products ..............................47

6.5. A summary of plans, needs, and data sources ..............................50

6.6. Existing catfish risk protection programs ....................................51

6.7. The cap on livestock program expenditures .................................52

7. DATA AVAILABILITY AND PRICE METHODOLOGIES ................................ 54

7.1. Search for price data at regional and national level and yield data for 

each region ................................................................................54

7.2. Catfish feed price forecasting .................................................55

7.2.1. Calculating a least cost formulation (LCF) for catfish feed .....55

7.2.2. Checking the fit of this LCF series with actual reported catfish 

prices 57

7.2.3. Adjusting the formula to yield a manufactured catfish feed 

price series .......................................................................58

7.2.4. Testing the catfish feed price formula .............................59

7.3. Identify viable data series and formulate all reasonable alternative 

methods other than contract price to develop expected prices for catfish .....61

7.3.2. Evaluating the catfish price prediction model ....................62

7.4. Formulate methods to construct Yields and/or revenue for prospective 

insureds without APH or ARH ...........................................................63

8. RISK ANALYSIS........................................................................... 64

9. EVALUATING THE FEASIBILITY OF CATFISH MARGIN INSURANCE .............. 68

9.1. Previous catfish insurance research ..........................................68

9.2. A summary of relevant FCIC-sponsored livestock insurance plans .......69

9.3. What a catfish gross margin insurance plan might look like ..............69

9.4. What would be necessary to establish a catfish margin insurance plan .70

9.4.1. Available data ..........................................................70

9.4.2. Catfish feed price forecasting .......................................71

9.4.3. Future catfish prices ..................................................71

9.4.4. Evaluating the catfish price prediction model ....................73

9.5. Other obstacles to developing LGM-Catfish .................................73

9.6. A review of alternative approaches and solutions ..........................74

9.6.1. Alternative 1 – Use an econometric model anyway ...............74

9.6.2. Alternative 2 – Use prior prices to forecast future prices .......75

9.6.3. Alternative 3 – Feed spike insurance ...............................76

9.7. Actuarial and rating issues .....................................................77

9.7.1. Current LGM rating methodology ...................................77

9.7.2. Possible LGM-Catfish rating methodology ..........................78

9.7.3. Actuarial soundness issues ...........................................78
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9.7.4. Producers’ willingness to pay........................................80

9.8. Conclusions and recommendation ............................................80

9.8.1. Conclusions regarding objectives and scope ......................80

9.8.2. Recommendation ......................................................83

10. APPENDICES AND SUPPLEMENTS LIST ............................................... 84

APPENDIX: SECTION 508 DATA ................................................................ 85

LIST OF TABLES 

Table 1: Seafood consumption by fish and shellfish type, 2005-2009-2013 ..............15

Table 2: Seafood trade, 2005-2009-2013 ......................................................16

Table 3: US catfish farms ........................................................................23

Table 4: Catfish operations ......................................................................23

Table 5: Percent of catfish operations that lost any food size fish to the following 

causes in 2009. ....................................................................................36

Table 6: LGM insurance plans – policies, loss ratio, and subsidy by plan, 2012-2014 ...45

Table 7: Lamb LRP insurance plan – policies, loss ratio, and subsidy %, 2012-2014.....46

Table 8: Summary of livestock insurance plans ..............................................50

Table 9: Information needed to develop a ratable insurance product to protect gross 

margin – sector summary ........................................................................51

Table 10: Common catfish feed ingredients & nutrient profiles ...........................56

Table 11: Commodity feed ingredient price sources ........................................57

Table 12: Insurance model comparison ........................................................61

Table 13: Key economic risks ...................................................................64

Table 14: Catfish events: frequency, severity, ability to mitigate, insurability .........65

Table 15: Insurance model comparison ........................................................72

Table 16: Objectives: Review and conclusions ...............................................81

Table 17: Scope: Review and conclusions .....................................................82

LIST OF FIGURES 

Figure 1: US catfish sales, million pounds .....................................................13

Figure 2: Catfish, US acres taken out of production .........................................14

Figure 3: US meat, poultry, and seafood consumption per capita, 2000-2013 ...........14

Figure 4: US per capita seafood consumption, 2000-2013 ..................................15

Figure 5: Worldwide fish & seafood consumption, 2000-2013..............................17

Figure 6: Channel catfish production, mt, 2004-2013 .......................................17

Figure 7: Pangasius catfish production, metric tons, 2004-2013...........................18

Figure 8: US domestic production vs. imports of all species of catfish, 2001-2014, 

metric tons .........................................................................................18

Figure 9: World channel and Pangasius catfish production, metric tons, 2004-2013 ...19
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Figure 10: US farmer price received for catfish, 2000-2013 ................................21

Figure 11: Catfish feed price per ton, 32% and 28% protein ................................22

Figure 12: LGM and LRP policies earning premium, all species ............................48

Figure 13: Loss ratios, all species, LRP & LGM ................................................49

Figure 14: Average monthly catfish price paid to farmers, $/pound, 2000-2014........54

Figure 15: Average monthly catfish feed price, $/ton, 2000-2014 ........................55

Figure 16: Estimated non-key ingredient costs as a percentage of total cost, 2000- 

2014.................................................................................................58

Figure 17: Estimated feed ration cost and actual feed prices, 2000 - 2014..............59

Figure 18: Error of the estimated feed ration vs. actual prices ............................60

Figure 19: Catfish price and feed costs, per pound of fish sold ............................69

Figure 20: Catfish producer margin, fish price minus feed costs ..........................70

Figure 21: Lagged catfish price forecast models .............................................75

Figure 22: Errors of the lagged catfish price models ........................................76

Figure 23: Catfish gross margins, 2000-2014 ..................................................79

LIST OF MAPS 

Map 1: US catfish production areas ............................................................24
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Insurance Program Development for Catfish Margin Protection 

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EXECUTIVE SUMMARY 

The 2014 Farm Bill (Agricultural Act of 2014) instructed the Federal Crop Insurance Corporation (FCIC) to 

contract with an entity to conduct research and development toward a gross margin insurance program 

for catfish producers. 

This data gathering report includes findings and analysis in response to the required statement of work for 

this project. 

The gross margin insurance concept was shared with producers and other industry participants at listening 

sessions in Stoneville, Mississippi and Greensboro, Alabama in July 2015. Their feedback was solicited and 

incorporated in this report. 

***

Livestock gross margin (LGM) programs help insure producers against loss of gross margin, i.e., when the 

difference between market prices for their products and the cost of their key inputs (generally feed) 

narrow so much as to threaten or lead to widespread producer losses. 

Other livestock gross margin plans offered by Risk Management Agency (RMA) rely on futures markets to 

determine estimated prices for products and inputs (feed) in order to calculate gross margin guarantees 

for insurance purposes. Unfortunately, there are neither futures for catfish feed nor for catfish. 

Solutions to these data challenges are reviewed in this report: 

 Future catfish feed prices could be estimated using a least cost formulation that relies on 

futures prices of key ingredients as inputs. These estimated prices are likely useful only for 

short-term time horizons (a year or less), given the fact that futures for ingredients beyond 

one year are thinly traded, if at all, and their prices are highly volatile. 

 Estimating future catfish prices, however, presents a greater challenge. An assessment of 

an econometric model used for this purpose by the Livestock Revenue Protection (LRP)-Lamb 

program, along with a review of a similar proposed model for catfish, suggest that this type 

of model would perform poorly in providing useful estimates of future catfish prices. 

We concluded that this approach would not result in an actuarially sound program. 

We further investigated three alternatives to the initial methodology: 

 Alternative 1 – Use an econometric model anyway - The first alternative is one where an 

acceptable econometric model is developed. In this case, future prices for catfish and 

futures prices for feed could be used to provide “short” (<12 month) policies to guarantee 

some percentage of the expected gross margin. 

This alternative presents multiple challenges, including an inability to match feed purchases 

(costs) with catfish sales (revenue); an inability to cover the full growout cycle of the 

catfish; and the lack of a basis for assigning target marketings (the amount farmers are 

allowed to insure). 

 Alternative 2 – Use prior prices to forecast future prices - A second alternative is using 

prior prices to predict future prices, with either a six month or full year lag. This 

alternative exhibited substantial error, indicating it would likely over-project the price and 

encourage growers to oversupply the market, inducing the precise pressure on margins the 

program is supposed to be alleviating. 
Insurance Program Development for Catfish Margin Protection 

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 Alternative 3 – Feed spike insurance - The third alternative would not fall under a gross 

margin approach. Rather than protect against loss in margin, it would simply hedge on 

producers’ behalf against sharp feed price increases. With this alternative, a synthetic 

“feed bundle” could be constructed using feed ingredient prices and allow RMA to insure the 

price of feed in the current or upcoming growing season. This would be little different, 

however, from catfish farmers hedging their feed costs themselves, or hedging by booking 

feed in advance, as many already do. 

After careful review, we conclude that there are key data challenges and actuarial concerns that cannot 

be overcome. We are also concerned that a program could distort the catfish market and be vulnerable 

to adverse selection and moral hazard. 

In order to develop an effective program that can be administered by RMA, there needs to be a clear 

methodology and data available. While a model using feed ingredient futures could generate short-term 

feed price forecasts, there is no viable source of future prices for catfish. And while alternative future 

prices could be defined, the actuarial rating, if set formulaically, may cause adverse selection in the 

program. 

The challenges of creating a program for which insureds would be willing to pay, but that would not 

distort the market supply are significant. The current LGM programs without subsidy have almost no 

participation while the LGM-Dairy program sells out quickly. We do not believe there would be significant 

participation in the program without a large subsidy (or only in scenarios advantageous to the growers). If 

the participation is low, the cost to RMA of maintaining a program would be too high in relation to the 

benefits provided. If the subsidy were too high, this may distort the supply curve. 

We recommend that RMA not try to develop a margin protection plan for catfish.
Insurance Program Development for Catfish Margin Protection 

Prepared for Acquisition Services Directorate and Risk Management Agency 

1 

1. OBJECTIVES AND METHODOLOGY 

1.1. Farm Bill requirement 

The 2014 Farm Bill instructed the Federal Crop Insurance Corporation (FCIC) to contract with an entity to 

conduct research and development toward a gross margin insurance program for catfish. Development of 

the program would take place if the Board agrees it is likely result in a viable, marketable insurance 

program that adequately protects the interests of producers. The language from the Farm Bill is as 

follows: 

SEC. 11022. RESEARCH AND DEVELOPMENT PRIORITIES. 

(a) AUTHORITY TO CONDUCT RESEARCH AND DEVELOPMENT, 

PRIORITIES.—Section 522(c) of the Federal Crop Insurance Act (7 

U.S.C. 1522(c)) is amended—

...

“(17) MARGIN COVERAGE FOR CATFISH.—

“(A) IN GENERAL.—The Corporation shall offer to enter 

into a contract with a qualified entity to conduct research 

and development regarding a policy to insure producers 

against reduction in the margin between the market value 

of catfish and selected costs incurred in the production 

of catfish. 

‘‘(B) ELIGIBILITY.—Eligibility for the policy described 

in subparagraph (A) shall be limited to freshwater species 

of catfish that are propagated and reared in controlled 

or selected environments. 

‘‘(C) IMPLEMENTATION.—The Board shall review the 

policy described in subparagraph (B) under section 508(h) 

and approve the policy if the Board finds that the policy—

‘‘(i) will likely result in a viable and marketable

policy consistent with this subsection; 

‘‘(ii) would provide crop insurance coverage in a

significantly improved form; 

‘‘(iii) adequately protects the interests of producers; and

‘‘(iv) meets other requirements of this subtitle

determined appropriate by the Board. 

Agricultural Act of 2014, H.R. 2642, pp. 321-22

1.2. Objective & scope 

Objectives and scope of the project were identified in the solicitation. These are reproduced below. 

1.2.1. Objective 

The objective of this contract is to provide information and analysis to aid in the potential development 

of a crop insurance program for catfish producers that will stabilize the margin between rising selected 

costs incurred in the production of catfish and the market value of catfish. 

 

The contractor shall produce a data gathering report that identifies any issues related to insuring catfish 

producers, and the most viable type of insurance plan to be developed. This data gathering is to be 

utilized in the actual development of a plan of insurance. 
Insurance Program Development for Catfish Margin Protection 

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If deemed feasible, the contractor’s further objectives are to develop a pilot program, that:

1) Provides meaningful and timely risk management benefits to producers without distorting markets; 

2) Is cost effective from the perspective of insured producers; 

3) Is actuarially sound so that premium rates will cover expected losses plus a reasonable reserve; 

4) Is able to be administered given the structure and resources of RMA and approved insurance providers; 

and 

5) Demonstrates sound program integrity. 

Any development submitted to the FCIC Board of Directors for approval must adhere to the format 

provided in Section 2.4.2. The contractor may be required to serve as a resource when RMA presents the 

developed program to the FCIC Board of Directors when seeking its approval to offer it as a pilot program. 

If the program is approved for implementation, the contractor shall provide a training package. 

 

1.2.2. Scope 

The contractor shall gather data, provide analyses, and prepare a report that encompasses the objectives 

in Section 2.2. The contractor shall develop an insurance program if RMA deems it is feasible. Any 

potential insurance programs shall meet the following criteria and the criteria for development shall 

include the following rationale: 

1) Conform to RMA’s enabling legislation, regulations, and procedures that cannot be changed;

2) Charge a premium that the insureds must be willing to pay for the insurance; 

3) Be effective, meaningful and reflect the actual risks of producers; 

4) Have best management practices that can be defined, required of an insured and be monitored; 

5) Identify and appropriately categorize perils affecting production and/or revenue as insurable and noninsurable; 

6) Be ratable and operable in an actuarially sound manner; 

7) Contain underwriting, rating, pricing, loss measurement, and insurance contract terms and conditions; 

8) Be an appropriate geographic distribution of production to ensure a sound financial insurance program; 

9) Produce enough interest for the risk to be spread over an acceptable pool of insureds; 

10) Not allow insureds to select insurance only when conditions are adverse; 

11) Avoid or mitigate moral hazards; and, 

12) Not allow a change in market behavior or market distortions that change the quantity 

supplied or shift the supply curve. 

Both objectives and scope are revisited in Section 9 of this report. 

1.3. Methodology 

1.3.1. Project 

The project itself was set up to take place in multiple stages: 

- Data gathering report (this report); 

- Draft and Final Development Submission Packages; 

- Expert Review Comments for Development; and 

- Training Package 
Insurance Program Development for Catfish Margin Protection 

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1.3.2. Data gathering report 

The steps taken to prepare for and develop this data gathering report were as follows: 

- Kickoff meeting with RMA 

- Data gathering and review 

- Listening session planning 

- A review of other gross margin plans and other plans that could be instructive in 

developing a catfish margin plan 

- Conferring with subject matter experts, particularly on issues related to catfish data 

availability, prevailing feed composition, and feeding patterns. 

- Conducting listening sessions in both Mississippi and Alabama, visiting production 

facilities, and meeting with experts 

- Further data gathering, review, and summary of key issues in response to the Statement 

of Work 

- Consideration of ways a catfish margin insurance program might be structured 

- Actuarial review of data; 

- Development of conclusions and recommendations; and 

- Finalizing the report. 
Insurance Program Development for Catfish Margin Protection 

Prepared for Acquisition Services Directorate and Risk Management Agency 

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2. LISTENING SESSIONS 

This section summarizes the listening sessions and includes additional information required by the 

Statement of Work. Several of the topics discussed are areas fleshed out in more detail later in this 

report. 

Venues. The listening sessions were held at the National Warmwater Aquatic Center (NWAC) at the Delta 

Research and Aquatic Center (DREC) at Mississippi State University in Stoneville, Mississippi on July 9th, 

and at the Alabama Fish Farming Center (AFFC) in Greensboro, Alabama, on July 10th. In addition to the 

listening sessions, we spent July 8th meeting with experts at the DREC and visiting a catfish farm and 

hatchery, and on July 9th we also visited the DREC’s own indoor facilities and catfish ponds.

Attendance. Both sessions were well attended. The Stoneville listening session had almost 35 people: 

three RMA extension representatives, 14 catfish growers, three processors, five individuals from FSA/RMA, 

one insurance representative, four representatives from the Catfish farmers of America and the Catfish 

Institute, one catfish feed producer, and three others. One observer commented that over one-third of all 

catfish production was represented in the room. 

Over 25 attended in Greensboro: six catfish growers, three insurance agents, two processors, two 

government representatives, one catfish feed producer, one industry representative, one extension 

officer, five bankers, a journalist, and four others. 

We conferred with industry experts ahead of the listening sessions and determined that it would be 

helpful to arrive with a practical example, however imprecise, to help explain how livestock gross margin 

insurance programs work and what it might look like in the case of catfish. We prepared a handout, 

distributed at the listening sessions (and included as appendix A which provided a basis for discussion. In 

our example, we provided time series for catfish prices and for catfish feed, and a second graph plotting 

the difference (the average industry margin). 

2.1. Potential interest in insurance on the part of producers and insurance 

providers 

At each session, we began with introductions and an explanation of how the LGM program works in 

principle, i.e., covering industry margin as opposed to on-farm perils. In each case, this was a point we 

had to reinforce. We also reviewed historic gross margins with the attendees. 

Given the roughly 50c/pound average gross margin for catfish in recent years, we explained that a gross 

margin policy for catfish might cover margins at the 40 cent per pound level, with variations. We asked 

what farmers thought of the general concept. 

In Stoneville, one attendee reflected the room, saying, “At a price, definitely interested”. “Anytime you 

can take the risk out, people will be more comfortable staying in it.” One farmer with significant 

production said, “At 80 cents margin, people would be interested. At 40 cents, I wouldn’t be interested.”

In Alabama, there was no response as to whether such an insurance mechanism would be acceptable or 

not. The group was skeptical. “There are so many variables...I don’t know whether I’d be interested or 

not,” one farmer said.

At the Alabama session, there was widespread concern with the LGM program’s capacity to include catfish 

policies, its ability to pay indemnities, and skepticism about the scale of support the industry would get in 
Insurance Program Development for Catfish Margin Protection 

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the event of narrowing margins. The farmers zeroed in with great concern and interest on exactly how 

much of a subsidy there would be in the premiums for the program. Several were skeptical as to why a 

program would be helpful, wondering how it would differ from them saving on their own. Examples of 

feedback included: 

 “What is the financial benefit? Basically it’s just averaging our margins over the long term.”

 “If everybody has a claim, there’s not going to be any money to pay out...if we’re paying a 

premium, then all we’ll be doing is getting our premium back...plus 1-1/2 cents from the 

government.”

 “Unless somebody is investing profitably the premiums that the farmers are paying in when 

everything’s good, I don’t understand [what the benefit would be].”

 “All we’re doing is we’re investing money in this program, it’s going to average the highs 

and the lows, but all the money we’re going to get back is the money we paid into it. There 

is no free lunch.”

 “We could put that money in a savings account...same thing.”

 Over what time period are we assessing that margin? Last twenty years? Last year? Last four 

years? If you set the margin based on the last four years, even if counting last year, the 

previous three years don’t make it worthwhile.

2.2. Risks that affect producers 

Attendees identified multiple risks faced by catfish farmers. The primary risk noted was power outage, 

which reduces available oxygen and quickly leads to fish death. Others included new diseases (in recent 

years, Aeromonas hydrophila), feed costs, and depredation from birds. Bird depredation impacts farmers 

differently; it appears to be growing worse. Alabama farmers also spoke of algae problems: “algae 

release a toxin and the pond goes belly up. This doesn’t seem to happen in the Delta.”

Another risk faced by farmers is difficulty selling at the best time - there can be difficulties selling to the 

processor when supplies are plentiful and the processor’s capacity is fully utilized. At these times, a 

farmer’s ability to be slotted in by the processors depends on their relationship. Farmers reported facing 

a lot more processor deferrals/refusals attributed to “off flavors” during times of oversupply.

2.3. Identify insurance programs that meet needs and operations 

There is no insurance program, public or private, directly covering catfish losses. Whole-Farm Revenue 

Protection provisions were recently changed to allow up to $1 million of expected revenue from animals 

and animal products. A provision of the predecessor policy (Adjusted Gross Revenue) which required no 

more than 35% of expected revenue from animal sources was removed. Therefore catfish growers with 

less than $1 million expected revenue might theoretically be covered by this program. 

However, though we did not explore the Whole-Farm plan in depth, it appears unlikely it would cover 

catfish: 

 Animal species covered by WFRP must be grown in a controlled environment; for all the care 

and effort that goes into raising catfish in ponds, they are not controlled environments (e.g., 

they are vulnerable to predation); 
Insurance Program Development for Catfish Margin Protection 

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 Revenue-to-count for the WFRP policy includes unsold inventory, but prior research has not 

come up with a cost effective way to count catfish inventory; 

 The handbook indicates that Allowable revenue specifically excludes revenue from all 

uninsurable commodities – catch 22 - catfish is not currently an insurable commodity. 

Other government programs exist that cover other aspects of animal agriculture, but explicitly exclude 

catfish. 

There are some forms of property insurance available to farmers but they would not cover the loss of fish. 

At both sessions, reference was made to a private company that years ago offered catfish policies. 

Apparently, claims overwhelmed the program and it was ended within a year or two. Growers have seen 

no such insurance since. 

Catfish grower familiarity with more traditional crop insurance products (e.g., Revenue Protection) varies 

– some have diversified operations and use such insurance; some may not use them but are familiar with 

them; and yet others – particularly smaller scale farmers focusing solely on catfish production – have little 

familiarity with them. 

2.4. Previous industry losses / aid 

The catfish industry has declined by half in output over the past decade. This shift has happened 

primarily due to economic forces, not unusual on-farm events that would affect a significant share of 

producers. 

At the sessions, attendees referred to past instances of government payments to catfish farmers. They 

mentioned indemnities from both disaster programs and grant payments to help with high feed prices. 

They made reference to the following programs: 

- Trade Adjustment Assistance (TAA) from the USDA (2010). 

- Feed Assistance under the Aquaculture Grant Program upon proof of feed purchases 

(2009) 

- Federal disaster assistance of $11 million in response to loss or damage of feed, 

increased feed costs, and loss of feeding days (2007) 

- $34 million in payments in 2003 to offset high feed expenses in 2002. 

Further details are provided in 6.6.d) Disaster programs. 

2.5. Why interested in insurance and willingness to pay 

The detailed example we provided of how the indemnity mechanism of the gross margin insurance 

program might work, using actual catfish and catfish feed prices, though not precise, should be 

reasonably close to what an actual program might look at, after reviewing the other types of LGM 

policies. Nevertheless, at a price point of paying a penny or two to guarantee a 40 or 45-cent margin, we 

did not have any farmers say that represented a useful tool. 
Insurance Program Development for Catfish Margin Protection 

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There was an indication that, should a program be put in place, some farmers that would otherwise not 

be interested in a program may take out policies because not doing so would leave them at a 

disadvantage. 

2.6. Perceptions of conflicts and difficulties of implementing an insurance 

program 

The listening sessions surfaced potential resistance to a program. Part of the resistance seem to be that 

the program would not address a farmer’s individual risks, but rather pay them an indemnity when prices 

were going against the whole industry. 

There was not only skepticism about the very idea of a program — i.e., that the government would spend 

money only to take premiums from farmers and redistribute them to the same farmers later. Some were 

even skeptical that the money would be there when the indemnity triggering situation occurred. In 

addition, they were very focused on the level of subsidy that would be provided by the program. 

Some of the opposition to a potential program appeared to be linked to concerns about it distorting 

market behavior, in particular that it might encourage marginal producers to stay in business when they 

ought not to — presumably keeping prices lower for the more efficient producers. Several producers 

voiced concern. 

The insurance agents in attendance did not voice specific concerns. Bankers attending the Alabama 

session said that if there were catfish insurance, it may be made mandatory in connection with loans 

(e.g., currently row crops are generally assigned to the bank in the insurance policy). 

One farmer (in Mississippi) said, “I’m concerned about the unintended consequences of government 

programs...if you create a chronic oversupply... if someone is getting a government check, they might not 

cut back.” 

Attendees did not believe that the creation of an insurance program would have an impact on feed prices. 

The market for catfish feed was considered competitive enough. Moreover, there was consensus across 

both farmers and bankers at the Alabama session that the availability of insurance would not draw many 

new catfish farmers to the business. 

At both sessions, the groups were concerned about caps. Not just “indemnity caps”, (which would not 

apply with RMA products), but also about the LGM $20 million cap. 

In Alabama, several growers also expressed concern that processors might offer less for a producer’s fish 

if the market gross margin gets close to the trigger point for insurance. “If margin gets close to trigger, 

processors might say ‘you’re going to collect insurance, I’ll give you 85 cents [per pound]...’”

A couple of attendees noted that it would be very important to educate producers and agents before a 

new program hits the ground, i.e., having the education process take place before/during the 

development process. It would be important to show producers what would have happened had insurance 

been in place. 

There were concerns expressed by several individuals that producers affected by something on farm 

would impact the insurance policy they had. E.g., if they had coverage for a million pounds of fish but 

birds and disease halved that, would they be compensated based on one million pounds? “What if birds 

eat the fish, so there’s nothing there to feed?”
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2.7. Describe typical production activities 

Mississippi has the largest catfish acreage and overall production. Most of it takes place in the Delta, in 

4’-6’ deep ponds of varying sizes. There is additional production in east Mississippi, which more closely 

resembles the production in Alabama. 

Production in Alabama tends to be different. Ponds in Alabama are of variable depth, taking advantage 

of the local topography. Many Alabama growers grow hybrids, and use multi-batch practices that have 

fish of multiple sizes in their ponds. The larger producers have to sell year-round; their ponds are never 

empty. Moreover, whereas in the Delta they might stock 5,000-7000 pounds per acre, in Alabama it could 

be 8,000-10,000 pounds per acre. Because of the higher stocking densities, there is more potential for 

profit in Alabama, but also more risk. Alabama attendees reported a trend toward use of deeper ponds at 

higher stocking densities. 

In the Delta, fingerlings are stocked around May. In Alabama, typically they stock fingerlings in DecemberJanuary and May-June. Fingerlings come mostly from Mississippi – even for the Alabama farmers. 

Delta ponds often need to be emptied and re-shaped every 5-8 years. In Alabama, farmers do not empty 

ponds are unless they have to. 

2.8. Feed and feed conversion 

One attendee suggested keeping a rolling average for feed prices over several years. Also, averaging the 

feed conversion ratio – say over the last 3 years. “The difference between 2.5 and 2.7 is substantial.” 

Another suggested using a rolling average of fish sold to account for production. 

Conversion factors are different: in Mississippi the factor would be 2.7; in Alabama, 2.3. Greg Whitus of 

the AFFC indicated that 2.5 would be a “happy average”.

At Greensboro, attendees mentioned there being three local catfish feed mills. 

2.9. Risk mitigation 

One grower noted that some producers use options to hedge against potential increases in the costs of key 

feed components (feed prices follow grain markets). However, another noted that hedging requires having 

enough capital to do so, and said that many lack the capital. Another said, “Insurance companies could 

hedge feed costs, or loans could be provided to producers to allow them to hedge – they don’t have the 

capital to do it”.

Catfish farmers often “book feed”, locking feed prices in advance. Some may book all of their feed this 

way, though they may do it in stages (e.g., 3-6 times per year) rather than booking all of it a year in 

advance. 

Quite a few catfish farmers do effectively mitigate risk with crops. However, these other activities are 

generally set up as independent entities, and not all catfish farmers are so diversified. The two activities 

hardly ever balance out...some will be “way bigger catfish farmers”, others “way bigger row crop 
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farmers.” Finally, switching acreage from catfish to crops is not a short-term proposition; rather, it is 

something that would take place over several years. 

One farmer noted that fish can be carried over from one season to another- so that fish sold “may be 

zero” – indicating that this should be factored into any insurance plan. 

Farmers also noted that inventories are lowest by April-May. 

Anything that adversely affects water quality is potentially disastrous to a catfish farmer. Power outages 

are one major threat identified. Water oxygen levels are monitored continuously at most ponds. 

Many/most farmers have adopted more sophisticated oxygen monitoring systems that may relay quality 

measurements back automatically at intervals throughout the night. Nevertheless, farmers often have a 

person checking the ponds in addition to the sensors. 

In addition, water quality is checked once per week. Algae are controlled using a chemical. 

There tend to be more off-flavor problems with catfish in summer. However, this issue is more 

controllable then. There is little that can be done in the winter, as fish are not feeding, so the off-flavor 

cannot easily be fixed. 

At both listening sessions, a farmer mentioned that one risk mitigation option is that producers can selfinsure. 

FSA representatives noted that FSA has an ELAP program, but it has no payouts related to catfish. 

2.10. Nature of sales / Use of contracts / Processing 

Growers indicated that there is generally a written agreement between the processor and the grower as 

to what one plans on selling. It usually specifies poundage but not price. Most farmers are thus “tied” to 

a specific processor. Agreements help processors know where they will be getting their fish from. 

The current arrangement of informal written agreements appears to provide a system of checks and 

balances; it serves as a commitment device, not as a lock-in device. Producers know there are 

consequences for selling elsewhere, and processors generally have excess capacity and know producers 

can take their fish elsewhere if they want to do so. 

The verbal consensus was that these were informal agreements that processors would not bother 

enforcing directly. However, given the limited number of buyers for catfish, growers made clear that 

processors gave preferential treatment to some when supplies were plentiful – this has the effect of 

forcing some producers to hold onto their fish longer than they would like until such time as a processor 

would be willing to take them. 

Processors have to run the same amount of fish every month. They have to have fish year-round. “When 

fish get plentiful, they buy the best fish they can.”

Growers noted that the price of fish is size specific. 

2.11. Timing of sales / timing of insurance 

Catfish sales timing varies by producer. One producer said he sold all his fish over the winter: “October 

to January and I’m done.” Other catfish farmers may sell at different times, or year-round. 
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Producers indicated that local markets are volatile, even from one state/processor to the next. 

When asked about the period of time that would need to be covered, Alabama farmers pointed out that 

they are feeding year-round but that the feeding pressure is strongest in summer when they are feeding 

the most. “We cash flow well until July.” At that point, they may be spending more on feed than they 

are bringing in. “We look great in the beginning of the year.” 

2.12. Describe other commodities typically produced, revenue relationships 

between other commodities 

There is no typical relationship between catfish farming and other forms of agricultural activities. Some 

catfish farmers produce catfish exclusively; others grow row crops or raise cattle, and yet there are 

others for whom catfish farming is a relatively insignificant part of their operations. Listening session 

participants stressed that the importance of catfish in each farm varied dramatically, from relatively 

insignificant to the entire operation. 

Though there is no typical relationship, some generalizations can be drawn. Many Mississippi Delta catfish 

farmers are also engaged in row crop production. Over the past decade, tens of thousands of catfish 

production acres have been either retired; a decade ago, many acres were retired for conservation; in 

more recent years, catfish land has been shifted over to row crops. 

At the Alabama session, we were told that Eastern Mississippi farmers might have 40 to 60 acres of catfish 

plus row crops, and there might be 50 or so farmers there. In Alabama, there are roughly 75 catfish 

producers, many of whom were said to raise cattle as well. 

No information has been found indicating the proportion of farm revenue coming from catfish, either as 

an average or as reflecting a typical producer. 

Only twenty catfish farmers attended the listening sessions. Though there were some very large farms 

represented by attending farmers, this still represented less than 10% of farmers. Moreover, information 

provided on insurance awareness and usage (for other commodities grown on diversified catfish farms) 

was anecdotal. There are no available data on catfish farmer usage of crop insurance. 

However, broadly speaking, most crop farmers in both Mississippi and Alabama have insurance. 

2.13. Estimate of revenue of each operation 

A 50-acre farm stocking 6,000 pounds an acre would bring in $300,000 in revenue at $1/pound. Farm 

sizes vary dramatically, however. The 2010 National Animal Health Monitoring System (NAHMS) 

Aquaculture survey showed that the average stocking density across all sizes of operations was 5,838 

pounds per acre. The actual stocking density for the smallest farms was 4,224, while the stocking density 

for the midsize and largest farms was over 5,800. 

2.14. What percentage of producers are full time? 

There are no statistics showing the percentage of full-time catfish producers. Anecdotally, farmers of the 

listening sessions claimed, “catfish farming is a full-time job.” It is also clear, though, that “full-time” 

referred to the catfish farming requirement that ponds be monitored constantly. 
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2.15. Analyze, summarize, interpret data 

We would characterize the level of interest of catfish farmers in a gross margin insurance program as 

mixed. 

There is no question that the industry as a whole and plenty of farmers — as evidenced by the significant 

attendance at both listening sessions — are interested in any potential support that an insurance program 

could provide. Many of the attending farmers remained focused on farm perils, though, which would not 

be addressed by a gross margin program. 

Both groups came to understand the way a gross margin program would work over the course of each 

meeting, and provided useful information, suggestions, and questions. In Mississippi, industry 

representatives were enthusiastic, while other attendees’ responses there were more guarded. In 

Alabama, once the program concept was understood, there was primarily skepticism that a program 

would be of value to the farmers – many reasons were given. 
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3. CATFISH OVERVIEW 

3.1. Sources of catfish data 

The ability to analyze and analyze the feasibility of and produce a catfish margin insurance product relies 

on reliable long-term data covering the catfish industry. Although some data is still routinely collected 

and reported, the USDA stopped reporting catfish prices, pounds sold, pounds of feed sold, feed prices, 

and other vital data in February 2013. USDA has not announced any plans to resume collecting or 

publishing these data series. The lack of some of this data poses a challenge to producing a catfish 

insurance product. 

However, as soon as the USDA announced it was going to stop collecting and reporting catfish data, The 

Catfish Institute hired Dr. Terry Hanson of the University of Auburn to continue collecting several data 

series: monthly prices paid to catfish producers and monthly catfish feed prices. Dr. Hanson is a wellrespected catfish industry advocate who has built personal relationships with key people who supply him 

with the data. Once a month, he calls feed mills to get their feed price. He does the same with the 

processors to get prices paid to farmers. Once he has all the numbers he enters the figures into excel 

spreadsheets. A copy of these spreadsheets is included with this report in Appendix C. 

Dr. Hanson began collecting the data immediately so there is no gap between the USDA time series and 

his data. Although Dr. Hanson collects feed and catfish prices, there are still data series that are vital to 

understanding the catfish industry that are missing: pounds of feed sold and pounds of processed catfish. 

These are no longer available. 

3.2. Economic context 

Catfish is the most economically important aquaculture finfish in the United States. This native fish, 

indigenous to Southeast US, was introduced to other parts of the US as a game fish in the mid-1900s. 

Significant commercial production of farm-raised catfish began in 1970 and became the base of an 

important production and processing industry in southern states. Today, the catfish sector is under 

pressure, with competition from similar species from Southeast and East Asia. 

3.2.1. US production 

In 2003, 662 million pounds round weight of US catfish were processed. Sales fell to 307 million pounds in 

2014, less than half of the volume at the peak. The acres of water used for catfish production in the US 

fell from 181,100 in 2011 to 126,910 in January 2015, a decline of 30% in just the last four years. 
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Figure 1: US catfish sales, million pounds 

 Source: USDA NASS 

The impact of competition from imports and rising feed costs has resulted in a major contraction of the 

US catfish production sector. This has affected the sale of all domestic farmed catfish products including 

foodfish, broodfish, stockers, fry, and fingerlings. 

Mississippi, Alabama, Arkansas, and Texas are the major catfish producing states in the US. In 2014, 

Mississippi remained the largest producer with 78,000 acres followed by Alabama with 30,500, Arkansas 

with 10,600, and Texas with 2,000 acres. All four states have experienced significant declines in catfish 

production acreage since acreage peaked in 2002. Total losses of production area are 30%, over 54,000 

acres in the last five years. Over the period, Alabama has experienced the least contraction, losing 7,800 

acres or 20% of its total catfish pond area. In contrast, the Mississippi catfish pond acreage has declined 

by 27% and Arkansas by 56%. The Alabama production area differs in character from Mississippi: it is 

located in more undulating areas, facilitating pond construction, and farmers often have fewer row crop 

alternatives. This is a partial explanation of the less dramatic impact on Alabama production. 

The decline in catfish production acreage has slowed. Combined with higher stocking densities, the net 

effect has been to slow the decline in production volumes. 
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Figure 2: Catfish, US acres taken out of production 

 Source: USDA NASS 

3.2.2. Domestic demand 

Broadly speaking, catfish competes for the consumer protein dollar. In 2013, per capita availability was 

97.9 pounds of red meat, 70.2 pounds of poultry, and 14.3 pounds of seafood, for total availability of 

182.5 pounds. This represents a per capita decline of 9.4% from the peak per capita consumption of 

201.5 pounds registered in 2004. 

Figure 3: US meat, poultry, and seafood consumption per capita, 2000-2013

Source: Calculated by ERS/USDA based on data from various sources (see http://www.ers.usda.gov/dataproducts/food-availability-(per-capita)-data-system/food-availability-documentation.aspx)

Per capita seafood consumption has also declined slightly in recent years, though overall seafood 

consumption has risen overall due to the country’s growing population.
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Figure 4: US per capita seafood consumption, 2000-2013

Source: ERS/USDA, updated Feb 1, 2015. 

Overall, domestic availability of fish was up 5.5% between 2000 and 2013. This growth is due to 12.2% 

growth in the population overall during that period. This growth in consumption has been increasingly 

fueled by imports. 

Although it is the largest aquaculture product, catfish consumption represents only a modest share of fish 

and shellfish consumption. Of the 14.3 pounds available per person, 0.6 pounds are catfish. Consumption 

by seafood type is shown in the following table, which shows consumption in recent four-year intervals: 

Table 1: Seafood consumption by fish and shellfish type, 2005-2009-2013

Type 2005 2009 2013

Shrimp 4.1 4.1 3.6

Salmon 2.4 2.0 2.7

Canned Tuna 3.1 2.5 2.3

Tilapia 0.8 1.2 1.4

Pollock 1.7 1.5 1.2

Pangasius -- 0.4 0.8

Cod 0.6 0.4 0.6

Catfish 1.0 0.8 0.6

Crab 0.6 0.6 0.5

Clams 0.4 0.4 0.4

Other 1.5 1.9 0.4

Total all species 16.2 15.8 14.5

Source: National Marine Fisheries Service (raw data) 
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One can see that not only did per capita seafood consumption drop overall, but that the decline in catfish 

consumption coincided with increasing tilapia consumption and the emergence and growth of pangasius 

sales. 

Pangasius is a species of fish in the same genus as catfish and is native to Asia. Imported Pangasius first 

appeared in the list of US top ten species consumed in 2009, ranked at number 10. In that year, it was 

estimated that Americans consumed just over a third of a pound. Over the next two years, consumption 

doubled and pangasius now ranks 6th, two places above catfish. 

3.2.3. US seafood trade 

Seafood imports overall grew 6% between 2005 and 2013, though exports grew twice as fast over the same 

period. The net effect was a slight decline in net imports. 

Table 2: Seafood trade, 2005-2009-2013

VOLUME VALUE

-------- Metric tons, millions -------- ----------- $ billions -----------

2005 2009 2013 2005 2009 2013

Imports 2.320 2.341 2.459 12.1 13.1 18.0

Exports 1.290 1.120 1.456 3.8 3.7 5.2

Net imports (I-X) 1.030 1.221 1.003 8.3 9.4 12.8

Total trade (I+X) 3.610 3.461 3.915 15.9 16.8 23.2

Source: NOAA, National Marine Fisheries Service 

3.2.4. World situation 

Global seafood demand 

Globally, seafood consumption has risen roughly 10% since 2000, from just under 15 pounds per person to 

16.5 pounds per person in 2013. This of course is compounded by global population growth. Americans 

eat less seafood than the global average. 
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Figure 5: Worldwide fish and seafood consumption, 2000-2013

 Source: FAO Stat 

Catfish production 

From 2004 to 2013, catfish production in China grew fourfold, while US production fell by more than 40%. 

Production of channel catfish is insignificant outside of the US and China. 

Figure 6: Channel catfish production, mt, 2004-2013

Source: FAO FishStat J 

Channel catfish is not the only species of catfish produced, though. Pangasius production is massive in 

scale compared to channel catfish. Vietnam is by far the predominant Pangasius producer. From 2004 to 

2008, pangasius production grew from 255,000 MT to 1.2 million MT and has remained near that level 

since. 
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Figure 7: Pangasius catfish production, metric tons, 2004-2013

Source: FAO FIshStat J 

Competition from Pangasius species from Southeast Asia has captured market share from domestic 

catfish. The imports are frozen, boneless fillets and these supply a large share of total US consumption. 

Imports serve to displace domestic production and pressure prices, but the extent of price pressure is not 

clear; domestic production retains a core niche market, particularly in the Southern US. 

Figure 8: US domestic production vs. imports of all species of catfish, 2001-2014, metric 

tons 

 Source: US International Trade Commission (USITC), USDA NASS 

In Figure 8 above, you can see that the decline of US catfish production is accompanied by an increase in 

imported catfish. Although the species are not the same, the taste and consistency seem to be close 

enough that consumers cannot discern between species. Other whitefish such as tilapia and swai may be 

substituted for catfish. 
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In 2005, the US-produced market share of frozen fillets sold in the US market was 80%; by 2012, this 

market share had fallen to 22%. The rate of change has accelerated in recent years; between 2011 and 

2012, imports of frozen pangasius fillets increased by 34 million pounds (14%) to 237 million pounds, 

accounting for 78% of all US sales. Frozen tilapia shipments from China add to the competition. 

The chart below shows global production of channel and pangasius catfish, in context. These two species 

represent virtually all the catfish produced in aquaculture worldwide. In 2004, the US produced 83%, 

about 285 million Kg of catfish, out of 342 million Kg total. By 2013, the US accounted for just 38% of 

world channel catfish production. Neither the US nor China export much channel catfish; virtually all 

production is consumed in each respective domestic market. Pangasius, on the other hand, is exported in 

large volumes. 

Figure 9: World channel and Pangasius catfish production, metric tons, 2004-2013

 Source FAO Stat 

Catfish trade and inspection issues 

Over the past fifteen years, imports of pangasius and other whitefish products have flooded the US 

market. Widespread, fraudulent seafood labeling contributes to a very low level of consumer 

understanding of fish species attributes and to price pressures on US catfish. 

The US catfish industry prompted the US government to investigate the Vietnamese industry to assess 

whether the competition was fair. The government concluded that some companies were dumping 

product and penalty duties were imposed on a company-by-company basis.1

 Some Vietnamese exporters 

signed agreements with the US industry and they are excluded from anti-dumping retaliation. The impact 

of the penalties is anticipated to be marginal because the competitive difference is so great and the 

Vietnamese have the potential to adjust their export strategies. As a result, some of the major exporters 

will suffer no serious anti-dumping penalties. Nevertheless, the measures taken have been contested by 

the Vietnamese government. 

 

1

 US International Trade Commission, Certain Frozen Fish Fillets From the Socialist Republic of Vietnam: Amended 

Final Results of Anti-dumping Duty Administrative Review; 2010-2011, Federal Register, 78 FR 29323 (May 20, 2013) 
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The US catfish industry advised US federal agencies that production conditions in Vietnam represent a 

threat to food safety. Provisions were consequently introduced into the Food, Conservation, and Energy 

Act of 2008 (Farm Bill) that would impose USDA food safety checks on Vietnamese production rather than 

Food and Drug Administration (FDA) checks. Some domestic catfish processors objected to such changes 

because of the implications for their own operations. The envisioned move was criticized by several 

government agencies including the Government Accountability Office (GAO) as it duplicated controls 

already in place and was not justified by evidence of food safety issues associated with Vietnamese 

imports2

. 

Food inspection duties have now legally been passed to the USDA. The USDA, however, has not 

completed rule making for the introduction of regulations. Proposed guidelines have been presented, but 

as of this writing, a fish inspection program has not been implemented. 

3.3. The production challenge – price/cost squeeze on margins 

Catfish farmer incomes fell 25% in 2012, with few reporting profits in that year. Profitability has been 

declining as a whole for over a decade now. In addition to intense competition from imports, catfish 

farmers have recently faced higher feed and fuel costs as prices of corn, soybean, and energy increased. 

Catfish farmers have experienced price/cost squeezes, particularly in 2012 and 2013. Intense 

competition has lowered prices the same time production costs were higher. As a result, many farmers, 

particularly in Mississippi have removed their levees and switched to other crops such as soybeans. 

Although imports have continued to increase, input costs have moderated, lessening the price/cost 

squeeze. 

3.3.1. Catfish prices 

Catfish prices from 2000 through 2010 were generally at or below $0.80 per pound. In 2011, nominal fish 

prices paid to producers spiked to over $1.20/pound because of low inventories. However, in 2012 the 

price dropped dramatically. 

 

2

 Government Accountability Office, Seafood safety - Responsibility for Inspecting Catfish Should Not Be Assigned to 

USDA, GAO-12-411, May 2012 
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Figure 10: US farmer price received for catfish, 2000-2013

 Source: USDA NASS and T. Hanson 

3.3.2. Feed consumption 

Feed represents about 60% of farm production costs. Consequently, margins are very sensitive to feed 

costs changes. The price of feed has been very high in recent years as the price of the main components, 

soybeans and corn, hit record levels. The price of 32% crude protein floating feed reached record levels 

in 2012, with producers paying $469 per ton of feed on average, or $48 per ton (12%) higher than 2011. 

This followed a feed price increase of almost 20% between 2010 and 2011. More recently feed prices have 

moderated on lower corn and soybean prices. 

3.3.3. Feed prices 

In Figure 11, prices for 28% feed and 32% protein feed are shown. Feed prices are highly correlated but 

there are periods when they do not track tightly together. In addition, the price differential has 

increased slightly over the period shown. 
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Figure 11: Catfish feed price per ton, 32% and 28% protein 

 Source: USDA NASS & T. Hanson 

3.3.4. Feed purchases 

In order to hedge against feed price volatility, most catfish farmers use feed bookings to ensure a stable 

price and reliable supply. One feed manufacturer we spoke with said farmers can book feed six months 

to a year in advance at a contracted price and tonnage. Once he has all the bookings established for the 

year, he uses the futures market to hedge the amount of feed ingredients he will need to supply those 

contracts. 

3.4. Catfish production 

3.4.1. Domestic production and production systems 

Between 1970 and 1990, catfish output grew rapidly to just over 350 million pounds. It then further 

expanded to almost 608 million pounds, according to the 2005 Census of Aquaculture. Over the past 

decade, however, production has declined. The 2013 Census of Aquaculture shows that 354 million 

pounds of foodsize catfish were sold, a drop of 42% since 2005. 

According to the 1998, 2005, and 2013 Censuses of Aquaculture, there were 1,370 catfish operations in 

1998, 1,160 in 2005 and only 695 in 2013. The decline in catfish production has accompanied a decline in 

the number of farms and consolidation of production. 
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Table 3: US catfish farms 

Farms % Number sold (1,000) % 

2005 2013 Change 2005 2013 Change

 Foodsize or market 

size 1,017 605 -41% 396,554 211,356 -47%

 Stockers 102 67 -34% 33,637 73,997 120%

 Fingerlings or fry 184 117 -36% 683,112 172,876 -75%

 Broodfish 39 19 -51% 503 41 -92%

Catfish total 1,160 695 -40% 1,113,806 458,270 -59%

2013 Census of Agriculture, Table 2

Number of farms does not add due to simultaneous operations on the farms.

The table below also shows how the value of sales has changed. The value of the catfish sold has dropped 

below $400 million. 

Table 4: Catfish operations 

Number of farms Sales ($1,000)

1998 2005 2013 1998 2005 2013

Alabama 250 192 140 $58,222 $98,413 $107,248 

Arkansas 156 142 49 $55,307 $77,852 $28,582 

Mississippi 404 386 213 $285,366 $243,122 (D) 

Other states* 560 440 293 $51,815 $42,498 $240,035 

United States 1,370 1,160 695 $450,710 $461,885 $375,865 

(D) data withheld

* Includes MS for 2013 sales

2013 Census of Aquaculture, Table 7

The catfish industry comprises many relatively small- and medium-sized operations. Though there are 

large producers, none holds a significant share of output. 

Key characteristics of production 

Channel catfish (Ictalurus punctatus) is the predominant species in US catfish aquaculture. Channel 

catfish do not naturally reproduce in ponds, which gives breeders great control over crossing. Another 

advantage of channel catfish is that sexually mature fish are easily spawned, which is essential for 

artificial reproduction. Unlike many other aquaculture species, catfish fry accept manufactured feeds 

and growth and feed conversion efficiencies are good at all stages of production. In addition, they 

tolerate relatively high levels of crowding and a wide range of environments. For all of these reasons, 

channel catfish are ideal for commercial aquaculture. 

Catfish are warm water fish that grow best in a temperature of 85°F. Consequently, production is limited 

to the south and southeastern regions of the United States. In 2010, Mississippi, Alabama, Arkansas, and 

Texas accounted for 94% of US catfish production. The remainder is in California, Louisiana, and North 

Carolina. Almost all fingerlings are produced in Mississippi. 
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The recent NAHMS/APHIS study (2011) of production practices in the four leading states revealed 

significant differences between the scale of production in the east of the region (the rolling hills of 

Alabama and eastern Mississippi) and the west (Arkansas, Louisiana, and the Mississippi Delta). Farms 

located in the east are more than three times larger than those in the west. 

According to the recent NAHMS/APHIS study (2011), 95% of catfish (in 2009) are sold for processing into 

fillets. Most commercial producers specialize in selling to this market. Direct sales to consumers or local 

retailers are a niche market that is largely serviced by smaller producers. Today, catfish are processed 

into a wide range of value-added products as well as fillets such as breaded strips, breaded nuggets, and 

breaded trim pieces. 

Production Area 

The majority of US catfish aquaculture is located in the delta region of Mississippi, eastern Mississippi, 

and western Alabama. The map below shows major production areas. Approximately 86% of production 

occurs in the counties highlighted. 

Map 1: US catfish production areas 

 Source: Agralytica 

Production system – channel catfish 

It takes 18-36 months to produce a foodsize catfish. Catfish production involves several stages: 

reproduction, hatching, fry production, fingerling production, and grow-out. The hatching industry is very 

concentrated; there are state run and private hatcheries as well. Many of the fee-fishing operations have 

their own hatcheries to stock their ponds. According to the 2013 Census of Aquaculture, there were 67

farms that produced stockers, 117 farms that produced fingerlings and fry, and 19 farms that produced 

broodstock. 
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Spawning begins in the spring when water temperatures are consistently around 75°F. Broodfish begin 

spawning when they are about 3 years of age and weigh at least 3 pounds. The prime spawning age is 

between 4-6 years of age with fish weighing 4-8 lbs. Older fish produce fewer eggs and larger fish cannot 

enter the containers used as nesting sites. Brood stocks are maintained at about 2,000 pounds per acre to 

provide good environmental conditions and minimize overcrowding that can cause spawn suppression. 

Brood fish typically lay 3,000-4,000 eggs per pound of body weight. The percentage of females spawning 

depends on the condition and age of the female broodfish. The percentage of females that spawn each 

year ranges between 30-80%. Females lay eggs over several hours in layers in the nesting containers. 

Containers are checked every 2-3 days for the presence of eggs. 

Catfish eggs are collected and placed in insulated and aerated containers and transported to the 

hatchery. The eggs are hatched in indoor tanks or troughs holding 90-100 gallons of water. The most 

critical factor in egg hatching is high quality water supply. Egg hatching tanks have a series of paddles 

along the length of the tanks that rotate the water to provide aeration and circulation. Hanging wire 

baskets are placed in the tanks between the paddles. Each basket holds a mass of eggs. After roughly 5 

to 8 days, the eggs hatch into sac-fry. 

Sac-fry swim out of the wire basket and form tight schools. They are siphoned off into buckets and 

transferred to fry rearing tanks. Initially, the newborn sac-fry are not fed because they have an attached 

yolk sac they receive nourishment from (hence the name sac-fry). At 3-5 days after hatching, the sac-fry 

absorb the yolk sac and turn black. The fry (now called swim-up fry) swim up to the surface seeking food. 

Swim-up fry must be fed 6-12 times a day to survive and grow. Farmers feed the swim-up fry a 

nutritionally complete feed for 2-7 days before transferring them to the nursery pond. 

In the nursery pond, the fry are not fed any manufactured feed. Instead, farmers rely on the naturally 

available foods in the pond. The fry spend the next 5-8 months growing out in the nursery ponds to 3-8 

inches in length. They are now called fingerlings and are transferred to earthen grow-out ponds or they 

may be grown further in the nursery pond to stocker size (0.2-0.25 pounds) or foodsize (1.2–2.5 pounds).

Many catfish producers produce fry and fingerlings, as well as food-size fish production. Specialized fry 

and fingerling producers are more common in western Mississippi and Arkansas. Almost one-fifth of all 

operations produce all or some of their own fingerlings according to NAHMS/APHIS study (2011). 

Fingerling production, like fry production, is also standardized. Fingerlings grow faster and bigger at 

lower stocking densities but more can be grown with higher stocking densities. The stocking density is a 

decision each farmer has to make depending on constraints and costs. The nursery pond is managed so 

that it has an abundance of natural foods for the small fry. After about a month, when the fingerlings are 

big enough and there are not enough natural foods, manufactured feeds are introduced. They are fed a 

small floating pelletized feed of 32-35% protein. As the fish grow, the pellet size is increased. 

Fingerlings are particularly susceptible to infectious diseases. Careful management is critical to ensuring 

a high survival rate. Losses to predation and diseases vary greatly depending on management and water 

quality. Survival rates over 60% are considered excellent. The average survival rate is more like 45%. 

Once the fish are big enough, they are typically moved to a different pond. However, some farmers 

continue to use the same pond for the rest of the production cycle. 

After the fingerling stage, grow out production can take many different forms depending on the farm, 

region, and farmer. In addition, there is an intermediate stage during growout when the fish reaches 0.2-

0.25 pounds, called stocker size. Not every production system makes use of stockers, though. 
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There are 3 cropping systems in use: single batch, multiple batch, and modular. 

 Single batch systems are usually stocked with large fingerlings. In the single batch system, 

larger fingerlings are stocked once a year into a growout pond. No additional fish are added 

during the growout phase; all the fish are grown to food size and are harvested at one time. 

Multiple ponds are often used so that a farmer may have one batch or more ready for 

harvest every year. 

 Multiple batch systems are stocked with smaller fingerlings. In a multiple batch system, 

smaller fingerlings are stocked multiple times throughout the year so that there are several 

class sizes of fish all in the same pond. When they reach food size, farmers harvest only the 

larger fish using a grading device – usually specially designed seine nets. Shortly after 

harvest, the pond is stocked with new fingerlings. This method allows the farmer to have 

more harvests per year and space out sales. This can prevent a glut of fish being brought to 

the processor; however, it is less of an issue than it once was, given that farmers have 

increasing control over the timing of their stocking and harvests. 

 In the modular system, different ponds are used at several life stages. Farmers usually 

move fish when they reach certain sizes, typically, fingerling size, stocker size, and growout 

size. The modular system uses more ponds and as such may be more capital intensive. 

Farmers initially stock fingerlings to a smaller pond and grow more for one season until they 

reach stocker size. They are then moved to a larger growout pond. Using the smaller pond 

reduces costs, management time, and may increase survival rates. 

Each system has its advantages and disadvantages. In addition, regional variations make some systems 

better than others do. For example, in the Mississippi Delta, ponds must be drained every 5-7 years so 

the multiple batch system is very cumbersome to implement there. In western Alabama where the ponds 

rarely need to be drained, the multiple batch system is very popular. 

According to the 2010 NAHMS Aquaculture survey, 81% of operations operated multibatch production 

systems. Those farms were responsible for 88% of the total fish production. Operations using the single 

batch system accounted for 14% of the operations and 11% of the fish. The remaining systems were 

unspecified. They accounted for 4% of operations but only 0.3% of the total fish produced. 

Stocking densities vary widely from farm to farm and no consensus exists for the best stocking density. 

Farmers decide their stocking density based on experience, environmental conditions, farm resources, 

and management ability. 

Production system – hybrid catfish 

Hybrid catfish production is similar to channel catfish once hatched, but vastly different in the 

reproductive stage. Open pond and pen spawning systems used in channel catfish production do not work 

to produce hybrid catfish. Commercial production of hybrids relies on hormone induction and strip 

spawning of the channel catfish females. The female channel catfish are artificially inseminated with 

blue catfish sperm. 

Despite the labor intensive and additional costs of producing hybrid fry, hybrid catfish have several 

distinct advantages over channel catfish. The production cycle to grow a foodsize fish is shorter, 266 days 

compared to 403, production is 30% higher, survival rates are 19% higher, and fillet yield is 25% higher. In 

addition, growth rates are more uniform in hybrids. Hybrids are much easier to catch than channel 

catfish reducing the time and labor cost of harvest. However, diseases, water quality, and off-flavors still 

present problems for hybrids. 
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Researchers continue to work on developing better blue catfish and channel catfish strains. Currently 

about 40% of catfish production is hybrid catfish. 

3.4.2. Management practices 

An important finding of the 2010 NAHMS/APHIS study is the significant variation in production practices. 

These differences highlight the challenges when considering crop insurance. 

Pond systems 

There is considerable variation in the average pond size and depth. 

There are three types of ponds used in catfish farming, levee or embankment ponds, watershed ponds, 

and hybrid ponds. A fourth type of pond, the split pond or intensive management system, is discussed 

separately. 

Levee ponds are built on flat lands by removing soil from the center of the pond and using that soil to 

create the levees. Levee ponds are made in uniform sizes and depths, and have square or rectangular 

shapes. Since levee ponds are manmade and located on flat land, they tend to be bigger on average than 

the other two types. Levee ponds are primarily located outside eastern Mississippi and Alabama. 

Watershed ponds are built using the natural terrain of hills and valleys, along with a dam to create a 

pond. Watershed ponds are common in western Alabama and some of eastern Mississippi. They have 

irregular shapes and depths. The third type of pond is a combination of the previous two types. Hybrid 

ponds make use of natural terrain but also have two or three artificially created embankments to enclose 

the remaining area. Hybrid ponds are built in regions with gently rolling topography like the Blackland 

Prairie of eastern Mississippi. 

The average size of production ponds is 10.8 acres. Pond depths vary from three feet in the levee ponds 

of the Delta region to nine or more feet at the deepest point of the ponds in western Alabama. As noted 

earlier, the eastern farms were much larger than the ones to the west of the main production states. In 

addition, farms in the east were primarily supplied with surface water, while those in the west were 

almost exclusively supplied by underground sources. 

Split ponds 

A relatively new method of production has emerged in the last few years called intensive management or 

split pond system. This new system is both a pond and management system whereas other pond and 

management systems can be mixed and matched. 

Existing ponds are converted into split ponds by the addition of a levee. The levee is placed so that the 

pond is split into an 80/20 ratio. Ducts and pumps are placed into the levee to facilitate water transfer 

between the two sections without allowing fish access to the other side. The fish are placed into the 

small 20% side of the pond. The larger side of the pond serves as the waste treatment section. Water is 

circulated from the section containing the fish into the larger section where it is naturally cleaned up 

before being pumped back to the fish side. This system allows for a much higher stocking densities 

ranging from 14,000 pounds per acre to 20,000 pounds per acre compared to the normal 4,000 to 7,000 

pounds for the other systems. However, a loss of power to the aerators would result in almost immediate 

fish losses. 
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This system also makes catching the fish much easier since the area to be seined is so much smaller. 

Since the fish are concentrated, there is both an advantage and a disadvantage concerning dissolved 

oxygen. Since the fish are so concentrated, oxygen demand is very high compared to the surface area. 

Water aeration is far more critical than in any of the other systems. However, the fish are concentrated 

so as long as the aerators are operating it is virtually impossible for any fish to inadvertently swim into 

oxygen-depleted water. 

Currently, this system is in the first stages of adoption. The first noted acreage of split ponds was in 

2010, with less than 200 acres in production. In 2013, almost 1,600 acres were reported to be using the 

split pond, with about 1,400 of that in Mississippi. 

Stocking density 

Stocking densities vary considerably, with 22% of the surface area stocked at less than 4,000 fish per acre, 

47% at 4,000 to 6,000 fish per acre, and 30% by more than 6,000 fish per acre. The average production is 

about 4,100 pounds of catfish per acre. The average size of fish sent to the processor is 1.7 pounds. 

Channel catfish are raised primarily in operations located in Mississippi and Arkansas. Hybrid catfish 

(male channel catfish crossed with female blue catfish) are grown mostly by Alabama producers. 

The hybrid lines were more likely to be grown by those culturing catfish on a larger scale. Hybrid catfish 

lines produce more fish per acre of water than do normal channel catfish. Consequently, they represent 

fewer acres of water but a higher portion of production. 

The bulk of production is undertaken in continuous multi-batch production – 76% added fingerlings to 

ponds that were already populated with fish at various stages of growth. Single batch, ‘all-in all-out’ 

production systems allow for more precision with management decisions, although multi-batch systems do 

enable exploitation of available carrying capacity. 

There are regional differences in which system of production is employed. Alabama farmers were early 

adopters of hybrid catfish. In addition, Hybrids tend to grow better in multibatch systems, again Alabama 

farmers were early adopters. That landscape has changed somewhat as more farmers in Mississippi are 

adopting hybrid lines and switching to multibatch systems. In addition, Mississippi ponds are ideally 

suited for conversion to split ponds or intensive production systems. 

Almost 50% of food-size fish operations stocked at least one additional fish species in addition to catfish in 

the catfish production ponds. The most popular were (threadfin shad, a natural food item for catfish and 

a phytoplankton grazer, and grass carp, an herbivore used primarily to control aquatic weeds). There 

were few differences in this practice between different sized farms. 

Length of production cycle 

Depending on the species, environmental conditions, and pond system (channel or hybrid) it takes 

between 18-36 months to raise catfish, starting from an egg and growing all the way to a food-size fish. 

This holds regardless of the production system. 

Seasonality 

Catfish feed and grow the most when it is warmest, when water temperatures range from 70-85 degrees 

Fahrenheit. Below 70 degrees, they eat less and less frequently, and below water temperatures of 50 

degrees, they stop feeding altogether. 
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Broadly speaking, feeding season picks up in April and May and peak feeding occurs in July and August. By 

December, feeding drops substantially. During the winter months (December-March), feeding is minimal, 

and takes place when the water temperatures rise above 50 degrees. 

Feed conversion ratio 

The feed conversion ratio for catfish ranges between 1.9 and 2.4, with an average ratio of about 2.2 

according to the NAHMS 2010 Aquaculture survey. The feed conversion ratio (FCR) changes over the 

lifecycle of the fish. When the fish is at the fingerling stage the FCR is about 1.5, meaning it takes 1.5 

pounds of feed to make one pound of fish. As the fish grows older the FCR moves up, meaning, it takes 

more feed to make one pound of fish. In addition, other factors such as stress, disease, and 

environmental conditions can cause the FCR to rise. Since catfish are grown to 1.5 to 2.5 pounds, the 

total feed required to grow each foodsize catfish ranges somewhere between 3.5 and 6 pounds. Several 

knowledgeable people indicated that an average of 5 pounds for each fish to be a reasonable estimate. 

Feeding practices 

During the catfish lifecycle, there are a number of feed formulations that may be used, depending on the 

age and size of the fish. Newly hatched fry are not always fed a manufactured feed. Fry feed is usually 

used as a supplement to the natural food available in a nursery pond. Fry feed is formulated to provide 

50% protein and may be only fed to the young fry for only several weeks. Once the catfish reach the large 

fingerling stage, they may be fed a 36% protein feed. Again, this period is brief, only lasting a few weeks. 

Apart from fry and fingerling feed, there are two primary types of feed farmers use to grow catfish, one is 

a 32% protein feed, and the other is a 28% protein feed. The choice of which feed to use is determined by 

the farmer. Many farmers use the cheaper 28% feed but some larger operations use 32% feed extensively. 

The choice of which feed to use is also dictated by the age and weight of the fish. Newly introduced 

fingerlings are often fed 32% feed for several months. The fingerlings grow faster on 32% feed than on 

28% feed. However, as the fish grows bigger the advantage of 32% feed declines. Studies have shown 

that once a fish reaches a certain size it grows at very near the same rate whether fed 32% or 28% feed. 

Since 28% feed is cheaper farmers may switch to the cheaper feed. This is particularly relevant in single 

batch or modular production systems; however, in multibatch systems 32% feed may be used more since 

there are several age cohorts cohabitating. 

There are different approaches to feeding catfish. Farmers may feed: 

 every day to satiation (18%), 

 every day but to a maximum limit (12%), 

 on alternate days to satiation (38%), 

 on alternate days to a maximum limit (21%). 

According to the HAHMS 2010 Aquaculture survey, 57.3% of operations used 28% protein feed and 40.4% of 

farms used 32% protein feed. A small percentage, 0.8%, used 35% feed and the remaining 1.5% used an 

unspecified ration. 

The exact feed composition depends of the price of each ingredient. Feed manufacturers use linear 

programs to determine the appropriate combination of ingredients that will produce the most 

nutritionally sound food for the lowest price. The range of possible ingredients includes plant proteins 

like soybean meal, cottonseed meal, DDGS, CGFM, and wheat middlings. Formulators also may include 

animal proteins such as meat and bone meal, porcine meal and poultry feather meal. Menhaden fishmeal 

is rarely used anymore due to high market prices. Feed manufacturers also add minute amounts (> 1% 
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total composition) of lysine, vitamin and mineral premixes, and phosphates. A very small amount of 

vegetable oil is sprayed on to the pellets in order to keep dust down which can reduce water quality. 

Harvest 

Farmers harvest the fish once they reach the size agreed to with the processor. This is usually between 

1.5-2 pounds per fish. Prior to harvest farmers have to do several things. The first step is to check the 

health of the fish. Although no fish diseases can harm humans, a large proportion of severely infected 

fish may not survive the harvest and transport process. If a small proportion of fish have minor symptoms 

of a disease, the decision can be made to accelerate harvest to prevent the spread of the disease. This 

can minimize disease related losses to the farmer. 

The next step is to schedule the delivery. Samples are sent to the processor to check flavor quality. If 

the fish are on-flavor, scheduling process can begin. In addition, farmers sometimes have to deal with 

off-flavors in their harvest due to algae, or off color due to too much corn or DDGS in the fish diet. 

Typically, during the summer farmers can simply delay harvest until the algae problem has been fixed, 

however during the winter fish do not feed much, if at all, so the off flavors do not pass out of the fish in 

a timely manner. Another issue is off-color. Corn and corn-byproducts tend to give the fish a yellow 

cast. Off-color issues cannot be ameliorated except by feeding a ration lower in corn. 

The processors and farmers work together to schedule deliveries so that each batch of arriving fish can be 

processed within minutes of offloading. In order to schedule a delivery, processors must take into 

consideration, transportation distance, other deliveries, processing capacity, size of the delivery, and 

availability of the size fish required to meet client needs. 

Certain conditions need to be met before harvest can begin. Water quality, dissolved oxygen, 

temperature, and other stressful conditions can cause mortality during the handling and transport. In 

order for the fish to arrive at the processor alive, farmers take extra care to maintain good water quality 

in the weeks leading up to harvest. 

Farmers quit feeding the catfish 2 to 3 days before harvest. This allows the fish to fully digest any food 

and eliminate it. Fish with food still in their gut may grade poorly, regurgitate during transport, and do 

not handle transport stress as well. Processors will deduct a percentage off the price if fish have too 

much food in their belly. 

Levee pond harvest 

The basic harvest operation involves seining the pond with a sein net, a seine reel, a live car or sock net, 

a small motor boat, two tractors, and at least five people. An additional tractor with an aerator is also 

highly recommended to provide adequate oxygen once the fish are in the live car or sock. 

While concept of seining is simple, it does require a great deal of coordination of a large number of 

moving pieces. Two people operate the tractors pulling the net, two are in the water keeping the net on 

the bottom, and one person operates the boat to detect problems with the net catching too much mud. 

One person may be operating the reel and a sixth person may be needed to operate the aerator. With a 

tractor and one person on the levee on either side of the pond, they start at one end of the pond and 

slowly pull the net the length of the pond. Once they reach the other end, the tractors converge to close 

the net so that the fish can be graded and loaded into the sock or live car. Harvest of all the foodsize fish 

in a pond usually involves the seining process several times. At best, the first seining operation will only 

capture about 70% of the catfish. 
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Watershed pond harvest 

Watershed ponds with relatively flat bottoms can be harvested like levee ponds. However, deeper or 

steeply sloped watershed ponds must be harvested different ways. Because watershed ponds are more 

irregularly shaped, there is no standard method for harvest. Draining water is frequently employed to 

reduce the size of the pond in order to make seining easier. Due to the steep sides of many watershed 

ponds, it may not be possible to use mechanical equipment. Sometimes seining is done by hand. The 

particulars depend on the terrain, pond shape, pond depth, slope, ground firmness, and other factors. 

Each watershed pond has its own peculiarities and it is up to the farmer to decide the best harvest 

method. 

Once the fish are harvested, they are immediately loaded onto trucks and transported to the processor. 

To maximize transportation efficiency, trucks are typically loaded at or near capacity, which is 20,000-

25,000 pounds. Processing of the catfish occurs generally within several hours of harvest. Transportation 

to the processing facility accounts for almost all that time delay. Once the trucks arrive at the processing 

facility, the fish are processed immediately. 

Key factors affecting success 

Critical to success in catfish production is maintaining appropriate dissolved oxygen levels in the water 

and ensuring water quality. Disease management is also important; operator experience has been 

estimated to play a significant role in managing disease on catfish farms. 

On the financial side, the industry has been repeatedly subject to cost squeezes, where there is a) market 

pressure on prices due to competition from imports and/or b) increases in feed costs. At times when both 

have occurred, even efficient, soundly managed catfish operations can become unprofitable. 

3.5. Environmental Adaptation 

Catfish are grown in hypertrophic ponds with dynamic environments, in depth of the pond and daily or 

seasonal variations. These variations can directly, and indirectly, affect catfish survival and growth rate. 

Some variations increase production. Some stress the catfish and decrease production, but are not 

necessarily detrimental to the fish. Some of the effects, such as prolonged high stress environments, are 

detrimental to the survival of the fish. 

Stress on catfish negatively influences its ability to adapt to changing environmental conditions and can 

lead to disease and fish loss if prolonged. Contributors to stress include: 

 Dissolved oxygen (see 3.7.2 Natural resource requirements) 

 Water temperature (see Production system – channel catfish) 

 Water pH changes (see Growing Requirements) 

 Nutrition (see Production system – channel catfish) 

 Feeding practices (see Production system – channel catfish) 

 Handling (see Production system – channel catfish) 

 Chemicals (see Chemical usage) 

 Water quality (see 3.7.2 Natural resource requirements) 

Physiological responses to stress are an adaptation that allows the fish to restore homeostasis, at least in 

the short term. Primary responses to stress serve to mobilize the energy reserves, fat deposits, and 

include increased heartrate, increased gill blood flow. The level of stress is important but the length of 

the cause of the stress is also important. Secondary stress responses occur with high stress levels over the 
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short term and prolonged low levels of stress. Secondary responses to stress include immunosuppression 

and osmoregulatory imbalance. Secondary responses can be deleterious if left too long, eventually 

causing death. 

The effects of stressors on catfish are temperature dependent; as the temperature falls, the slower and 

less intense the response. The recovery period from stress depends on water temperature, the 

particulars of the stressor, the level of stress, and physiology of the fish. Full recovery in the absence of 

the stressor generally takes 1 to 4 days. 

In aquaculture ponds, catfish are routinely exposed for relatively brief periods to low dissolved oxygen. 

However, these frequent periods of low oxygen are unlikely to have any deleterious effects, although they 

do produce a primary response. Recovery is very rapid, measured in minutes, once oxygen levels are 

raised. 

A major indirect effect of stress response is immunosuppression. Immunosuppression lowers the 

resistance to diseases. Disease outbreaks can severely affect the thin profit margin of a catfish farm. 

Disease outbreaks have occurred due to the indirect response to hypoxia, high nitrates, and net 

confinement. 

3.6. Catfish species 

3.6.1. Agronomic Classifications 

Catfishes (order Siluriformes, family Ictaluridae) are named for their unmistakable barbels, which strongly 

resemble a cat’s whiskers. Catfish have lived on all continents, except Antarctica, at one time or 

another. More than half of all catfish species live in the Americas but only one family is indigenous to the 

US, Ictalurus. There are 2 main types of food catfish grown in the US, channel catfish (Ictalurus 

Punctatus), and hybrid catfish, a crossbreed of blue catfish (Ictalurus Furcatus) and channel catfish. 

3.6.2. Varieties 

Channel catfish and hybrid catfish are the two types farmed in the US. Channel catfish is the most 

commonly farm raised catfish in the US. It grows fast, is easy to spawn, is tolerant to a wide range of 

temperature and water quality, and has a flavor consumers like. However, channel catfish have some 

traits that reduce production efficiency; non-uniform growth rates, they are adept at avoiding the seining 

nets, and they are susceptible to disease. 

From the 1960s to the mid-2000s, virtually all US production was channel catfish. Recently however, the 

USDA Agricultural Research Service assisted farmers with the development of a hybrid variety of catfish in 

order to improve production efficiency. Female channel catfish were bred with male blue catfish to 

produce a hybrid with better farming characteristics. The resulting hybrid grows at a uniform rate, is 

more disease resistant, more tolerant of stressors, easier to catch, and has better processing yields. 

Commercial production of these hybrids began in the mid-2000s. Many farmers in Alabama have switched 

to producing hybrid catfish. Adoption has been much slower in the other major production regions. 

Hybrid production was about 20% of the total catfish production in 2011, though this has undoubtedly 

increased to about 40% presently. 

3.7. Growing Requirements 

Catfish can tolerate a wide variety of growing conditions. Optimum water temperature is 75° to 85°F but 

fish can survive from just above freezing and up to 100°F. For each 18° of temperature change from the 

optimum temperature, the metabolic rate halves or doubles. Catfish quit growing and feeding at about 
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50°F. Catfish can thrive in both fresh and mildly brackish water. Fully-grown catfish can tolerate water 

salinity from 0 to 11 parts per thousand (ppt). However, they prefer salinity below 4 ppt. Eggs will hatch 

in salinity at 8ppt or less but can survive in salinity as high as 16ppt. 

The optimum pH for catfish ponds is a relatively neutral pH, 6.5 to 8.5, though catfish can handle a range 

of 6.0 to 9.5 without being unduly stressed. Although catfish can readily handle a 1-unit pH change, a 2-

unit pH change should only take place over at least half an hour. 

While catfish generally prefer clear water, they do just as well in muddy and turbid waters. In clear 

water, catfish use their eyes to locate food. In turbid and muddy waters, catfish locate food using their 

sense of taste. Catfish in the wild live off a variety of natural foods including plants and animals. Catfish 

generally feed near the bottom but may also feed near or on the surface. Catfish will eat aquatic insects, 

snails, crawfish, green algae, aquatic plants, seeds, and smaller fish. Catfish will also feed on terrestrial 

insects when they are available. There are also reports of catfish eating small birds. In an aquaculture 

farming operation, catfish are well adapted to eating many different feeds manufactured from a wide 

variety of feedstocks. 

3.7.1. Rotation and isolation requirements 

Water quality in nursery ponds 

Nursery ponds where fry are grown to fingerling size are managed a little differently than growout ponds. 

The catfish fry are especially vulnerable to water quality, disease, predation etc. Nursery ponds are 

drained and refilled for each new batch of fry stocked. This ensures very high water quality when the fry 

are the most vulnerable. As time passes, the water quality degrades to the point that it is essentially the 

same as growout ponds by the time the fingerlings are ready to be switched to growout ponds. This 

ensures a relatively similar environment between the nursery pond and the growout pond and reduces the 

stress of entering a new environment. 

Aeration is more important for fry and fingerlings than for larger fish. Fry and fingerlings consume more 

oxygen per pound of body weight than a larger fish. In addition, they are weak swimmers. They cannot 

swim through oxygen-depleted waters to reach the safe haven of oxygenated waters near an aerator. 

Nursery ponds have greater aeration needs than growout ponds. Farmers with nursery ponds use more 

ponds of smaller size with intensive aeration to ensure the greatest number of fry surviving to the 

fingerling stage. 

Catfish fry are also extremely vulnerable to diseases. Infectious diseases can rapidly decimate a nursery 

pond. Smaller ponds also serve to break up the fry batches into smaller groups so that disease in one 

pond does not wipe out a large portion or the entire fry population in a nursery pond. Additionally, 

smaller ponds are easier to treat for infectious diseases. 

3.7.2. Natural resource requirements 

Of all the natural environmental conditions affecting catfish, water quality is the most important. Water 

quality depends on the amount of dissolved oxygen, ammonia, carbon dioxide, and nitrates in the water. 

When a pond is initially filled, the water quality is usually very good. However, over time, the quality 

deteriorates. A possible by-product of poor water quality is the presence of off-flavors in catfish. 

Almost all water quality issues can be traced back to the feed. When the feed is spread on the water, 

some of it is not eaten and dissolves into the water and gets broken down by algae and plants. Feed that 

is dissolved into the water contributes to overgrowth of algae, which in turn causes an increase in nitrates 
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and ammonia levels. Algae overgrowths also consume oxygen, further reducing water quality. In addition, 

some of the food that is eaten becomes waste. 

Ammonia 

Ammonia is the major byproduct produced in fish waste. Ammonia decays naturally. Higher 

accumulations cause a decrease in fish feeding activity, which in turn reduces ammonia buildup, thus the 

problem is self-correcting. Very few cases of ammonia intoxication have ever been recorded; however, 

ammonia levels can be used to predict the onset of nitrite accumulations as discussed later. 

Carbon dioxide 

The combined respiration of all the organisms living in a pond serve to deplete the oxygen levels while 

simultaneously increasing the carbon dioxide levels. Carbon dioxide levels are not usually measured by 

farmers. 

Nitrites 

Nitrite toxicosis or brown blood disease can be deadly to fish. Even low levels of nitrites can cause 

toxicosis. Ammonia from uneaten food, fish waste, and organic matter is oxidized into nitrites by 

bacteria called Nitrosomonas. Nitrites are further oxidized by bacteria called Nitrobacter into nitrates, 

which has a low toxicity for fish. The breakdown of nitrates occurs naturally by aquatic plant uptake. 

The rate of this final step depends on environmental conditions. The factors affecting the nitrification 

rates include ammonia concentration, temperature and dissolved oxygen. High levels of ammonia by 

themselves do not lead to excess nitrites; ammonia levels tend to self-correct quickly so that no problems 

ever present. The problem with excess nitrites occurs when excess ammonia and one or more factors 

that slow the rate of decay of nitrites into nitrates occur simultaneously. 

Nitrite toxicosis in early aquaculture in the US caused severe losses; however, this occurrence is very rare 

now. A simple monitoring program can easily detect when levels get a high. Monitoring ammonia levels 

can predict the onset of excessive nitrites. Remedial action is accomplished by spreading common table 

salt on the pond. Fish losses due to nitrite toxicity are now the consequences of lax management. 

Oxygen management 

The last factor in water quality is dissolved oxygen. This is the single most important part of water 

quality especially during the summer nights when oxygen demand is high and absorption is very low. 

Like all animals, fish need oxygen to survive. Aeration is the single most important management activity 

related to growing catfish. Ensuring that the catfish have enough dissolved oxygen in the pond is time 

consuming and labor intensive. The amount of dissolved oxygen becomes a limiting factor due to the 

respiration of fish, phytoplankton, and mud dwelling organisms. Combined, these can place a demand on 

oxygen greater than the water surface interaction can replace. Aeration is needed to increase the waterair interaction to facilitate greater oxygen absorption. 

Chemical usage 

Chemicals are discouraged unless there are no alternatives (lack of chemical contamination is one of the 

key selling points of aquaculture). Chemicals may ultimately be required for a number of reasons, 

however, from disease or algae control, to managing water quality, to eliminating undesirable fish, 

insects, or weeds, or even to sterilize a pond. 
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3.8. Diseases, pests, and mortality 

Unlike most other agricultural products, it is virtually impossible to account for losses in aquaculture. 

Cattle, sheep, and pigs are easy to count, not so with catfish. 

A farmer only knows approximately many fry he put into the pond the first time after it was filled. 

Additionally, there is no way to count losses, small fry may never appear on the surface, older fish may 

die and be eaten, cannibalism is known to occur, no one counts the dead fish, fish can evade nets, and 

loss to avian predation is impossible to count. Some farmers attempt to compensate for unobserved 

losses by adding fingerlings into their growout ponds. They restock the observed losses plus some 

unknown additional amount to offset the unobserved losses. This further exacerbates the inventory 

inaccuracies. 

This inventory counting issue was one of the major obstacles identified to insuring several aquaculture 

species studied under the National Risk Management Feasibility Program for Aquaculture (NRMFPA). 

Although many hours were poured into finding a solution it was evident that the current technology and 

production practices could not account for pond inventory or losses Researchers in that program 

concluded that in order to develop an actuarially sound program, the ability to count inventory and losses 

would need to be solved along with several other issues. 

Researchers continue to research disease controls, management systems, pond systems, and other 

technologies that may solve the inventory counting problem in the future. 

Catfish can die or be lost for many reasons. 

 Death due to a wide range of diseases, many factors including, poor water quality, 

inadequate nutrition, or what is sometimes called 'trade mortality'; in other words weaker 

fish just dying earlier in their life cycle than others in the population. 

 Death may be due to predation from birds, terrestrial mammals, or reptiles, such as snakes. 

Where determined predators are present, only partial protection or deterrence is possible in 

some systems and predation is a significant problem. 

A few measures are available to deal with predatory birds. However, they are either 

insufficiently effective, or too expensive. Some ponds have lines across them to discourage 

birds from landing; in other cases, human teams have been used to scare the birds away. 

Nets are not used – they are simply not feasible from a management or economic standpoint 

due to pond operations and/or pond size - ponds in most cases are too large (several acres in 

size). 

 Losses may result from severe weather and subsequent impacts. Severe weather and 

resulting floods may wash out all or part of a containment structure. Some larger fish are 

susceptible to death from lightning strikes. 

 Cannibalism, which is not thought to occur in most farmed fish if they are all about the same 

size and well fed, may be more common than often assumed, especially if there are a wide 

variety of sizes. The latter can occur when a fish population has not been well graded, or 

where some pond systems are never fully fallowed between harvests, therefore allowing 

some larger fish to remain. 

 Deliberate culling of weak or 'poor doing' fish' may also be part of the management strategy. 
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 Human error in operating the equipment and facilities may cause mortality e.g. failure to 

properly aerate the ponds. 

 Handling stress 

The most common diseases, rate of occurrence and treatment are shown in the following table. 

Table 5: Percent of catfish operations that lost any food size fish to the following causes in 

2009.

Disease name Cause Occurrence

ESC (Enteric Septicemia) E. ictaluri 36.6%

Columnaris F. columnaris 39.0%

Winter kill 20.6%

Anemia 7.9%

Proliferative Gill Disease (PGD) H. ictaluri 13.6%

Visceral toxicosis (VCT) Clostridium botulinum type E 5.2%

Trematodes B. damnificus 3.7%

Ich (white spot disease) 4.9%

Predation (avian or other) 53.9%

Low dissolved oxygen 28.1%

Other 9.3%

 Source: USDA APHIS National Animal Health Monitoring System 

ESC is the disease that causes the most mortality in commercial catfish ponds. A vaccine was developed 

in 2008. The vaccine is currently undergoing dosage and efficacy trial verification. 

3.8.1. Pests 

Bird predation is identified as one of the more serious threats to catfish farms. The high density of fish 

on catfish farms makes them attractive to birds such as cormorants and pelicans. The impact on farms is 

varies significantly, but some producers can be heavily affected. Estimates in the 1990s suggested that 

bird control costs for the industry were $2 million, with losses around $5 million. 

Insect predation is only a problem with recently hatched catfish fry for the first 3 to 6 weeks of age. Only 

two types of insects prey on catfish fry, though the newly hatched fry are extremely vulnerable to 

predation. Air-breathing insects such as backswimmers or gill breathing insects such as dragonfly naiads 

prey on fry. 

3.8.2. Diseases 

In the beginning of commercial catfish aquaculture, lower stocking densities impeded disease 

transmission. However as stocking densities rose so did the incidence of disease. The increased disease 

transmission rate in a densely stocked pond is the primary limiting factor in catfish production. Disease 

outbreaks are common, even on the best-managed farms. 

About 45% of fingerling loss is attributable to disease. Numbers on losses in the growout ponds are harder 

to come by since it is impossible to accurately count inventory and because of poor record keeping and 

under reporting. Infectious diseases are estimated to cost farmers millions of dollars per year. Effective 

disease management consists of identifying a problem, diagnosis of the disease or diseases, and corrective 

treatment. Compounding the problem is that multiple infectious diseases can occur simultaneously. This 

complicates corrective actions. 
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3.8.3. Mortality 

Fish losses happen throughout the production cycle; however, the majority of losses occur in hatching, 

and at the fry and fingerling stages. Smaller fish are more susceptible to diseases, predation, 

cannibalism, and water quality than larger fish. The overall survival rate from egg to foodsize catfish is 

about 45%. The Alabama Fish Farming Center suggests that fish losses in growout ponds are 10 to 20% 

annually. Some losses in current operations are beyond the farmers’ control. Fish loss due to predation 

simply cannot be controlled using current technology. The majority of losses, other than the survival rate 

of small fish, come from oxygen depletion. Catastrophic losses are rare with the advent of oxygen 

management and aeration technology. 

3.8.4. Perils 

Most perils that result in losses can be influenced by management. The three most common perils 

reported by farmers in the NAHMS catfish survey are predation, low dissolved oxygen and disease. Low 

dissolved oxygen levels are frequently caused by other factors that are influenced by management (such 

as stocking intensity, feeding procedures, water quality treatment, etc.) and by natural conditions 

(weather, water source quality, etc.). 

In 2009, 54% of catfish producers lost food-size fish to predation. The larger farmers experienced 

significantly more predation than the smaller operations. Low dissolved oxygen was identified by 28% of 

operations. Again, this peril was three times more common in the largest ponds compared to the smallest 

ponds. The three most common diseases were columnaris (affecting 39% of operations), enteric 

septicemia of catfish (ESC – resulting from eswardsiella ictaluri infection and affecting 37% of operations) 

and winter kill (a fungus affecting 21% of operations). 

Farmers reported that roughly 12% of ponds had major mortality events (defined as 5% or more of 

mortality loss over a period of two weeks) in 2009. The average losses were roughly 4,500 pounds per 

acre on average. Ponds with no major losses produced 1,000 pounds more catfish per acre than those 

with losses. 

Producers reported 43% of ponds suffered losses from predation, 14% from ESC, 14% from columnaris, 7% 

from winterkill, 3% from proliferative gill disease, 1.8% from anemia, 1.7% from visceral toxicosis of 

catfish, 1% from trematodes and 1% from ich. 4.5% of ponds suffered from losses classified as ‘other‘ and 

9.5% reported losses because of low dissolved oxygen. Each of these loss events were identified as, light, 

moderate, or severe. The causes of loss with the greatest proportion of severe losses were trematodes 

(27%) anemia (26%) columnaris and proliferative gill disease (both with 11%). However, 23% reported 

severe losses because of low dissolved oxygen and 53% because of other causes of loss. More than two 

thirds of these ‘other’ losses that were severe were reported to be because of Aeromonas bacteria.

Management action can reduce the incidence of predator damage, although this can be expensive for 

large ponds and is rarely entirely effective. 

Sound management is the first line of defense. The less stress put on the fish the better. Stress and poor 

water quality greatly increase the risk of disease. To prevent disease on farms, producers have multiple 

tools. First, they can maintain ideal stocking densities and water conditions and second they can 

vaccinate or purchase vaccinated fingerlings (against columnaris and eswardsiella). 

Dissolved oxygen levels can be monitored and in many cases are. In 2009, all operations with 50 acres or 

more monitored the levels of dissolved oxygen in their ponds. Methods varied, but included automated 
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sensors and hand monitors. Only roughly 50% of the farms with less than 20 acres regularly tested the 

dissolved oxygen levels. However, the lower stocking density at smaller farms reduces the risks of low 

levels of dissolved oxygen. If the dissolved oxygen level does drop below recommended levels then 

aeration can be used to increase the levels of dissolved oxygen. Additionally,the NAHMS catfish survey 

reported that 17% of small operations had no aeration capability. 

There were differences in water treatment to maintain quality. For example, 30% did not use salt to 

modify chloride levels and 67% did not add calcium to modify alkalinity. One third of producers used no 

algae control treatments. Those that did, used copper sulfate, Diuron, or biological control (algae eating 

fish). Only 13% use any form of control of snails (a host of trematodes). Of course, this may not imply 

poor management as those not applying treatment may have adequate water quality. 

To avoid some leading diseases, producers can stock their pond with fingerlings that were vaccinated 

against columnaris and ESC (using FDA approved immersion vaccines at the fry stage). In 2009, 6.2% of 

food-size operations stocked ESC-vaccinated fish, which accounted for 4.9% of the total catfish, and only 

3.9% of operations stocked columnaris vaccinated fingerlings, which accounted for 2.7% of the catfish. 

Vaccinating fish does not completely remove the risk of infection. ESC outbreaks occurred on 47% of 

operations that contained food-size, vaccinated fish. Even though ESC still occurs on farms with 

vaccinated fish, 42% of producers believed the vaccinated fish had better survival rates than nonvaccinated fish, 21% thought they fared equally and 38% did not know. In addition, 13% thought that the 

vaccinated fish had a better growth rate; no one reported lower growth rates in vaccinated vs. nonvaccinated fish. 

The results for columnaris-vaccinated fish are similar. There were outbreaks on 59% of farms that had 

vaccinated fish. Outbreaks were also treated with medicated feed. Almost 50% of farmers that stocked 

vaccinated fish thought they had better survival rates, and 40% did not know if it was better or worse. 

Over 13% thought that the growth rate in vaccinated fish was better and no one reported worse growth 

rates. 

In addition to adjusting water quality, producers can use medicated feeds to fight bacterial infections. 

Only 8.2% of operations used any medicated feed as a treatment for bacterial diseases. The percentage 

was consistent for all operation sizes. There are three approved antibiotics: Romet, used by 50% of those 

using medicated feeds, Aquaflor used by 36% and Terramycin used by 26%. The larger operations used 

more Aquaflor. 
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4. MARKETING 

a) Pre-harvest prices 

The only information on preharvest prices comes from enterprise budgets last published in 2005. In 

addition, the most recent study conducted on the effects of quality and price correlations are more than 

ten years old. 

b) Describe how prices are determined; if contracted, provide copies. 

To determine the use of contracts we spoke with a couple of the larger processors. No one we spoke to 

reported using a standard contract. Instead, the only records are written agreements, and not all farmers 

and processors use them. In some cases, agreements were drafted by the farmers themselves. 

As described, catfish sales arrangements are often made in advance based on relationships and 

handshakes. Where written agreements are used, they are considered legally unenforceable. Their value 

– as described by processors – is that they serve as a reminder / confirmation of the handshake 

agreement. 

The processors we spoke with said they had never had to legally enforce an agreement. One large 

processor indicated that only about 10% of their processed volume was procured under a written 

agreement. 

Where they are used, agreements sometimes stipulate prices, as well as a premium for delivering all 

promised volume, and discounts for under- or oversized fish. 

Price discounts. During the listening session and phone conversations with processors, it was made clear 

that farmers suffer price reductions for things such as under- or oversized fish and off-flavors. Beyond 

that, no formal or standard price reductions are known. Since many of the processor and farmer 

agreements are conducted by handshakes and simple written agreements, it is likely that the price 

differentials are unique to each agreement. However, several people we have spoken with indicate the 

premium is about “a few cents” or “several cents per pound”.

c) Describe how catfish are utilized 

Catfish are processed into several different products. By far the most popular form is fresh or frozen 

fillets. Catfish are commonly processed the following ways, according to uscatfish.com: 

 Whole Dressed (fresh)

 Steaks (cross-section cuts from larger dressed fish, fresh or frozen) 

 Fillets (boned sides of the fish, cut lengthwise away from the backbone, fresh or frozen) 

 Regular and shank fillets (regular fillets have the belly section attached, shank fillets have the 

belly section removed, fresh or frozen) 

 Nuggets (boneless pieces cut from the belly section of the fillet, fresh or frozen) 

 Strips and fingers (smaller pieces of fish cut from fillets, fresh or frozen) 

In addition to cutting the fish into the products described above, some processors also produce further 

value-added products, such as convenient or “heat and eat” food. The most common value added 

processing is breading the fillets, strips, and nuggets for quick frying in restaurants or in the home. 
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US catfish has a well-defined niche market that is mainly confined to the Southern United States. Almost 

all US Catfish consumption occurs in the states where catfish is produced. Catfish is sold in regional 

supermarkets or may be offered in national chains with stores located in the Southern US. Additionally, 

many regional restaurants buy catfish directly from the processor, especially the fillets and value added 

products. 

Since it is a high quality, and relatively expensive, niche product, US farm-raised catfish may be offered 

at specialty food shops and mid- to high-end restaurants nationwide. However, most US residents outside 

the Southern states are unfamiliar with catfish. The decline of catfish production and its higher price 

than tilapia, swai, or pangasius limits the potential of targeting catfish to the average US consumer. 

d) Establish insurable interest of producer. By region, describe critical time periods to 

market and/or sign contracts 

Insurable interest. For regular crop insurance, a catfish farmer’s fish would be the insurable interest. In 

this case, however, the insurable interest for the purposes of gross margin insurance would be the catfish 

farmer’s own gross margin (i.e., the price received for catfish less the marginal costs of feeding and 

raising the fish). The assumption in this case is that the market gross margin (i.e., catfish market price 

less a standard market catfish feed price) is a reasonably proxy for the farmer’s own gross margin, since 

feed represents the largest component of the farmer’s marginal costs. 

Critical time periods / contract signing. Timing of catfish sales is no longer “lumpy”. In the early days of 

catfish aquaculture, farmers would stock ponds in a single batch, and then harvest all at the same time 

about 15-18 months later. Although farmers could stock half the ponds one year and the other half the 

next year, many farmers were harvesting in a narrow range of late fall around October and November. 

This created a glut in the market. Multiple batch systems allow greater freedom on timing since a new 

batch is ready every few weeks or months, and helps to prevent market gluts. In addition, processors can 

more efficiently use plant capacity by operating year round. 

Since more than 80% of farms use a multiple batch productions system, it makes sense that market timing 

of contracts is not as standardized in catfish as in other agriculture species. However, there is increased 

activity as the growing season begins. Farmers begin feeding fish around April and will be looking to book 

their feed deliveries for the year as early as December or January. Most of the single batch farmers are 

getting ready to stock fingerlings. Some of the multiple batch farmers will be buying fingerlings as well. 

The feed booking contract might be relevant as proof of intent to produce a certain amount of fish and 

could be required documentation as part of an insurance policy. 
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5. PROGRAM AVAILABILITY 

a) Identify statute changes required for RMA to provide coverage 

The type of catfish gross margin insurance program that the Farm Bill required be investigated appears to 

fit within RMA’s existing programs and policies. It would be similar to the LGM-Cattle, LGM-Swine, and 

LGM-Dairy policies. 

However, as it would be a new livestock policy, it would have to fit within the existing $20 million 

program cap. RMA has confirmed that all animals are included as livestock under the AGR, now the Whole 

Farm plan. Catfish margin would be included in the $20 million limit unless a legal review found 

otherwise. 

Given this limitation, any catfish policies sales would reduce funds available to the other existing policies. 

Since dairy policy sales use the bulk of the funds, any catfish policy sales would likely reduce funds that 

would have otherwise been used by dairy policy sales. 

We do not believe a change would need to be made in the statutory language to develop an LGM-Catfish 

policy. 

b) Identify regional & USDA grading standards 

Until recently, catfish processing has not been under the purview of the USDA like red meat and poultry 

processing. Recently Congress passed the requirements of fish inspection to the USDA. Draft rules have 

been published but no rules have been formalized or implemented yet. 

Catfish production and processing were subject to oversight from various agencies prior to the recent 

change. Processing operations were under Good Manufacturing Practice Code of Federal Regulations title 

21, Part 110 of the Food and Drug Administration (FDA). Other than that, no other regulatory framework 

existed. However, the catfish processing industry voluntarily contracted with the National Marine 

Fisheries Service (NMFS) under NOAA to have their plants inspected. The primary impetus was to ensure 

unbiased standard grading standards and to ensure a high quality product and facility. The inspectors 

issue certificates verifying quality and the condition of the processed products. In turn, the processors 

must pay to have their facilities, procedures, and products certified. 

c) Identify grading agents and independence of agents 

Although the primary contractor is NMFS, the actual inspection is subcontracted to a Department of 

Commerce (USDC) inspector, or a cross-licensed State or USDA inspector. The inspectors inspect the 

product to determine whether the product is clean, safe, and properly labelled. They also inspect the 

plant, equipment, and handling procedures to establish that it meets established sanitation and hygiene 

standards. 

USDC also performs grading. Only products that have established grade standards can be graded. The 

processing industry, retailers, and consumers all rely on the grading standards. Contracted lots of 

product may be inspected to ensure it meets the contracted specifications of the buyer that requests the 

inspection. USDC also performs consultation services, assistance in specifications, development of labels 

and analytical tests. 

In 1988, The Catfish Institute in combination with the USDC and NMFS began a voluntary third party 

certification process. The goal was to promote quality catfish products. Processors can voluntarily elect 
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to meet the higher standards and receive certification and additional labelling stating it meets that 

standard. The catfish processing industry adopted Hazard Analysis Critical Control Point HACCP 

guidelines set forth by the FDA in 1994. The Catfish Institute requires these guidelines to be met by 

plants that elect certification in their program as a Certified Processor. 

d) Provide a copy of grading standards 

Grading standards are included with the appendices to this report. 

e) Describe alternative uses of reduced quality fish 

Off-flavor fish are particularly a problem in the mid to late summer months, although off-flavors can 

persist for 6 months. The presence of off-flavors in a crop typically means the farmer simply waits for the 

off-flavor to be eliminated before he harvests. A simple treatment can also be used to eliminate the offflavor in several weeks. However, treatment costs money. Unless the need for harvest is imminent, 

farmers will generally wait for the off-flavors to be eliminated naturally. 

Sometimes the processor needs fish to fill orders and the only fish available for harvest are off-flavor. In 

those cases, the processor may accept off-flavor fish. When off-flavor fish are accepted for processing, 

the farmer is paid a price, discounted several cents per pound. Off-flavor fish is processed normally into 

fresh and frozen products and value-added breaded products. 

f) Determine impact of Federal Marketing Order, if any, on insurance plan 

The catfish industry has considered, but not implemented, a federal marketing order under the 

Agricultural Marketing Agreement Act. 

Though there is no federal catfish marketing order, there are a couple of state programs raising funds for 

research and promotion: 

 The Arkansas Catfish Promotion Board collects a mandatory $1 fee per ton of catfish feed 

purchased by commercial Arkansas catfish producers. These funds are used for research and 

promotion. 

 Alabama catfish farmers have their own voluntary commercial fee assessment for research 

and marketing purposes. This was raised in early 2015 from $0.50 to $1 per ton of catfish 

feed sold. The new rate is projected to raise about $120,000 per year. The additional funds 

will help fund disease research on aeromonas, a bacterial pathogen that has substantially 

affected production in Alabama in recent years. 

Neither of these state assessments would impact an insurance plan, nor would we expect a federal 

marketing order to alter the viability of catfish insurance plans, as they would not alter operational nor 

market risks to producers. 
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6. A REVIEW OF LIVESTOCK PROTECTION PLANS 

6.1. Statutory language 

The Agricultural Risk Protect Act (ARPA) of 2000 instructed the Federal Crop Insurance Corporation (FCIC) 

to establish pilot livestock protection programs. 

The statutory language is as follows: 

‘‘SEC. 523. PILOT PROGRAMS.

‘‘(a) GENERAL PROVISIONS.—

‘‘(1) AUTHORITY.—Except as otherwise provided in this section, the 

Corporation may conduct a pilot program submitted to and approved 

by the Board under section 508(h), or that is developed under 

subsection (b) or section 522, to evaluate whether a proposal or new 

risk management tool tested by the pilot program is suitable for the 

marketplace and addresses the needs of producers of agricultural 

commodities. 

 ...

(b) LIVESTOCK PILOT PROGRAMS.—

‘‘(1) DEFINITION OF LIVESTOCK.—In this subsection, the term 

‘livestock’ includes, but is not limited to, cattle, sheep, swine, goats, 

and poultry. 

‘‘(2) PROGRAMS REQUIRED.—Subject to paragraph (7), the Corporation 

shall conduct two or more pilot programs to evaluate the effectiveness 

of risk management tools for livestock producers, including the use of 

futures and options contracts and policies and plans of insurance that 

protect the interests of livestock producers and that provide—

‘‘(A) livestock producers with reasonable protection from the financial 

risks of price or income fluctuations inherent in the production and 

marketing of livestock; or 

‘‘(B) protection for production losses.

...

‘‘(10) LIMITATION ON EXPENDITURES.—The Corporation shall conduct 

all livestock programs under this title so that, to the maximum extent 

practicable, all costs associated with conducting the livestock 

programs (other than research and development costs covered by 

section 522) are not expected to exceed the following: 

‘‘(A) $10,000,000 for each of fiscal years 2001 and 2002. 

‘‘(B) $15,000,000 for fiscal year 2003. 

‘‘(C) $20,000,000 for fiscal year 2004 and each subsequent fiscal year.3

Subsequently, RMA established both Livestock Gross Margin (LGM) programs for beef cattle, swine, and 

milk producers, as well as Livestock Risk Protection (LRP) programs for cattle, feeder cattle, swine, and 

lambs. 

 

3

Agricultural Risk Protection Act of 2000, Public Law 206-224. June 20, 2000, Sec 523(b)(2). 
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Here, we review the LGM programs as well as LRP-Lamb, which although not margin programs, have 

elements that are instructive for the catfish case. Additionally, the privately offered Dairy Margin 

Protection Program (Dairy-MPP) provided the basis and model for the catfish ration we used. 

6.2. Livestock gross margin (LGM) plans 

Livestock Gross Margin plans help farmers manage risk by insuring that the prices they receive for their 

production is adequate to cover their input costs. Typically, margin programs insure against losses for the 

most volatile variable costs. In the case of, animal production, feed costs are the largest and most 

volatile of the variable costs. 

6.2.1. LGM-Cattle 

The Livestock Gross Margin-Cattle policy is available in select states and covers the gross margin 

difference between the market value of livestock minus feeder cattle and feed costs. It uses futures 

prices to calculate expected gross margin and actual gross margin. 

Insurance sales are available 12 times per year and allow farmers to insure their targeted marketings (the 

maximum number of slaughter-ready cattle the producer will sell) for the 10-month period beginning one 

month after the sales closing date. Farmers can choose deductibles ranging from $0 dollars per head to 

$150 per head in $10 increments. The premium is due with the insurance application. 

Indemnities are based on market prices and not on prices received by the producer. LGM-Cattle does not 

insure against death, damage, or other loss. LGM-Cattle policies have had unsubsidized premiums. 

6.2.2. LGM-Swine 

The LGM-Swine policy provides protection against the loss of gross margin (again, the difference between 

the value of livestock and feed costs). LGM-Swine uses futures prices to determine expected gross margin 

and the actual gross margin. It is available to cover farrow-to-finish, feeder pig-finishing operations, and 

segregated early-weaned operations. Swine are assumed to be marketed at 260 pounds. The policy 

coverage includes assumptions regarding proportions of feed inputs for each of the different insurable 

operations. 

Insurance is available 12 times a year and covers the six-month period following sales closing, but 

coverage is only in effect beginning one month after sales closing, so five months are actually insured. 

The sales period begins as soon as RMA reviews data submitted by the developer after the close of 

markets on the last day of the price discovery period. The sales period ends at 8pm Central Time the 

following day (Saturday). 

For LGM, a producer may insure as many as 30,000 hogs per year with up to 15,000 hogs for any 6-month 

insurance period. There is a 3% surcharge added to the producer’s premium. The premium for LGM-swine 

is due at the end of the insurance period. 

Indemnities are based on market prices and not on prices received for animals. Farmers can choose 

deductibles ranging from $0 dollars per head to $20 per head into dollar increments. The premium 

subsidy is negligible — under 1% for 2014.
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6.2.3. LGM-Dairy 

The LGM-Dairy policy provides protection against the loss of the margin between milk market value and 

feed costs. It uses futures prices for corn, soybean meal, and class III milk to calculate the expected 

gross margin and the actual gross margin. 

Insurance sales are available 12 times per year and allow a farmer to insure all the milk they expect to 

sell over the 11-month insurance period, which includes the 11 months following sales closing. Coverage 

does not include the first month following sales closing, just the 10 months afterwards. 

Indemnities are based on market prices and not on actual milk prices received. Policies are capped at 

24,000,000 pounds of milk per year. The level of subsidy provided depends on the deductible amount 

chosen. 

LGM-Dairy does not insure against cattle death, production losses, changes in feed use, or multiple-year 

milk price declines or multiple year changes in feed costs. The policy premiums on average were 

subsidized 42.8% in 2014. This higher subsidy likely accounts for its much higher participatione. 

6.2.4. Usage of the LGM plans 

The cattle and swine LGM programs have had very limited participation to date. From 2012 to 2014, they 

sold approximately 30 and 140 policies per year, respectively. By contrast, the dairy LGM program has led 

to the full use of the LGM program funds for the last several years. 

Table 6: LGM insurance plans – policies, loss ratio, and subsidy by plan, 2012-2014

Year

2012 2013 2014

Cattle

Policies 29 33 39

Loss ratio 2.25 0.88 0.00

Subsidy (%) 0.0 0.0 0.0

Dairy cattle

Policies 1,769 1,697 1,621

Loss ratio 0.07 0.16 0.23

Subsidy (%) 46.3 45.4 42.8

Swine

Policies 140 142 142

Loss ratio 1.34 0.46 0.46

Subsidy (%) 3.9 1.0 0.7

Source: RMA

 

6.3. Other related plans 

In addition to the three LGM plans, we reviewed a couple of other insurance plans of interest to this 

particular investigation: Livestock Risk Protection policy for lamb (LRP-Lamb), and the Margin Protection 
Insurance Program Development for Catfish Margin Protection 

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Program (MPP) for milk. The LRP policy is provided by RMA; the MPP program is administered by the Farm 

Services Agency (FSA). 

6.3.1. Lamb Livestock Risk Protection 

The lamb Livestock Risk Protection program (LRP-Lamb) offered by RMA, available in select states, is 

designed to protect producers against market price declines. It can cover feeder or slaughter lambs that 

weigh between 50 and 150 pounds by the ending period. There is an annual limit of 28,000 head per 

producer per year (July 1 to June 30). 

The insurance period can be 13, 26, or 39 weeks in length. Coverage prices range from 80% to 95% of 

expected ending value. The premium is due when a specific coverage endorsement is applied for. 

Coverage begins when RMA approves the coverage endorsement purchase. 

LRP-Lamb was of interest and included in our analysis because it shares a similarity with catfish: lamb 

markets also lack a publically traded futures. The program instead uses a complex model to forecast 

future prices. The actual ending value is derived from data published by Agricultural Marketing Services. 

A formal evaluation of LRP-Lamb concluded that 

“... the model did not perform well in predicting prices, particularly in a market 

experiencing unusual changes in value. There is evidence that the model should not be 

expected to perform well out of sample over a sustained period, even with regular 

recalibrations. No model is likely to have access to the same volume of information 

about the lamb market that the potential insured growers will have on any given week 

and this information asymmetry gives rise to the potential for adverse selection. There 

is substantial evidence of adverse selection throughout the life of the program to date 

and there is no actuarially sound approach to adjusting rates for adverse selection... it 

is the overall finding of the contractor that the program should be terminated based on 

deficiencies and model approach and evidence of historical abuse the cannot be 

adequately addressed within the current construct.4

It is our understanding the LRP-Lamb policy was suspended during the evaluation but has been 

reestablished after program changes were made following the evaluation. 

The LRP-Lamb insurance policy summary for 2012-2014 is shown in the following table. 

Table 7: Lamb LRP insurance plan – policies, loss ratio, and subsidy %, 2012-2014

Year

2012 2013 2014

Lamb

Policies 362 394 284

Loss ratio 6.12 6.40 4.06

Subsidy (%) 13.0 25.3 34.9

Source: RMA

 

4

“Evaluation of the LRP Lamb Insurance Program”. RMA Order No. D12PD01589 (2012), pp. 84-85. 
Insurance Program Development for Catfish Margin Protection 

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For 2012-2014, loss ratios were high (6.12, 6.40, and 4.06) and the subsidy percentage has been 

increasing, reaching 34.9% in 2014. Following a formal evaluation of the program, LRP-Lamb sales were 

suspended on February 5, 2014. Changes were then made to the plan - including the adoption of a new 

price prediction model – and sales were allowed to resume on May 4, 2015. RMA shows sales of 30 LRPLamb policies for FY 2015. 

6.3.2. Dairy Margin Protection Program (MPP) 

The Dairy MPP plan, administered by the Farm Service Agency (FSA), offers catastrophic coverage for a 

$100 fee. It is not rated using actuarial standards and consequently has the character of a revenue 

support policy rather than a crop insurance plan. It provides coverage of a $4 per hundredweight (cwt) 

margin at 90 percent of the largest production year out of the producer’s previous three-year history. It 

also offers different levels of buy-up coverage to guarantee margins up to $8 per hundredweight. 

We included the Dairy-MPP because it has some characteristics that can be adapted to a catfish margin 

program. One of the specific margin plans for animals called an “Income Over Feed Costs” plan. IOFC 

plans insure that feed costs are covered by the revenue generated. The other costs associated with 

catfish farming are relatively stable, while feed costs are highly volatile. RMA has identified the IOFC 

model as way to insure catfish farmers and stipulated so in the statement of work for this project. The 

feed ration methodology in the Dairy-MPP serves as the basis of the feed ration model for catfish in this 

report. 

6.4. Comparison of current LGM and LRP products 

This section discusses the insurance experience for both the LGM and LRP programs. A major change to 

the program was the addition of a 28% premium subsidy for Dairy Cattle in 2011. As mentioned previously 

the LRP program has a 13% premium subsidy and LGM (excluding Dairy Cattle) has a 3% premium 

surcharge. Since 2011, Cattle-Dairy has comprised most of the insured liability for the program, and it is 

our understanding that it depletes the $20 million administrative cap on an annual basis. 

 
Insurance Program Development for Catfish Margin Protection 

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Figure 12: LGM and LRP policies earning premium, all species 

Source: USDA RMA 

Policies earning premium for LGM – Dairy increased significantly in 2011 when the 28% subsidy was added. 

Policies earning premium for LRP-Cattle have fluctuated between roughly 500 and 2,000 annually 

throughout the history of the program. The LRP-Lamb product was withdrawn during 2014 following an 

RMA commissioned study, but it is now available again. 

The next chart displays the loss ratio (Indemnity divided by Premium) for the LGM and LRP plans by year. 

Overall, the loss ratio is 62% for the 2003-2015 years (although more indemnities may be payable in 2015). 

The LRP-Lamb product had very high loss ratios in most years. The recent evaluation of the Lamb LRP 

explains the higher participation and loss ratios for LRP-Lamb are due to asymmetrical market knowledge 

by the producer. The higher participation is due to the fact that, unlike the other commodities insured 

under LRP and LGM there is no futures market for lamb. This creates a situation where the producer has 

greater market knowledge and the poor ability of the forecast model to predict prices creates an 

imbalance producers can exploit. The overall loss ratio for LGM-Dairy has been only 6%; however, it has 

been the most popular product by far. 

 

 -

 500

 1,000

 1,500

 2,000

 2,500

 3,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Policies Earning Premium

LGM - SWINE LRP - SWINE LGM - Cattle LRP - Cattle LRP - Lamb LGM - Dairy
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Figure 13: Loss ratios, all species, LRP & LGM 

Source: USDA RMA 
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6.5. A summary of plans, needs, and data sources 

We reviewed existing livestock policies to help determine the most appropriate approach to developing a 

catfish margin program. The following table identifies the basic characteristics, information 

requirements and sources, and approach used for the existing LGM and related animal policies - and how 

a potential one for catfish fits by comparison. 

Table 8: Summary of livestock insurance plans 

Information 

needed

Data and source Challenges Time horizon 

to rate

Lessons from the 

model

Cattle 

LGM

Income Over Feed Cost 

(IOFC) margin 

determined by 

 Beef futures market

 Feed futures market 

 CME Group (Chicago 

Mercantile Exchange 

and Chicago Board of 

Trade) futures 

markets for live 

cattle, feeder cattle, 

and feed

 Futures markets 

have minor errors 

that grow over the 

time horizon

11 months 

rolling 1 month 

periods

Futures markets are more 

accurate in the short term 

and less so long term, but 

still accurate enough to 

rate out to a year.

Swine 

LGM

IOFC margin 

determined by 

 Swine futures 

market

 Feed futures market 

 CME futures markets 

for swine and feed

 Futures markets 

have minor errors 

that grow over the 

time horizon

6 month rolling 

periods, 12 

periods/year

Futures markets are more 

accurate in the short term 

and less so long term, but 

still accurate enough to 

rate out to a year.

Dairy 

MPP

 Farm production 

history

 US average All Milk 

Price

 US average feed 

ingredient prices

 USDA all milk price

 USDA US average corn 

price received

 Central/Decatur IL 

Soybean meal 

(SBM)price

 USDA Agricultural 

Marketing Service 

(AMS) average alfalfa 

price received

 Forecast of MPP 

margin to rate 

11 months, 

rolling 2 month 

insured cycles 

Not comparable, but 

forecasting has been 

developed.

Dairy 

LGM

IOFC margin 

determined by 

 Milk futures market

 Feed futures market 

 CME futures markets 

for milk and feed

 Futures markets 

have minor errors 

that grow too 

large over long 

time horizon

2-11 months, 

rolling

Futures markets are more 

accurate in the short term 

and less so long term, but 

still accurate enough to 

rate short periods.

Lamb 

LRP

 Future lamb prices

 Actual lamb prices

 Econometrically 

modeled

 USDA AMS

 Future lamb price 

is forecast using 

econometric 

model

12 months, 

cumulative

Evaluation of econometric 

model indicated it is 

insufficient to forecast 

lamb prices accurately.

Catfish 

LGM

 Current and future 

catfish price

 Current and future 

feed price

 No source for future 

catfish price

 CME futures markets 

for feed ingredients

 Current prices for 

feed and catfish 

 Future catfish 

price forecast 

requires an 

econometric 

model

 Feed and catfish 

price informally 

reported by Dr.

Hanson.

TBD but in 

order to 

accommodate 

catfish growout 

period - 15 

months, rolling 

Apr-Oct, 

cumulative 

Predicted results:

 Model to forecast 

future fish price will 

be very inaccurate
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In the following table, we summarize the information needs and availability for catfish, in comparison 

with the existing LGM and LRP-Lamb programs. 

Table 9: Information needed to develop a ratable insurance product to protect gross margin 

– sector summary 

Sector

Product prices Feed prices

Measurable production

Current Future Current Future1

Cattle     Yes

Swine     Yes

Dairy     Yes

Lamb  X N/A2Yes

Catfish 3X

3 5 No4

1

 Future feed prices can be forecast using weighted futures for individual feed ingredients 

2

 LRP-Lamb is not a gross margin program 

3

 Could be collected and reported but are not currently produced in the public domain. Limited data is 

collected by Auburn University Professor Terry Hanson.4 Inventory could in theory be implied/tracked by 

feed purchases; however, practically speaking, catfish losses are not measureable.. 

5

 Technically, it may be possible to develop a future feed price beyond 1 year; however, futures markets 

that far out are highly volatile and thinly traded. 

6.6. Existing catfish risk protection programs 

a) List and summarize provisions and benefits of all state and federal programs that 

support or subsidize producers 

There are currently no active insurance plans, either commercial or government funded, that insure 

catfish production losses or protect against changes in market prices. Several times in the past, 

government catastrophic payments have been made to catfish farmers to cover losses (see Disaster 

programs below). 

Arkansas and Alabama each have modest research and promotion programs for catfish, funded by a $1 fee 

per ton of catfish feed purchased. 

b) Research and describe any private insurance program 

During the listening sessions, attendees indicated that they recalled only a single private offerer of catfish 

insurance; this took place years ago and lasted only a year or so. During the listening sessions, farmers 

explained that claims were so high that the program was discontinued. 

There are no known private insurance programs currently operating. 

c) Note any gaps in coverage or constraints of private insurance programs, if 

applicable 

Not applicable – there are no known private programs insuring catfish. 
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d) Disaster programs 

Catfish farmers have been recipients of emergency relief funds on several occasions over the last fifteen 

years. Ideally, an insurance program would eliminate the need for ad-hoc emergency relief. During the 

listening sessions, farmers compared the potential benefit of a margin insurance program to payments 

they had received in the past. 

The following relief programs have been made available to catfish farmers since 2000: 

- In 2010, up to $12,000 per eligible catfish farmer was made available under the USDA’s 

Trade Adjustment Assistance (TAA) for Farmers Program. The program provided free 

technical training, then payments of up to $4,000 toward developing a business plan or 

long-term business adjustment plan, and up to an additional $8,000 towards 

implementing a long-term plan. 

- In 2009, US aquaculture producers were allocated $20 million in for feed assistance 

under the 2009 Aquaculture Grant Program (AGP). Payments were limited to $100,000 

and to farms whose average AGI did not exceed $500,000 from 2005-2007. Payments 

were made by multiplying a producer’s feed deliveries by the difference between the 

2009 feed price and the states’ 2003-07 five-year average feed price. 

- Southeast and Mid-South catfish farmers were eligible for $11 million in assistance for 

catfish feed losses due to declared federal disasters between January 2005 and February 

2007. Mississippi received $8.12 million and Alabama $3.12 million. Losses eligible for 

payments included loss or damage of feed, increased feed costs, and costs associated 

with lost feeding days. Individual payments were capped at $80,000. The payments 

were authorized under the “U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, 

and Iraq Accountability Appropriations Act, 2007”.

- Under the Agricultural Assistance Act of 2003, in August of that year catfish producers 

began receiving credits of $34 per ton of feed based invoices for purchase in 2002; feed 

mills certified their customers and volumes, and the credits were provided for purchases 

of feed. In all, $34 million were allocated to the eleven catfish producing states; 

Mississippi was allocated $20 million. 

6.7. The cap on livestock program expenditures 

There is currently a cap of $20 million – fully used in the past few years - on RMA’s LGM and LRP program 

expenditures. Any new livestock plans would be subject to the following program requirements identified 

earlier: 

 

(10) LIMITATION ON EXPENDITURES.—The Corporation shall conduct all livestock 

programs under this subtitle so that, to the maximum extent practicable, all costs 

associated with conducting the livestock programs (other than research and 

development costs covered by section 522) are not expected to exceed the 

following: 

(A) $10,000,000 for each of fiscal years 2001 and 2002. 

(B) $15,000,000 for fiscal year 2003. 

(C) $20,000,000 for fiscal year 2004 and each subsequent fiscal year. 

The current LGM $20 million cap would suffice only to cover 2-3% of US milk production. 
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In recent years, the cap has been reached, mostly through LGM-Dairy sales. Once money for subsidies 

runs out in a given year, LGM policies are no longer offered until the next fiscal year. During several of 

the years, LGM-Dairy policy sales have been suspended at various times to allow funds to remain available 

to other LGM programs; in several of these cases, LGM-Dairy policy sales were later resumed and the full 

$20 million allocation was used. 

For instance, for the 2015 (current) fiscal year, LGM-Dairy had used $11.2 million through the first 

semester, and RMA announced a suspension of LGM-Dairy policies. Other livestock policies had used $2.5 

million, leaving $4.6 million in subsidies still available to the other policies (cattle, lamb, and swine). 

Later this fiscal year, RMA made available $1 million for the LGM-Dairy program to cover the months of 

August and September. 

Policy premiums are due the first business day of the month following the last month that a producer 

reported insured marketings. 
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7. DATA AVAILABILITY AND PRICE METHODOLOGIES 

In order to produce a gross margin insurance product, i.e., “income over feed costs” (IOFC), we need 

estimated future market prices for both catfish feed and catfish. This section provides details on what 

data are available, what are not, and how data gaps might be filled. 

7.1. Search for price data at regional and national level and yield data for each 

region 

To produce the time series we needed for our analysis we appended Dr. Hanson’s data discussed in 

section 3.1 on to the end of the USDA NASS catfish data series. The following two graphs show the time 

series from NASS and the data collected by Terry Hanson. 

The following two data series will be needed to produce an LGM-Catfish insurance program. As Dr. 

Hanson’s data is currently the only source, RMA will have to decide how and whether it wants to 

procurethis data. Dr. Hanson has indicated he is amenable to discussion with RMA to produce the data for 

the purposes of insuring catfish. 

Figure 14: Average monthly catfish price paid to farmers, $/pound, 2000-2014 

 Source: USDA NASS, T. Hanson, Auburn University 
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Figure 15: Average monthly catfish feed price, $/ton, 2000-2014

 Source: USDA NASS, T. Hanson, Auburn University. 

RMA specified it wanted regional and national level price data and yield data. However, apart from the 

data and source listed above, there are no other price data. Moreover, no regional data exist. In 

addition, catfish yield data do not exist in any form. The greatest challenge to producing this feasibility 

analysis has been collecting sufficient data. 

In order to estimate future industry margins, we need estimates of both future prices and future costs. 

However, there are no good data for catfish production costs, so there is not simple way to calculate the 

share of production costs that feed represent. 

7.2. Catfish feed price forecasting 

We developed a model to estimate the future price of catfish feed involving the following steps: 

- Calculating a historical least cost formulation (LCF) for catfish feed based on historical 

ingredient prices; 

- Checking the fit of this LCF series with actual reported catfish prices; and 

- Adjusting the formula to include other manufacturer costs and margins and yield a 

manufactured catfish feed price series; and 

- Testing the manufactured catfish feed price formula. 

7.2.1. Calculating a least cost formulation (LCF) for catfish feed 

Feed manufacturers use linear programming models to construct a least cost formulation to minimize feed 

costs. As the price of each ingredient varies, formulators change the recipe so that it maintains the same 

nutritional value but keeps costs to a minimum. In principle, if a least cost formulation fits well against 

historical prices, it is likely to be a useful in estimates of future prices, if it uses as key inputs the futures 

values for key ingredients. 
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Catfish feed ingredients 

Catfish feed is complex. The following table provides details on the most commonly used feed 

ingredients used in catfish feed. Over the very long term the feed composition has changed – for 

instance, feed mills no longer use menhaden fishmeal. However, in recent years, feed composition has 

not changed substantially. 

Table 10: Common catfish feed ingredients & nutrient profiles 

Dry 

matter

Crude 

protein

Crude 

fat

Crude 

fiber Ash

Digest 

energy

Avail 

lysine 

Avail 

methionine 

& cystine

Total 

phos

Avail 

phos

Yellow 

pigment

Ingredient % % % % % kcal/kg % % % % ppm

Soybean meal 88 47.8 1.0 3.0 6.0 3163 2.83 1.27 0.67 0.24 0

Cottonseed meal 90 41.0 1.5 12.7 6.4 2614 1.09 0.84 1.00 0.22 0

Canola meal 91 38.0 3.8 11.1 7.2 2214 1.59 1.41 1.17 0.35 15

Penut meal 90 47.0 2.5 8.4 5.0 3190 1.31 0.93 0.57 0.16 0

Distillers grains w/solubles 92 27.0 9.0 8.5 4.5 2786 0.58 0.84 0.89 0.69 30

Menhaden fish meal 92 62.0 9.2 1.0 19.0 4129 3.88 1.78 3.00 1.28 0

Porcine meat & bone meal 96 55.0 10.5 2.3 26.5 3716 2.60 0.86 4.00 2.10 0

Porcine meal w/blood 92 65.0 10.3 1.8 19.0 3716 3.40 1.02 3.50 1.84 0

Poultry by-product meal 94 53.0 14.0 2.5 19.0 4143 1.38 1.09 2.70 1.42 0

Corn gluten feed 88 21.0 2.0 10.0 7.8 2106 0.40 0.71 0.90 0.67 13

Corn germ meal 90 20.0 1.0 12.0 3.8 2334 0.70 0.79 0.50 0.22 3.4

Corn grain 86 7.5 3.5 1.9 1.1 2516 0.17 0.22 0.23 0.06 13

Wheat grain 86 13.5 1.9 3.0 2.0 2339 0.34 0.42 0.41 0.08 0

Wheat middlings 89 15.0 3.6 8.5 5.5 2267 0.60 0.24 0.91 0.18 0

Fat/oil 99 0.0 99.0 0.0 0.0 8730 0.00 0.00 0.00 0.00 0

Lysine HCl 100 0.0 0.0 0.0 0.0 0 78.00 0.00 0.00 0.00 0

Vitamin premix 100 0.0 0.0 0.0 0.0 0 0.00 0.00 0.00 0.00 0

Dicalcium phosphate 100 0.0 0.0 0.0 85.6 0 0.00 0.00 18.50 12.93 0

Trace mineral premix 100 0.0 0.0 0.0 90.0 0 0.00 0.00 0.00 0.00 0

Source: Menghe Li, Mississippi State University 

Although there are a number of viable ingredients for catfish feed, cost is the limiting factor. Both the 

ingredients and their percentages in the recipe can change as prices change. The typical feed ration is 

usually made from only about five or six key ingredients. 

We considered all the currently used ingredients in manufactured feed. Almost all the plant-based 

commodities have futures prices. However, several ingredients such as porcine meal and poultry 

byproduct meal do not. 

Following the advice of Dr. Menghe Li, a catfish nutrition expert, we built a ration out of the ingredients 

in the table below. We have also included the exact time series and data source we used for the 

historical prices. 
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Table 11: Commodity feed ingredient price sources 

SBM Hi Pro U.S. - Central IL Prices, wholesale

CtsdM Memphis, TN 41% solvent,Table 16 By product feeds

DDGS Central IL Table 16 By product feeds

Fish Meal U.S. - Domestic, East 

Coast Prices, wholesale

MBM U.S. - Central US Prices, wholesale

PFM U.S. - AR points Prices, wholesale

CGF Midwest 21% protein, Table 16 By product feeds

CGM Midwest 60% protein, Table 16 By product feeds

Corn United States Prices received by farmers

Wheat 

grain United States Prices received by farmers

Wheat Mid U.S. - Kansas City, MO Prices, wholesale

Sources: USDA NASS, USDA ERS, USDA AMS 

These commodities represent the most commonly used ingredients for which there are also futures prices. 

These commodities account for about 97% of the total feed ingredients. In addition to major ingredients, 

manufacturers also mix fat and vitamin premixes into the recipe. Feed manufacturers may also tweak 

their particular recipes in some way. The base cost of the catfish feed recipe is well represented by the 

commodities we have chosen. 

The linear program we used to compute the least cost formula is WinFeed 2.8.4. The exact software 

needed to replicate the results is not critical; any least cost feed formulation software should give similar 

results. 

Using this least-cost formulation, we used the historical feed ingredient prices (spot market prices from 

NASS) to calculate a time-series for the ingredient costs within a catfish feed formulation. The NASS data 

is a monthly time series, however we learned that feed manufacturers do not change the actual 

formulation very often – generally only once or twice per year and at most 3 times. Given this information 

we decided that it would not be necessary to compute the monthly least cost ration. Instead, we 

calculated the least cost ration based on the average monthly spot price for four months per year, March, 

June, September and December. We computed the least cost ration for feed ingredients for each of 

these quarters from 2000 to the first quarter of 2015. 

7.2.2. Checking the fit of this LCF series with actual reported catfish prices 

We can then test the fit of this series against actual reported feed prices. 

The catfish industry uses both 28% protein and 32% protein feeds. However, Farmers may switch between 

the different feeds through the growth cycle or when prices are high or low. In short the practical 

administration of an insurance policy with two feed rations would be more complex than required. For 

these reasons we chose to develop a time series of reported feed prices based on an average of the two, a 

30% ration. A quick check of the differential between 32% feed prices and 28% feed prices showed a very 

tight correlation of 0.998097. This indicates that a 30% ration would serve as a good proxy to estimate an 

average feed price. SMEs agreed with this, adding that some farmers used both types of feed, depending 

on the growth stage of the fish. 
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Testing the model 

After running the least cost ration using the historical spot market prices, we tested the fit with the 

actual feed prices. We tested this to see whether the least cost formula was capable of matching the 

volatility of the actual feed prices. 

 

The correlation between the LCF and actual catfish feed prices is 0.981712%. Since the correlation is so 

high, we conclude that the LCF is a valid basis from which to calculate a manufactured catfish feed price 

series. However, this LCF model only gives us about half the total feed price. We have no data for several 

feed ingredient costs such as the vitamins, Lysine, methionine, and others. In addition, feed 

manufacturers have other costs such as electricity and milling (and profit to account for). The next step 

involves estimating these uncounted costs to arrive at the price farmers actually pay for feed. 

7.2.3. Adjusting the formula to yield a manufactured catfish feed price series 

In order to get the estimates of manufactured feed prices, we need not only an estimate of the key feed 

ingredient components of catfish feed, but an estimate of the overall catfish feed cost – which must 

include manufacturers’ other costs plus their profit margin. This is the price paid by farmers. 

Feed manufacturer margins 

Next, we calculated the difference between the actual feed prices and the raw ingredient LCF price and 

obtained an average difference of 0.41. This indicates that over the period evaluated, key raw ingredient 

costs represented 59% of the feed prices, with the remaining 41% accounting for other factors, such as the 

marginal feed ingredients not already included (fats, oils, vitamin premixes, Lysine, mineral premix), plus 

manufacturing costs and the feed miller’s profit.

Figure 16: Estimated non-key ingredient costs as a percentage of total cost, 2000- 2014

 Source: Agralytica 

As can be seen in Figure 16, there is a change over time between the non-key feed ingredient costs and 

the actual feed prices. During the period from 2000 to 2003 the difference is pretty tight around 42%, 

however beginning in 2004 we see the percentage jump over 50% for most quarters, to as high as about 
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55%. It begins to fall back down in 2007. Since 2011, the percentage has bounced between 27% and 40%. 

The average of all periods is 41%. 

We are unsure the mechanism that has caused these variations. Although some of the variations may 

simply be random noise it is also likely that there are other variables that are likely impossible to fully 

capture in any model. However, this model represents the most viable option to predict feed prices. 

We thus add this margin of 41% to the computed LCF feed price to arrive at the price a catfish farmer 

pays for feed. 

7.2.4. Testing the catfish feed price formula 

The next step is testing the fit of the estimated prices to the actual feed prices. The graph below 

compares the two series for the period 2000-2014. 

Figure 17: Estimated feed ration cost and actual feed prices, 2000 - 2014 

 Source: Agralytica 

The correlation of the two series (estimated feed prices vs. actual feed prices) is 0.982. The LCF model, 

adjusted to reflect manufacturers’ additional costs and margin yield a series that very closely matches 

the volatility of the actual catfish feed prices, see Figure 17 above. However, the period from 2004 

through 2006 shows a good deal of divergence from the actual feed prices. In addition, the period from 

2012 through 2013 shows a larger inverse relationship where the estimated feed prices are greater than 

the actual feed prices. 

We computed the error for the estimated price and the actual price. See the following graph. Again, the 

error is much higher from 2004 through 2006. While the error is typically between 0.2 and -0.1, from 

2004 through 2006 it went over 0.2 nine times, only three estimates from that period exhibit an error less 

than 0.2. In all, these outliers account for 15% of the 60 total price estimates. 
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Figure 18: Error of the estimated feed ration vs. actual prices 

 Source: Agralytica 

The error is calculated as: 

Error = ((Actual Price − Estimated Price)

Estimated Price )

The average of the difference between the actual feed prices and the estimated prices using the least 

cost formula is $15.51 in dollar terms. However, the maximum difference is $72.51 and the minimum is -

$79.58. This represents quite a large error. There appears to be a shift in the uncounted costs that make 

up the difference between the feed ingredient costs and the final price of feed. 

Conclusion 

Although the model does a decent job of predicting prices, it could be better with the addition of some of 

the unaccounted for variables. Additional prices of the minor feed ingredients might help to eliminate 

some of the error. 

Given the power of this model to backward predict prices, we believe this methodology may work to 

forecast short-term (<1 year) future feed prices if it can be improved. However, at this point there is no 

available data about the additional feed ingredient prices and feed mill production costs to improve the 

model. 

In addition, there is also the problem of predicting a future feed price using any model. The availability 

of futures beyond one year varies by feed ingredient. More importantly, the farther out the delivery date 

is, the greater the volatility in those prices. Futures beyond one-year are very thinly traded, if at all, so 

the price data is unreliable for accurately predicting the actual settlement price. Therefore, feed price 

predictions farther than a year out based on this, or any, model are not likely to be very useful. 
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7.3. Identify viable data series and formulate all reasonable alternative methods 

other than contract price to develop expected prices for catfish 

As noted earlier, formal contracts are not used in the catfish industry so there is no expectation of the 

price farmers will receive for their catfish at the time of sale. Unlike the sectors that already have LGM 

plans (cattle, swine, dairy), there is no futures market for catfish. Another approach is thus needed to 

develop expected future catfish prices. This is why we reviewed the LRP-Lamb approach – it uses an 

econometric model to predict future lamb prices. Using LRP-Lamb as a guide, we evaluated the 

possibility of using a similar approach to forecast catfish prices. 

An econometric model for catfish was published by Muhammad et al in 2007. Here we compare the two 

approaches and test whether an econometric approach to catfish would work for insurance purposes. 

a) Model comparison 

In the following table, we show the input data used for the LRP-Lamb model, the catfish econometric 

model, and whether or not the data required for the catfish model are available. 

Table 12: Insurance model comparison 

LRP-Lamb Catfish (Muhammad et. al., 

2007)1

Catfish data availability?

Lamb slaughter price for week (t+x) 

where x =13, 26, 39, or 52

Lamb slaughter price for week (t-1)

Actual slaughter under Fed Inspection 

Lambs and Yearlings reported in week (t2)

Actual Live weight of sheep Slaughtered 

Under Federal Inspection reported in 

week (t-2)

No. 1 pelt price reported for week (t-1)

Index, 5 yr, 52 week centered moving 

avge seasonal index for week (t+x)

Trend for week (t+x)

Dummy variable to adjust for effects of 

Mandatory price reporting (farmers show 

asymmetrical knowledge of market and 

time sales accordingly, not an issue with 

the Catfish Gross Margin) 

Easter variable to account for Easter sales 

Processor quantity

Data not available any more from 

USDA; no other source 

Processor price

Data not available any more from 

USDA; no other source 

Farm price – Historical USDA, Hanson only source now 

Seafood retail index price USDA Economic Research Service

Catfish import price

US International Trade Commission

(USITC) spotty and infrequent, 

various Harmonized Tariff System

codes, not enough long term 

consistency to be useful

Tilapia import price

Data for other white fish would likely 

also be needed.

USITC spotty and infrequent, various 

HTS codes, not enough long-term

consistency to be useful.

Energy price index US Bureau of Economic Analysis

Catfish feed price – Historical

USDA, Hanson only source now. 

However, feed price might be 

forecast short term (<1 year) using a 

model.

1Catfish model source: “The Impact of Catfish Imports on the U.S. Wholesale and Farm Sectors.” Andrew Muhammad, 

Sammy J. Neal, Terrill R. Hanson, and Keithly G. Jones. Agricultural and Resource Economics Review 39/3 (October 

2010) 429-441. 
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b) Catfish model data issues 

The Catfish econometric model has multiple data shortcomings. Some data series are simply not 

available. Processor quantity and price are no longer regularly published by the USDA or any other 

source. As noted, both catfish farm price and catfish feed prices are now collected and occasionally 

reported by a private source, Dr. Terry Hanson of Auburn University.. 

A key shortcoming of the model is that the market price for catfish is impacted by low-priced imports. 

The model above includes two terms related to fish imports. Unfortunately, import fish data from USITC 

are incomplete and spotty, and are unlikely to be a reliable source for updating an econometric model on 

a monthly basis. 

In addition, multiple types of imported white fish compete with catfish in the marketplace. Though 

consumers in catfish production areas may express a distinct preference for US farm-raised catfish, many 

do not distinguish between catfish varieties and/or between catfish and other types of white fish. 

Another major obstacle is that the Harmonized Tariff System codes have not remained consistent; they 

change over time as particular products gain in relevance and begin to be tracked separately. This makes 

tracking competitor imports comprehensively over time near impossible, as it is difficult to piece back 

together disaggregated codes to get a historical price series. 

Consider the fact, for example, that the model above does not include pangasius, a fish whose imports 

have grown substantially in recent years as the product has entered the product as a direct rival to US 

farm-raised catfish. It is widely accepted that pangasius imports have adversely affected catfish prices. 

Another consideration omitted from the model is the potential impact on prices resulting from 

government regulation of trade. For instance, potential quotas, penalty tariffs, or other measures that 

result in limiting or raising the costs of imports represent an additional exogenous factor that could 

impact catfish prices. 

7.3.2. Evaluating the catfish price prediction model 

The LRP-Lamb econometric model has already been evaluated and found to have significant shortcomings. 

It used accurate and consistent data but ultimately did a poor job of predicting prices and created 

opportunities for moral hazard. 

By comparison, the catfish econometric model requires some data sources that are unreliable or 

nonexistent. 

The time horizons for the lamb policies are 13, 26, or 39 weeks (i.e., 3, 6, or 9 months); for catfish the 

time horizon required to cover a production cycle would have to be 15+ months. 

We do not believe it would be possible to produce an accurate catfish price forecast with this type of 

model. Poor predictions of future prices could result in poor loss ratios, a product considered too 

expensive by farmers, or it could allow for adverse selection. 
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7.4. Formulate methods to construct Yields and/or revenue for prospective 

insureds without APH or ARH 

In order to construct a history for prospective insureds in the absence of a full 4-year production history, 

one could use the following method for the purposes of assigning target marketings: 

1. With no history, there would be no basis for assigning marketings. 

2. With one year of history, take 50% of that one year’s production and assign it to the other three 

years. 

3. With two years of history, take the average of those two years and assign the other two years 

75% of their average. 

4. With three years of history, use 90% of the average of those three years for the fourth year. 
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8. RISK ANALYSIS 

Many of the risks faced by catfish farmers so far are on-farm perils (operational risks). As such, they are 

outside the scope of what could be addressed by a margin insurance program. However, they are of 

relevance in understanding the risks faced by catfish farmers, and may be of assistance in the 

development of an insurance program. 

In addition to operational risk, farmers face economic risks as well, both stemming from the market and 

financial issues related to their own operations. 

a) Define economic risks 

The following table presents some key economic risks faced by catfish farmers, as well as their ability to 

influence that risk. 

Table 13: Key economic risks 

Risk Farmer’s ability to influence

Falling / low catfish prices Limited. Unenforceable agreements with processors.

Increasing input prices Short term – hedge feed inputs / book feed.

In the long term – No influence; might be able to switch 

to a more profitable crop.

Rising interest rates None

Reduced consumer demand Short term – None

Long term - Switch to more profitable crop, if viable.

Regulatory pressure & costs None except through group lobbying.

Import competition None except through group lobbying and marketing 

efforts.

Low prices for substitute 

products 

None

 

Most of these economic risks are beyond the influence of any given catfish farmer, although some in the 

long run may have the option to shift away from catfish production. Some of the risks might be 

counteracted by catfish farmers united as a group. 

However, for the most part, catfish farmers are price takers and are exposed to market risk. 

b) Collect data to identify and quantify risks 

There is limited up-to-date, published information quantifying the risks faced by catfish farmers. The 

Economic Research Service publishes the Census of Aquaculture every five years (the year after it releases 

the Census of Agriculture), though the Census of Aquaculture is chiefly concerned with operation sizes, 

operators, inventory, and total sales. 

As noted previously, most data related to catfish production and the market are no longer officially 

collected and reported by the USDA. y However, Dr. Terry Hanson of Auburn University continues to 

collect catfish prices to the processor and catfish feed prices. 

No on-farm risks are currently insured. The most significant threats, generally related to maintenance of 

water oxygen levels and quality, are largely preventable through sound management techniques. 
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The following table identifies key catfish perils, along with its relative frequency, severity, a farmer’s 

ability to mitigate the threat, and past evaluation of the peril’s insurability.

Table 14: Catfish events: frequency, severity, ability to mitigate, insurability 

Events Frequency Severity Ability to mitigate Insurability

Price pressure from 

imports, low prices 

paid to farmers

Ongoing Severe –

substantial 

price gap

Very limited –

difficult to expand 

niche market for 

US catfish

Uninsurable – No data

High feed costs Episodic Can be severe Limited. Can book 

feed or hedge

Insurable – enough data 

exists

Demand shock Infrequent Moderate None Uninsurable – no way to 

predict catfish prices or 

resulting demand

Growth of imports Ongoing Severe Very limited: 

lobbying

Uninsurable

Supply shock Occasional Can be severe Limited; avoid 

policies 

encouraging 

marginal 

producers

Uninsurable – no way to 

count inventory

Predation, pest, or 

disease losses

Common Limited to 

severe

Variable, 

depending on 

peril. Overall, 

management 

practices will have 

a substantial 

impact.

Uninsurable – no way to 

count inventory

Fish death due to 

mismanagement

Rare Can be severe Preventable Uninsurable 

Power outages/Loss 

of aeration

Rare Severe Preventable Uninsurable – no way to 

count inventory

Equipment failures Rare Can be severe Preventable Uninsurable

Price pressure from imports, low prices paid to farmers 

Farmers have no ability to mitigate low catfish prices. This has been a significant problem over the past 

decade – industry production has dropped in half since its peak in the early 2000s. 
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High feed costs 

Catfish farmers have faced periods of very high feed costs in recent years. Booking feed is the simplest 

and for many farmers the most effective option to deal with feed price volatility. Many catfish farmers 

contract their feed purchases 3 to 12 months in advance, depending on feed price levels and market 

volatility. Feed mills allow them to book feed then hedge their exposed positions using futures contracts 

for the feed ingredients needed to meet their contracts with producers. 

Catfish producers with the expertise and financial ability also have the option of hedging inputs on their 

own, and/or diversifying the activities on their farms to include crop production. 

Demand shock 

Demand shocks, a rapid reduction in consumer demand, is not a frequent problem for the catfish market. 

Individual farmers have no ability to mitigate demand shocks. 

Growth of imports 

This is a primary threat to catfish producers – imports of competing white fish such as pangasius, swai, 

and tilapia put pressure on catfish prices. Even relatively modest pressure – e.g., 5 to 10 cents per pound 

- can make the difference between industry profitability and losses. 

Individual catfish farmers have no way to mitigate the price dampening effect of competing imports. Even 

as a group, the power of the catfish industry to affect import competition is limited. 

Supply shocks 

Supply shocks occur with overproduction. Periods of high prices may induce overproduction, resulting in a 

glut of product in the market. This in turn can depress prices. Individual farmers have little control in 

these situations, other than try to avoid overproducing during times when margins are negative. 

Predation, pest, or disease losses 

Predation is a significant peril, and will impact catfish farmers disproportionately. Efforts to prevent bird 

predation are expensive – estimated at $2 million in the 1990s, with estimated industry losses at $5 

million – figures that are likely to be higher today. 

Disease is also a very real concern and in any given year, about 70% of farmers will experience a disease 

condition in their ponds. It is a common occurrence, however major losses are rare as most of the time it 

is caught in time and treated. 

Fish death due to mismanagement 

The most common manmade peril is simple mismanagement, whether from a lack of knowledge or some 

oversight. Mismanagement can hurt production, though some problems can be corrected before losses 

mount significantly. An experienced catfish farmer will have routines and procedures in place that will 

detect potential problems early. Inexperienced farmers can avail themselves of help available through 

extension services, universities, and catfish aquaculture groups to learn how to develop routines and 

procedures to prevent losses. 

Catfish research, understanding of aquatic diseases, modern technology, and understanding of nutritional 

requirements have dramatically changed the catfish industry. In the early days of the industry, 
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catastrophic losses were common due to an incomplete understanding of catfish biology and its effects. 

Modern technology allows farmers to spend less time testing ponds and while maintaining continuous realtime monitoring. 

Manmade perils and failures in aquaculture that result in catfish losses are the consequence of poor 

management, equipment, or mechanical failures. Fortunately, these are significantly less common that 

natural perils such as disease or predation. Several can cause significant losses very quickly though. 

Power outages/Loss of aeration 

Fish losses due to the loss of aeration are uncommon as well. Using modern technology, farmers can 

monitor several critical conditions in real-time. Alerts of low oxygen can be sent automatically to cell 

phones, giving farmers a crucial warning. Electrical power loss (to aerators) is a substantial concern for 

farmers. A farmer may not have enough tractor-powered aerators to adequately supply ponds at key 

moments, such as the early pre-dawn period when oxygen levels are most critical. Although this is a 

relatively rare occurrence, when power failure does occur it may devastate the entire pond. 

Equipment failures 

Mechanical or technological breakdown of machinery is potentially disastrous. In the event of mechanical 

or technological failures, an entire pond may be wiped out in a matter of hours or even minutes. 

Most farmers currently use internet, Wi-Fi, or cell, enabled oxygen sensors that automatically alert the 

farmer when the oxygen levels begin to get low. One producer who has wireless enabled oxygen sensors 

on his ponds recounted a major loss of fish due to a simple failure. A worker had forgotten to plug the 

network cable back into the transmitting unit on the oxygen sensor. The unit was working properly; 

however, the signal that oxygen levels were low was unable to reach the farmer and he lost the entire 

crop in that pond. While that is a unique case, it illustrates the idea that technology can greatly reduce 

losses when implemented. However, is still vulnerable to different kinds of failures. Cell tower signal 

loss, router failures, cable failures, connection issues, or transmitter or sensor failures can still lead to 

losses. However, those kinds of failures are rare. A particular farmer will likely never experience losses 

due to those kinds of breakdowns. 
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9. EVALUATING THE FEASIBILITY OF CATFISH MARGIN INSURANCE 

In this section, we detail our findings regarding the feasibility of establishing a gross margin insurance 

program for catfish farmers. 

We cover the following: 

 Previous catfish insurance research 

 A summary of relevant FCIC sponsored livestock insurance plans 

 What a catfish gross margin insurance plan might look like 

 What would be necessary to establish a catfish margin insurance plan 

 Other obstacles to developing LGM-Catfish 

 A review of alternative approaches and solutions 

 Actuarial and rating issues 

 Conclusions and recommendation 

9.1. Previous catfish insurance research 

In 2001, RMA entered into a five-year partnership with Mississippi State University (MSU) to conduct a 

National Risk Management Feasibility Program for Aquaculture (NRMFPA). The research eventually 

extended over seven years and involved many aquaculture research institutions and researchers. That 

study reviewed information on markets, production systems, and data for four major aquaculture sectors 

in the United States. The results of the NRMFPA were presented to a meeting of the Board of Directors of 

the Federal Crop Insurance Corporation (FCIC) in March 2009. Ultimately, RMA staff informed the Board 

of Directors that RMA was withdrawing the programs from consideration in the light of issues raised by 

expert reviewers, but would continue to build upon the research. Key concerns surrounded issues 

associated with identifying pond inventories and objections to insuring perils that could be avoided by 

good management and prudent investment (e.g. investment in generators to run aeration and oxidation 

pumps during power outages). 

We had the opportunity to review the various outcomes from the NRMFPA as part of a review of the 

feasibility of crop insurance for fresh and salt water aquaculture in 2011 (the freshwater volume can be 

found at: http://www.rma.usda.gov/pubs/2012/freshwateraquaculture.pdf). This report also underlined 

the challenges developing crop insurance for aquaculture. Catfish had the most promising industry 

structure (it was the largest sector and production systems varied less than for other species), although 

several factors led to the conclusion that insurance plans meeting FCIC standards were not feasible. In 

particular, that report confirmed issues measuring inventory and losses in pond production systems used 

for catfish. Issues arose because of continuous stocking of grow-out ponds; the use of other species for 

under-stocking; the movement of stock between ponds and/or facilities and lack of clear evidence of 

mortality; cannibalism because of uneven stocking sizes or poor feeding; and the mixing of different 

batches. 

However, these efforts did not review specifically the role of a margin protection policy. 
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9.2. A summary of relevant FCIC-sponsored livestock insurance plans 

The Agricultural Risk Protection Act of 2000 first instructed the FCIC to establish livestock programs to 

protect producers against price and income fluctuations or protect them from production losses. A 

program cap of $20 million per year was set for Fiscal Year 2004 and beyond. 

In Section 6, A Review of livestock protection plans, we reviewed the LGM programs for cattle, swine, and 

dairy, in addition to the Livestock Risk Protection program for Lamb (LRP-Lamb) and the Margin 

Protection Program for dairy (MPP-Dairy) administered by the Farm Services Agency. 

The LGM plans are similar in that they rely on futures prices for production and key feed inputs to set 

gross margin guarantees. The LRP-Lamb policy, though it protects producers purely against price risk 

rather than gross margin, is relevant to our analysis due to the model it uses to forecast future prices. 

MPP-Dairy, though more of a price support rather than an actuarially sound insurance program, was also 

of interest because it uses an income over feed costs (IOFC) model. 

These plans were reviewed so that they could inform the development of a catfish margin plan. 

9.3. What a catfish gross margin insurance plan might look like 

Based on the reviewed plans, the building blocks of a catfish margin insurance program are clear. As with 

the other LGM plans, by definition a catfish margin policy would need to cover the difference between 

catfish market prices and key catfish inputs – namely feed. Based on the listening sessions and other 

materials, it does not appear that other costs are significant and variable enough to warrant inclusion in a 

policy. 

There are published historical data that provide an indication of what catfish gross margins have been 

over time. Both catfish prices and feed costs per pound of catfish sold are shown in the following graph. 

Figure 19: Catfish price and feed costs, per pound of fish sold 

Source: USDA NASS, T. Hanson, Auburn University. 
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Since 2000, the gross margin, though highly variable, has averaged approximately $0.50 per pound of live 

catfish sold (a decade ago, the margin was approximately $0.40/pound). In our engagement with 

producers and others in the industry, and during the listening sessions, we shared a discrete example 

using these historical data. 

Over the entire 15 year period shown, the catfish producer’s gross margin has averaged $0.41 per pound. 

However, there is considerable variability around that figure. Periods of low margins include 2002-2003, 

2008-2011, and very low margins in late 2012 to early 2013. 

Figure 20: Catfish producer margin, fish price minus feed costs 

 Source: Agralytica 

In line with other insurance programs, a gross margin policy might need to insure up to 80% or more of a 

substantial percentage of this margin — say, 40 cents out of the recent 50 cent average margin — to be 

attractive to catfish producers. 

9.4. What would be necessary to establish a catfish margin insurance plan 

In order to produce a gross margin insurance product, i.e., “income over feed costs”, we need two vital 

pieces of information: 

 The future market price of feed and 

 The future market price of fish. 

The difference between these two provides the expected margin. 

Using the other livestock plans as a guide, we detail here a possible IOFC solution to developing a gross 

margin data series. 

9.4.1. Available data 

Catfish and catfish feed prices were shown in Figure 14 and Figure 15; Dr. Hanson’s data extended each 

time series after NASS stopped collecting those prices. 
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However, in order to estimate future industry margins, we also need estimates of both future prices and 

future costs. There are no data collected that would indicate average catfish production costs, so there 

is no way to calculate the share of production costs that feed represents. 

9.4.2. Catfish feed price forecasting 

We developed a model to estimate the future price of catfish feed. The steps were detailed in Section 

7.2, Catfish feed price forecasting, and included: 

- Calculating a historical least cost formulation (LCF) for catfish feed based on historical 

ingredient prices; 

- Checking the fit of this LCF series with actual reported catfish prices; and 

- Adjusting the formula to include other manufacturer costs and margins and yield a 

manufactured catfish feed price series; and 

- Testing the manufactured catfish feed price formula. 

Conclusion 

Although the model does a decent job of predicting prices, it could be better with the addition of some of 

the unaccounted variables. What these are we do not know and cannot accurately say at this point. 

Additional prices of the minor feed ingredients would help to eliminate some of the error. 

Given the power of this model to backward predict prices, we believe this methodology may work to 

forecast short-term (<1 year) future feed prices if it can be improved. However, at this point there is no 

available data about the additional feed ingredient prices and feed mill production costs to improve the 

model. 

In addition, there is also the problem of predicting a future feed price using any model. The availability 

of futures beyond one year varies by feed ingredient. More importantly, the farther out the delivery date 

is, the greater the volatility in those prices. Futures beyond one-year are very thinly traded, if at all so 

the price data is unreliable for accurately predicting the actual settlement price. Therefore, feed price 

predictions farther than a year out based on this, or any, model are not likely to be very useful. 

9.4.3. Future catfish prices 

Unlike the sectors that already have LGM plans (cattle, swine, dairy), there is no futures market for 

catfish. Another approach is thus needed to develop expected future catfish prices. This is why we 

reviewed the LRP-Lamb approach – it uses an econometric model to predict future lamb prices. Using 

LRP-Lamb as a guide, we evaluated the possibility of using a similar approach to forecast catfish prices. 

An econometric model for catfish was published by Muhammad et al in 2007. Here we compare the two 

approaches and test whether an econometric approach to catfish would work for insurance purposes. 

a) Model comparison 

In the following table, we show the input data used for the LRP-Lamb model, the catfish econometric 

model, and whether or not the data required for the catfish model are available. The lamb and catfish 

models are not directly comparable; their components are provided to show the types of variables 

included in the models. 
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Table 15: Insurance model comparison 

LRP-Lamb Catfish (Muhammad et. al., 

2007)1

Catfish data availability?

Lamb slaughter price for week (t+x) 

where x =13, 26, 39, or 52

Lamb slaughter price for week (t-1)

Actual slaughter under Fed Inspection 

Lambs and Yearlings reported in week (t2)

Actual Live weight of sheep Slaughtered 

Under Federal Inspection reported in 

week (t-2)

No. 1 pelt price reported for week (t-1)

Index, 5 yr, 52 week centered moving 

avge seasonal index for week (t+x)

Trend for week (t+x)

Dummy variable to adjust for effects of 

Mandatory price reporting (farmers show 

asymmetrical knowledge of market and 

time sales accordingly, not an issue with 

the Catfish Gross Margin) 

Easter variable to account for Easter sales 

Processor quantity

Data not available any more from 

USDA; no other source 

Processor price

Data not available any more from 

USDA; no other source 

Farm price – Historical USDA, Hanson only source now 

Seafood retail index price USDA Economic Research Service

Catfish import price

US International Trade Commission

spotty and infrequent, various 

Harmonized Tariff System codes, not 

enough long term consistency to be 

useful

Tilapia import price

Data for other white fish would likely 

also be needed.

USITC spotty and infrequent, various 

HTS codes, not enough long term 

consistency to be useful.

Energy price index US Bureau of Economic Analysis

Catfish feed price – Historical

USDA, Hanson only source now. 

However, feed price might be 

forecast short term (<1 year) using a 

model.

1Catfish model source: “The Impact of Catfish Imports on the U.S. Wholesale and Farm Sectors.” Andrew Muhammad, 

Sammy J. Neal, Terrill R. Hanson, and Keithly G. Jones. Agricultural and Resource Economics Review 39/3 (October 

2010) 429-441. 

b) Catfish model data issues 

The Catfish econometric model has multiple data shortcomings. Some data series are simply not 

available. Processor quantity and price are no longer regularly published. 

A key shortcoming of the model is that the market price for catfish is impacted by low-priced imports. 

The model above includes two terms related to fish imports. Unfortunately, fish import data from the 

Commerce Department are incomplete and spotty, and are unlikely to be a reliable source for updating 

an econometric model on a monthly basis. Moreover, the Harmonized Tariff System codes have not 

remained consistent; they change over time as particular products gain in relevance and begin to get 

tracked separately. This makes tracking competitor imports comprehensively over time near impossible 

as it is difficult to piece back together disaggregated codes to get a historical price series. 

Also, multiple types of imported white fish compete with catfish in the marketplace. Though consumers 

in catfish production areas may express a distinct preference for US farm-raised catfish, many do not 

distinguish between catfish varieties and/or between catfish and other types of white fish. 
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Consider the fact, for example, that the model above does not include pangasius, a fish whose imports 

have grown substantially in recent years as the product has entered as a direct rival to US farm-raised 

catfish. It is widely accepted that pangasius imports have adversely affected catfish prices. 

Another consideration omitted from the model is the potential impact on prices resulting from 

government regulation of trade. For instance, potential quotas, penalty tariffs, or other measures that 

result in limiting or raising the costs of imports represent an additional exogenous factor that could 

impact catfish prices. 

9.4.4. Evaluating the catfish price prediction model 

The LRP-Lamb econometric model has already been evaluated and found to have significant shortcomings. 

It used accurate and consistent data but ultimately did a poor job of predicting prices. 

By comparison, the catfish econometric model has some data sources that are unreliable or nonexistent. 

The time horizons for the lamb policies are 13, 26, or 39 weeks (i.e., 3, 6, or 9 months); for catfish the 

time horizon required to cover a production cycle would have to be 15+ months. 

We do not believe it would be possible to produce an accurate catfish price forecast with this type of 

model. Poor predictions of future prices could result in poor loss ratios, a product considered too 

expensive by farmers, or it could allow for adverse selection. 

9.5. Other obstacles to developing LGM-Catfish 

In addition to challenges developing usable price forecasts for catfish and long-term forecasts for feed, 

there are other obstacles to developing a catfish gross margin policy. Catfish margin insurance poses 

several unique problems other margin insurance policies do not have to contend with. 

a) Length of the catfish growth cycle 

Catfish grows (typically) over two seasons. The time horizon for catfish growout is 15 months or more. 

The values of crop futures beyond the current market year may be very speculative, may not accurately 

predict future prices, and may be too expensive and thus are unlikely to be an accurate indicator of the 

actual costs a catfish feed processor incurs. 

b) Timing of growth and expenditures 

Catfish growout is different from other species. During the warm months, April through November, the 

fish grow and consume feed. However, from December through March, the fish consume very little due to 

the cool temperatures and therefore stop growing. 

c) Variety of production systems 

Unlike cattle, swine, and dairy production, catfish are raised and harvested in significantly different 

ways. There are two major catfish production systems in place, multiple batch and single batch. In the 

single batch system, a farmer usually adds fingerlings at the very beginning of the growing season, usually 

around April and harvests 15 or more months later. In the multi batch system, farmers will add 

fingerlings to a pond multiple times per year, with several generations of fish coexisting in the same 

pond. In such systems, fish may also be harvested multiple times per year. It is also important to note 

the retail market for catfish requires the fish to be neither too small nor too big. The farmer has only 
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some control over sales timing, given that fish that are too small or large receive a price payment 

penalty. 

d) Off-flavors can affect harvesting dates 

Ponds can frequently develop algae or other issues that lead to off-flavors in the catfish. These offflavors can be remedied, but delays harvest since the solution takes time to work the off-flavor out of the 

fish. In the winter, however, off-flavors are much more problematic, as catfish are not feeding or active, 

and thus do not shed the off-flavor quickly. To the extent that harvesting dates shift, it reduces the 

usefulness of insurance policies relying on specific timed forecasts. 

9.6. A review of alternative approaches and solutions 

After detailed consideration and review of other livestock plans and previous efforts regarding catfish, we 

have found no good method to calculate future catfish prices, which are a necessary component of a 

viable gross margin insurance plan. We do not believe the methods presented below would solve this 

problem, but include them here for completeness and in the event that future data availability make 

them viable. 

9.6.1. Alternative 1 – Use an econometric model anyway 

The first alternative is one where an acceptable econometric model is developed. In this case, future 

prices for catfish and futures prices for feed could be used to provide “short” (<12 month) policies to 

guarantee some percentage of the expected gross margin. 

Under this scenario, farmers would buy policies for the upcoming year, indicating a total volume to 

insure, and assign percentage weights of this total to the months in which they expect to market their 

fish. By using feed as a proxy for fish volume to determine how much to insure, farmers could effectively 

customize the policy to reflect their own expected feed conversion factor. 

There are multiple challenges with this approach: 

 The timing of feed purchases and catfish sales will not match up, i.e., farmers will be 

feeding fish for many months prior to marketing them. This may not matter much to 

producers who sell a consistent volume year-round, but could be a problem for those 

harvesting during shorter, concentrated periods. 

 The insurance would not cover the full growout cycle of the fish, i.e. fingerling to harvest or 

stocker to harvest, just one season. 

 It is not clear what basis one would use to assign target marketings. Though there may be 

receipts for fingerlings and/or stockers, and for feed, the insurance would be providing a 

policy based on an unknown quantity of fish. If a penalty were to apply to unexpectedly low 

production (say due to disease or predation losses), then a farmer would have a reduced 

incentive to buy insurance in the first place. This is because under pressured market 

margins, if insured: 

- If the farmer produces less than expected, the farmer would likely be penalized for low 

operational performance under the policy, and 

- If the farmer exceeds the target marketings, the farmer would face greater losses in the 

market (i.e., by selling more catfish at a loss). 
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9.6.2. Alternative 2 – Use prior prices to forecast future prices 

A second alternative is using prior prices to predict future prices. The LRP-Lamb evaluation included two 

models – one was using the current price and the other a rolling-average price. The evaluators found the 

simple current price method to forecast future prices better than any other model. For this alternative, 

for catfish, we simply selected the future price as the average of the last twelve months with a lag of 

either six months or a year (to account for the lag time of prices reported by Terry Hanson). These are 

displayed in Figure 21. 

As the chart in Figure 21 shows, lagged forecasts can differ dramatically between the forecast and actual 

price. Consider prices at the end of 2012: the model would predict catfish prices of $1.20/pound, but 

actual prices were $0.80/pound. 

Figure 21: Lagged catfish price forecast models 

Source : Milliman, based on data from T. Hanson. 

We then calculate the error in the following chart. Note the dramatic recent differences between the 

forecasts and actual catfish prices. 
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Figure 22: Errors of the lagged catfish price models 

Source: Milliman, based on data from T. Hanson 

The error is calculated as: 

Error = ((Actual Price − Forecasted Price)

Forecasted Price )

Any model to forecast future prices is not expected to be perfect (otherwise, there may be no need for 

insurance). However if the model over-projects the price (and hence the gross margin) it would 

encourage growers to over supply the market. 

9.6.3. Alternative 3 – Feed spike insurance 

The third alternative would not fall under a gross margin approach. It would not use catfish prices. Rather 

than protect against loss in margin, it would simply hedge on producers’ behalf against sharp feed price 

increases. 

Short-term (<1 year) forecasts for feed prices could be developed using futures prices for key ingredients. 

A synthetic “feed bundle” could be constructed using feed ingredient prices and allow RMA to insure the 

price of feed in the current or upcoming growing season. For example, a farmer would select how many 

tons of feed to insure for each month of the April-November period, plus a coverage level. 

 This would be little different from catfish farmers hedging their feed costs themselves, or 

hedging by booking feed in advance, as many already do. However, it would be 

customizable based on an individual producer’s feed needs (rather than using standard 

commodity contracts), and it would provide a means of protection for producers without the 

means or know-how to hedge for themselves. 

-80%

-60%

-40%

-20%

0%

20%

40%

60%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 percent

Forecasted 6 month lag Error Forecasted one-year lag Error
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The downsides of this approach: 

 Farmers already have the ability to book feed; many do so, up to a year in advance. In this 

situation, feed producers are hedging for the farmers. As farmers book feed, feed producers 

hedge those positions. 

 Farmers can hedge on their own; some already do. 

 A margin insurance program would therefore be using a subsidy to support a mechanism 

already available to and used by some producers. 

 This approach would tend to benefit those that cannot hedge on their own (for lack of 

knowledge or financial reasons); if offered, however, larger, more knowledgeable producers 

may have little interest in the product. 

9.7. Actuarial and rating issues 

As stated in the RFP, any possible insurance program should be “ratable and operable in an actuarially 

sound manner”. In the statement of work describing this project, RMA provided the following definition: 

“Actuarially sound – For the purpose of the Federal Crop Insurance Program, a classification and premium 

rate determination system, where risk premium collected is sufficient to cover expected future losses and 

to build a reasonable amount of reserve.”

The Casualty Actuarial Society provides the following principles with respect to insurance rates:5

 A rate is an estimate of the expected value of future costs; 

 A rate provides for all costs associated with the transfer of risk; 

 A rate provides for the costs associated with an individual risk transfer; and 

 A rate is reasonable and not excessive, inadequate, or unfairly discriminatory if it is an 

actuarially sound estimate of the expected value of all future costs associated with an 

individual risk transfer. 

Under RMA sponsored programs, the expenses are provided under the Administrative and Operating (A&O) 

subsidy, which is out of the scope of this project. The RMA definition of actuarially sound as discussed 

above implies that the long-term loss ratio should be close to but less than 100%. 

9.7.1. Current LGM rating methodology 

The current Livestock Gross Margin premium is calculated via a determinant Monte Carlo simulation 

procedure using 5,000 random draws per month of the gross margin. These draws are stored in the RMA 

Actuarial Data Master (ADM) tables and updated for the upcoming sales date using current values for the 

parameters. The draws include values for inputs such as corn, soybean meal, and feeder cattle and for 

outputs such as cattle, milk, and lean hogs. The expected value of these random draws is calculated and 

any subsidy is considered in the premium. 

The basis for the random draws is outlined in “Livestock Revenue Insurance”6. Volatilities of commodity 

futures as well as correlations between inputs and outputs are used to develop the random draws. 

 

5

 Casualty Actuarial Society, Statement of Principles Regarding Property and Casualty Insurance Ratemaking (1988). 

6

“Livestock Revenue Insurance” – Working Paper 99-WP 224; November 2000, Revised; Center for Agricultural and 

Rural Development – Iowa State University 
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9.7.2. Possible LGM-Catfish rating methodology 

One could build a rating methodology for LGM-Catfish similar to the current LGM structure. The largest 

obstacle, as has been indicated, is the lack of a futures market for catfish. Although one could try to 

overcome this by developing an expected future price model and back testing – which would provide the 

variability of the expected price and could be used to develop the random draws used in the current LGM 

rating methodology – the concern with this approach is that there may not be enough data to develop 

credible variability. For example, if we look at the price chart from Alternative 2 (Figure 21) there is 

much less variability in price for 2000 to 2010 than for 2011 to 2013. 

9.7.3. Actuarial soundness issues 

For any insurance program to be actuarially sound, the long-term outlays must be lower than the longterm inlays. From a rating perspective, one typically assumes the pool of insureds remains constant. The 

current LGM plans allow signup twelve times a year – a producer can choose whether to participate or 

not. If the insureds have the ability to enter the insurance when it is favorable to them (or exit when 

unfavorable) this causes adverse selection. Adverse selection causes insurance programs to become 

unsound whereby either the loss ratios increase well beyond permissible levels or the rates increase after 

each evaluation causing fewer insured to stay within the program which creates a spiral. 

We calculated the historical margins using actual data since 2000. While the average gross margin was 

close to $0.40/pound, the actual gross margin varied significantly over time: see Figure 23. The gross 

margin varied more due to the change in catfish prices rather than feed price. This was true in 2012, 

which was a major drought year and caused the price of corn and soybeans to increase substantially. The 

insurance guarantee (e.g. the gross margin) could be either set as a long-term average or vary 

significantly, as the actual gross margin does. There are significant problems with either method; 

however, it may be possible to introduce mechanisms into the policy, such as requiring multi-year 

participation that would mitigate these concerns. 
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Figure 23: Catfish gross margins, 2000-2014

 Source: Agralytica based on data from USDA NASS and T. Hanson 

If the gross margin was set at a certain amount that changed little year-to-year (say $0.40) then the pool 

of insureds may remain relatively constant. However, this may cause two problems: 

 It would be difficult to accurately price this program since there would be a difference 

between the current gross margin and the guaranteed margin. Therefore, the premiums 

would vary significantly due to this difference. 

 A gross margin set too high (or premiums set too low) may increase supply and therefore 

cause a significant decrease in future prices, - which would be difficult to accurately price, 

or

 The gross margin set too low (or premiums set too high) and participation would be low. 

Alternatively, if the gross margin was allowed to fluctuate significantly, growers would only purchase 

when the guarantee was relatively high and premiums were relatively low. 

If it were possible to offer multi-year type policies, how would these be rated? If the rates for the next 

year were not set at the initial sign-up this may lead to low participation or confusion when/if the rates 

substantially increase for the next year. If the rates for the next year were offered at the initial sales 

date it would be extremely difficult to accurately measure the required premium two years out. 

We note that the evaluators of the LRP-Lamb program found evidence of adverse selection although they 

could not explain how the insureds could predict the actual prices better than the models. Regardless 

this helped cause the LRP-Lamb loss ratio to be 331% over the evaluation period. 

If the rates were simply set using a formulaic approach, certain distortions in the rating parameters could 

cause the plan to become overly attractive or non-attractive: for example, if the gross margin guarantee 

was high and premiums low or conversely if the gross margin guarantee was near zero. If either of these 
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were the case there would need to be adjustments and someone at RMA would either need to 

judgmentally make changes or well-defined procedures would need to be created in order to address 

these issues. 

9.7.4. Producers’ willingness to pay 

There are four criteria from the RFP that we discuss in this section: 

 Cost effective from the perspective of insured producers; 

 Charge a premium that the insureds must be willing to pay for the insurance; 

 Produce enough interest for the risk to be spread over an acceptable pool of insureds; and, 

 Not allow a change in market behavior or market distortions that change the quantity 

supplied or shift the supply curve. 

In order to gauge the interest of catfish farmers in an LGM policy we asked what they were willing to pay 

for a $0.50 per pound gross margin program at the listening session. We received many responses but no 

definitive amount – most producers thought there were too many variables to make a decision at this 

point. Many of the catfish producers we spoke with at the listening sessions grew other crops and were 

aware of crop insurance, including the premium subsidy. They understood that if there were no subsidy 

in the program then their premium would be the long-term average of the cost. Because of this, they did 

not seem interested in the program since they could self-insure or spend the money on capital 

improvements. 

Some growers were concerned about the effect of an insurance program that guarantees margins would 

have on the overall supply. They were concerned that marginal growers would stay in business longer or 

new entrants would flood the market, lowering the price. These concerns are mitigated to some degree 

by the barriers to entry, although current growers could expand more rapidly. 

This creates offsetting issues: on one hand if there is no or little subsidy the participation would be low 

and on the other hand if subsidy was too high it may distort the market. 

9.8. Conclusions and recommendation 

The key goal of this report was to identify ways to offer an insurance program that can help catfish 

farmers protect their margins. Here we revisit the objectives and scope enumerated in Section 1, 

providing conclusions and recommendations. 

9.8.1. Conclusions regarding objectives and scope 

Below we return to the objectives and scope identified in section 1 and required of an acceptable 

insurance program. 
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Table 16: Objectives: Review and conclusions 

Objective Conclusions

1) Provides meaningful and timely risk 

management benefits to producers 

without distorting markets;

A margin product that compensated producers in times when 

gross margins narrowed would likely provide a benefit to the 

average producer.

However, there are significant concerns that a (subsidized) 

margin product may distort the catfish market as the 

availability of insurance may lead growers to oversupply the 

market.

(On the other hand, an unsubsidized product did not appear 

attractive to producers.)

2) Is cost effective from the perspective 

of insured producers;

Based on feedback from the listening sessions, a margin 

product would need to include a significant subsidy to offer 

an option better than self-insuring (i.e., saving in order to 

manage periods of loss).

3) Is actuarially sound so that premium 

rates will cover expected losses plus a 

reasonable reserve;

We conclude that it is not possible to determine actuarially 

sound rates for a margin program for catfish.

4) Is able to be administered given the 

structure and resources of RMA and 

approved insurance providers; and

We found no structural impediment that would prevent RMA 

and approved insurance providers from offering margin 

insurance to catfish producers:

 If a catfish program were feasible, RMA could create one 

within the current LGM program; and

 Insurance providers voiced no objections or challenges to 

providing catfish insurance – though they did indicate to 

be successful, a program would need to engage farmers 

early in its development.

 However, there remains the current $20 million limit on 

livestock programs. Providing insurance to catfish 

producers would have to come at the expense of another 

livestock group unless the cap were raised.

5) Demonstrates sound program 

integrity.

There are several reasons to believe a gross margin program 

would not be sound:

1. Lack of sufficient data to develop credible variability

2. Lack of subsidies would lead to poor acceptance and too 

costly a program for RMA to administer.

A discussion of the listed scope / requirements for an insurance program are given in the following table. 
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Table 17: Scope: Review and conclusions 

Requirement Conclusions

1) Conform to RMA’s enabling 

legislation, regulations, and 

procedures that cannot be changed;

No issues

2) Charge a premium that the insureds 

must be willing to pay for the 

insurance;

It is not clear that a program could be offered at a rate deemed 

attractive by catfish farmers.

3) Be effective, meaningful and 

reflect the actual risks of producers;

A margin program would in principle reflect the (market) margin 

risk faced by farmers. 

However, in practice, matching farmer’s risks would be highly 

imprecise, as market instruments do not exist to adequately 

cover the life cycle of catfish.

4) Have best management practices 

that can be defined, required of an 

insured and be monitored;

Given that the insurance under discussion concerns market 

margins rather than on-farm perils, best management practices 

would be relevant only insofar as they would impact a 

producer’s target marketings.

5) Identify and appropriately 

categorize perils affecting production 

and/or revenue as insurable and noninsurable;

Not relevant in the context of margin insurance.

6) Be ratable and operable in an 

actuarially sound manner;

A margin insurance program for catfish would not be ratable and 

could not be operable in an actuarially sound manner.

7) Contain underwriting, rating, 

pricing, loss measurement, and 

insurance contract terms and 

conditions;

Applicable only if/when developing a program.

8) Be an appropriate geographic 

distribution of production to ensure a 

sound financial insurance program;

There was a clear distinction in interest levels between MS and 

AL catfish farmers. MS farmers were more vocally in favor of a 

program, AL farmers more skeptical there would be benefit.

Nevertheless, a pilot program could cover only one region (e.g., 

Mississippi Delta).

9) Produce enough interest for the 

risk to be spread over an acceptable 

pool of insureds;

It is not clear that even if approved, a program would draw 

sufficient participation.

Much catfish production is already partially hedged and/or 

diversified against market risk:

 Many producers are also engaged in crop production; when 

feed prices are high, so are the prices they get for their 

crops.

 Some of the larger catfish producers also own processing 

operations, hence are vertically integrated and better able 

to survive thinner catfish production margins.
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Requirement Conclusions

Also, a margin insurance program doesn’t work primarily by 

spreading risk over a pool of insureds facing different operating 

outcomes; it primarily spreads the risk of unfavorable costs / 

prices to the insured pool as a whole over time.

10) Not allow insureds to select 

insurance only when conditions are 

adverse;

This is a key and valid concern with setting up a Catfish margin 

program. LRP-Lamb program evaluators believed that adverse 

selection was taking place; they attributed it to producers 

having superior, asymmetric information.

If gross margins are allowed to fluctuate, producers may choose 

to buy insurance only when margins are high.

11) Avoid or mitigate moral hazards; 

and,

There are potential moral hazards involved with a margin 

program:

1. If gross margins are allowed to fluctuate, producers 

may choose to buy insurance only when margins are 

high (conversely, there may be little participation when 

margins are low).

2. A subsidized program may distort the market by 

encouraging overproduction.

12) Not allow a change in market 

behavior or market distortions that 

change the quantity supplied or shift 

the supply curve.

This is a valid concern. It is likely that insurance would 

encourage marginal producers to remain in the market or 

increase production in response to the availability of insurance. 

This may in turn then exacerbate supply, driving prices down 

and magnifying the compression on market margins.

9.8.2. Recommendation 

After careful review, we conclude that there are key data challenges and actuarial concerns that cannot 

be overcome. We are also concerned that a program could distort the catfish market and be vulnerable 

to adverse selection and moral hazard. 

In order to develop an effective program that can be administered by RMA there needs to be a clear 

methodology and data available. While a model using feed ingredient futures could generate short-term 

feed price forecasts, there is no viable source of future prices for catfish. While alternative future prices 

could be defined, the actuarial rating, if set formulaically, may cause adverse selection in the program. 

The challenges of creating a program for which insureds would be willing to pay, but that would not 

distort the market supply are significant. The current LGM programs without subsidy have almost no 

participation while the LGM-Dairy program sells out quickly. We do not believe there would be significant 

participation in the program without a large subsidy (or only in scenarios advantageous to the growers). If 

the participation were low the cost to RMA of maintaining a program would be too high in relation to the 

benefits provided. If the subsidy was too high this may distort the supply curve. 

We recommend that RMA not try to develop a margin protection plan for catfish. 
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10.APPENDICES AND SUPPLEMENTS LIST 

Appendix A: Listening session announcement 

Appendix B: Catfish listening sessions handout 

Appendix C: Hanson data, Excel file 

Appendix D: Catfish price forecasting model 

Appendix E: Part 5, US catfish grading standards, pdf file 

Appendix F: Feedstuffs for catfish feeds, Excel file 
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SECTION 508 DATA 

These are the data for Figure 1: US catfish sales, million pounds: 

Catfish sales, million pounds

2010 2011 2012 2013 2014

257,400,000 173,900,000 174,800,000 175,300,000 161,500,000 

137,700,000 119,200,000 122,600,000 109,300,000 105,300,000 

 49,400,000 25,500,000 20,000,000 25,300,000 17,200,000 

 16,000,000 16,900,000 12,700,000 15,800,000 14,300,000 

5,850,000 5,200,000 5,200,000 4,000,000 3,400,000 

2,000,000 2,200,000 1,960,000 3,500,000 3,248,000 

3,100,000 2,850,000 2,150,000 2,800,000 2,550,000 

7,400,000 2,250,000 756,000 1,130,000 -

478,850,000 348,000,000 340,166,000 337,130,000 307,498,000 

These are the data for Figure 2: Catfish, US acres taken out of production: 

Catfish acres taken out of production

2010 2011 2012 2013 2014 2015

MS 5600 3400 4900 4200 1830 1500

AR 3000 2700 1170 1600 700 570

AL 870 540 940 165 1010 200

CA 0 0 0 0

LA 400 480 0 0 0

NC 70 15 0 0 0

TX 290 210 170 250 500

Other 20 150 370 310 570

US 10250 7495 7550 6525 4610 2270

These are the data for Figure 3: US meat, poultry, and seafood consumption per capita, 2000-2013 

Fish and 

shellfish Pork Beef Poultry

2000 15.2 47.8 65.1 67.9

2001 14.7 47.0 63.6 67.8

2002 15.6 48.2 65.0 70.8

2003 16.3 48.5 62.4 71.3

2004 16.5 47.9 63.4 72.8

2005 16.2 46.6 62.9 73.7

2006 16.5 46.0 63.1 74.2

2007 16.3 47.2 62.4 73.7

2008 15.9 45.9 59.7 72.6

2009 15.8 46.6 58.4 69.4
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2010 15.8 44.4 57.1 70.9

2011 14.9 42.4 54.7 71.0

2012 14.2 42.6 54.8 69.2

2013 14.3 43.4 53.8 70.2

These are the data for Figure 4: US per capita seafood consumption, 2000-2013: 

Fish and 

shellfish

2000 15.2

2001 14.7

2002 15.6

2003 16.3

2004 16.5

2005 16.2

2006 16.5

2007 16.3

2008 15.9

2009 15.8

2010 15.8

2011 14.9

2012 14.2

2013 14.3
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These are the data for Figure 5: Worldwide fish and seafood consumption, 2000-2013. 

lbs per capita/yr

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Fish, Seafood 14.9 15.4 15.3 15.4 15.4 15.9 15.8 16.4 16.4 16.3 16.5 16.6 16.7 16.5

These are the data for Figure 6: Channel catfish production, mt, 2004-2013: 

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

China 54061 87254 146146 204929 224471 223233 217303 205177 224132 247399

United States of America 285970 274664 258049 255781 233564 215887 217204 157942 154297 162558

Other 2769 4619 6301 7637.3 8595 10149.18 9406.99 6901.5 8605.3 9257.68

These are the data for Figure 7: Pangasius catfish production, metric tons, 2004-2013: 

Viet Nam 255,000 376,000 520,000 850,000 1,250,000 1,050,000 1,140,000 1,151,000 1,240,000 1,195,688 

Indonesia 23,962 32,575 31,488 36,755 102,021 109,685 127,668 229,267 347,000 410,883 

Other 15,325 19,202 23,754 25,884 36,525 52,148 77,054 53,259 62,547 65,254 

These are the data for Figure 8: US domestic production vs. imports of all species of catfish, 2001-2014, metric tons: 

Total 

imports 

Vietnam 

imports US production

2001 4,100.71 3,882.66 

2002 2,313.61 2,180.70 153,271.69 

2003 1,231.46 964.69 151,556.43 

2004 2,092.10 1,504.90 150,751.30 

2005 6,827.84 4,311.39 137,331.78 

2006 17,001.08 8,999.15 129,024.24 

2007 19,188.45 8,709.97 127,890.26 

2008 23,244.50 12,143.78 116,781.80 
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Total 

imports

Vietnam 

imports US production

2009 29,342.76 19,363.52 107,943.56 

2010 31,166.99 24,552.13 108,601.26 

2011 46,187.32 42,778.14 78,925.01 

2012 53,842.02 51,645.12 77,148.29 

2013 58,900.51 55,259.69 76,459.74 

2014 53,941.76 50,028.65 69,739.32 

2015 29,084.90 27,204.10 

These are the data for Figure 9: World channel and Pangasius catfish production, metric tons, 2004-2013: 

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Channel catfish 342,800 366,537 410,496 468,347 466,630 449,269 443,914 370,021 387,034 419,215 

Pangasius 294,287 427,777 575,242 912,639 1,388,546 1,211,833 1,344,722 1,433,526 1,649,547 1,671,825 

Total 637,087 794,314 985,738 1,380,986 1,855,176 1,661,102 1,788,636 1,803,547 2,036,582 2,091,039 
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These are the data for Figure 10: US farmer price received for catfish, 2000-2013: 

Year Month

Catfish 

$/lb

2000 Jan $0.74 

Feb $0.79 

Mar $0.79 

Apr $0.79 

May $0.79 

Jun $0.79 

Jul $0.76 

Aug $0.74 

Sep $0.73 

Oct $0.71 

Nov $0.70 

Dec $0.68 

2001 Jan $0.69 

Feb $0.70 

Mar $0.70 

Apr $0.69 

May $0.69 

Jun $0.67 

Jul $0.66 

Aug $0.62 

Sep $0.61 

Oct $0.60 

Nov $0.57 

Dec $0.55 

2002 Jan $0.55 

Feb $0.56 

Mar $0.57 

Apr $0.56 

May $0.57 

Jun $0.59 

Jul $0.59 

Aug $0.58 

Sep $0.58 

Oct $0.57 

Nov $0.56 

Dec $0.54 

2003 Jan $0.53 

Feb $0.54 
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Year Month

Catfish 

$/lb

Mar $0.59 

Apr $0.63 

May $0.62 

Jun $0.59 

Jul $0.56 

Aug $0.55 

Sep $0.56 

Oct $0.57 

Nov $0.61 

Dec $0.63 

2004 Jan $0.67 

Feb $0.70 

Mar $0.72 

Apr $0.73 

May $0.72 

Jun $0.69 

Jul $0.68 

Aug $0.68 

Sep $0.68 

Oct $0.70 

Nov $0.69 

Dec $0.69 

2005 Jan $0.73 

Feb $0.73 

Mar $0.73 

Apr $0.73 

May $0.72 

Jun $0.72 

Jul $0.72 

Aug $0.72 

Sep $0.72 

Oct $0.72 

Nov $0.72 

Dec $0.73 

2006 Jan $0.73 

Feb $0.73 

Mar $0.75 

Apr $0.79 

May $0.80 

Jun $0.81 

Jul $0.81 
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Year Month

Catfish 

$/lb

Aug $0.81 

Sep $0.83 

Oct $0.84 

Nov $0.84 

Dec $0.84 

2007 Jan $0.84 

Feb $0.84 

Mar $0.84 

Apr $0.84 

May $0.84 

Jun $0.82 

Jul $0.76 

Aug $0.73 

Sep $0.70 

Oct $0.68 

Nov $0.67 

Dec $0.65 

2008 Jan $0.66 

Feb $0.69 

Mar $0.74 

Apr $0.76 

May $0.78 

Jun $0.79 

Jul $0.82 

Aug $0.83 

Sep $0.83 

Oct $0.83 

Nov $0.82 

Dec $0.82 

2009 Jan $0.81 

Feb $0.77 

Mar $0.77 

Apr $0.76 

May $0.76 

Jun $0.76 

Jul $0.77 

Aug $0.77 

Sep $0.77 

Oct $0.77 

Nov $0.77 

Dec $0.76 
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Year Month

Catfish 

$/lb

2010 Jan $0.76 

Feb $0.77 

Mar $0.79 

Apr $0.80 

May $0.80 

Jun $0.79 

Jul $0.79 

Aug $0.79 

Sep $0.82 

Oct $0.83 

Nov $0.84 

Dec $0.86 

2011 Jan $0.93 

Feb $1.00 

Mar $1.08 

Apr $1.14 

May $1.17 

Jun $1.23 

Jul $1.25 

Aug $1.28 

Sep $1.28 

Oct $1.27 

Nov $1.26 

Dec $1.25 

2012 Jan $1.25 

Feb $1.23 

Mar $1.20 

Apr $1.17 

May $1.04 

Jun $0.93 

Jul $0.84 

Aug $0.80 

Sep $0.79 

Oct $0.80 

Nov $0.82 

Dec $0.83 

2013 Jan $0.82 

Feb $0.82 

Mar $0.87 

Apr $0.89 

May $0.93 
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Year Month

Catfish 

$/lb

Jun $0.97 

Jul $0.99 

Aug $1.03 

Sep $1.06 

Oct $1.11 

Nov $1.11 

Dec $1.10 

2014 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2015 Jan

Feb

Mar

Apr

May

Jun

Jul

These are the data for Figure 11: Catfish feed price per ton, 32% and 28% protein: 

Year Month

32% 

protein 

feed 

$/ton

28% 

protein 

feed 

$/ton

2000 Jan $196.00 $183.00 

Feb $195.00 $182.00 

Mar $203.00 $180.00 

Apr $204.00 $181.00 
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Year Month

32% 

protein 

feed 

$/ton

28% 

protein 

feed 

$/ton

May $211.00 $182.00 

Jun $208.00 $183.00 

Jul $199.00 $184.00 

Aug $192.00 $182.00 

Sep $200.00 $181.00 

Oct $201.00 $181.00 

Nov $199.00 $182.00 

Dec $205.00 $183.00 

2001 Jan $211.00 $200.00 

Feb $202.00 $192.00 

Mar $192.00 $190.00 

Apr $203.00 $192.00 

May $201.00 $192.00 

Jun $206.00 $196.00 

Jul $213.00 $202.00 

Aug $215.00 $205.00 

Sep $209.00 $199.00 

Oct $206.00 $197.00 

Nov $207.00 $199.00 

Dec $204.00 $197.00 

2002 Jan $204.00 $195.00 

Feb $201.00 $193.00 

Mar $205.00 $196.00 

Apr $208.00 $198.00 

May $204.00 $195.00 

Jun $204.00 $195.00 

Jul $222.00 $212.00 

Aug $229.00 $216.00 

Sep $225.00 $211.00 

Oct $225.00 $211.00 

Nov $220.00 $212.00 

Dec $220.00 $214.00 

2003 Jan $222.00 $216.00 

Feb $224.00 $215.00 

Mar $227.00 $218.00 

Apr $227.00 $219.00 

May $230.00 $221.00 

Jun $231.00 $222.00 

Jul $232.00 $222.00 
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Year Month 

32% 

protein 

feed 

$/ton

28% 

protein 

feed 

$/ton

Aug $230.00 $219.00 

Sep $241.00 $231.00 

Oct $243.00 $234.00 

Nov $263.00 $253.00 

Dec $263.00 $253.00 

2004 Jan $275.00 $264.00 

Feb $282.00 $265.00 

Mar $287.00 $276.00 

Apr $297.00 $296.00 

May $310.00 $298.00 

Jun $295.00 $284.00 

Jul $290.00 $278.00 

Aug $255.00 $247.00 

Sep $254.00 $245.00 

Oct $237.00 $229.00 

Nov $229.00 $221.00 

Dec $229.00 $221.00 

2005 Jan $224.00 $214.00 

Feb $222.00 $216.00 

Mar $227.00 $220.00 

Apr $228.00 $219.00 

May $230.00 $219.00 

Jun $236.00 $226.00 

Jul $247.00 $238.00 

Aug $239.00 $229.00 

Sep $241.00 $227.00 

Oct $232.00 $224.00 

Nov $230.00 $223.00 

Dec $240.00 $230.00 

2006 Jan $243.00 $235.00 

Feb $253.00 $237.00 

Mar $244.00 $231.00 

Apr $247.00 $232.00 

May $247.00 $233.00 

Jun $250.00 $233.00 

Jul $252.00 $237.00 

Aug $247.00 $232.00 

Sep $252.00 $237.00 

Oct $264.00 $250.00 
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Year Month

32% 

protein 

feed 

$/ton

28% 

protein 

feed 

$/ton

Nov $280.00 $268.00 

Dec $285.00 $272.00 

2007 Jan $276.00 $265.00 

Feb $291.00 $279.00 

Mar $293.00 $281.00 

Apr $273.00 $262.00 

May $268.00 $258.00 

Jun $276.00 $266.00 

Jul $279.00 $269.00 

Aug $273.00 $262.00 

Sep $291.00 $279.00 

Oct $306.00 $295.00 

Nov $310.00 $282.00 

Dec $334.00 $321.00 

2008 Jan $370.00 $356.00 

Feb $390.00 $376.00 

Mar $380.00 $361.00 

Apr $374.00 $356.00 

May $382.00 $367.00 

Jun $393.00 $377.00 

Jul $440.00 $426.00 

Aug $415.00 $402.00 

Sep $407.00 $393.00 

Oct $383.00 $365.00 

Nov $368.00 $346.00 

Dec $355.00 $343.00 

2009 Jan $362.00 $354.00 

Feb $355.00 $341.00 

Mar $332.00 $317.00 

Apr $353.00 $327.00 

May $377.00 $341.00 

Jun $395.00 $366.00 

Jul $385.00 $351.00 

Aug $379.00 $348.00 

Sep $380.00 $354.00 

Oct $357.00 $338.00 

Nov $363.00 $344.00 

Dec $369.00 $353.00 

2010 Jan $367.00 $346.00 
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Year Month 

32% 

protein 

feed 

$/ton

28% 

protein 

feed 

$/ton

Feb $347.00 $328.00 

Mar $334.00 $314.00 

Apr $330.00 $310.00 

May $330.00 $310.00 

Jun $338.00 $317.00 

Jul $346.00 $326.00 

Aug $356.00 $335.00 

Sep $361.00 $341.00 

Oct $366.00 $348.00 

Nov $376.00 $358.00 

Dec $388.00 $370.00 

2011 Jan $409.00 $392.00 

Feb $410.00 $394.00 

Mar $418.00 $400.00 

Apr $422.00 $403.00 

May $431.00 $411.00 

Jun $437.00 $418.00 

Jul $426.00 $407.00 

Aug $436.00 $417.00 

Sep $441.00 $422.00 

Oct $415.00 $396.00 

Nov $403.00 $386.00 

Dec $399.00 $381.00 

2012 Jan $401.00 $382.00 

Feb $401.00 $382.00 

Mar $423.00 $403.00 

Apr $420.00 $400.00 

May $446.00 $428.00 

Jun $455.00 $434.00 

Jul $499.00 $477.00 

Aug $562.00 $530.00 

Sep $524.00 $495.00 

Oct $505.00 $478.00 

Nov $498.00 $473.00 

Dec $494.00 $470.00 

2013 Jan $486.00 $461.00 

Feb $485.00 $458.00 

Mar $485.00 $458.00 

Apr $470.00 $447.00 
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Year Month

32% 

protein 

feed 

$/ton

28% 

protein 

feed 

$/ton

May $472.00 $445.00 

Jun $495.00 $467.00 

Jul $516.00 $494.00 

Aug $474.00 $442.00 

Sep $485.00 $452.00 

Oct $469.00 $435.00 

Nov $484.00 $425.00 

Dec $478.00 $444.00 

2014 Jan $474.00 $441.00 

Feb $479.00 $447.00 

Mar $505.00 $467.00 

Apr $515.00 $473.00 

May $509.00 $474.00 

Jun $501.00 $471.00 

Jul $474.00 $435.00 

Aug $465.00 $426.00 

Sep $506.00 $464.00 

Oct $448.00 $405.00 

Nov $450.00 $411.00 

Dec $457.00 $421.00 

2015 Jan $446.00 $408.00 

Feb $420.00 $388.00 

Mar $416.00 $384.00 

Apr $399.00 $368.00 

May $384.00 $354.00 

Jun

Jul

These are the counties for Map 1: 

In Arkansas: 

Lafayette 

Lonoke 

Chicot 
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In Mississippi: 

Warren 

Issaquena 

Yazoo 

Sharkey 

Washington 

Humphreys 

Holmes 

Bolivar 

Sunflower 

Leflore 

Carroll 

Coahoma 

Tallahatchie 

Grenada 

Quitman 

Tunica 

Panola 

Tate 

Kemper 

Noxubee 

Winston 

Choctaw 

Oktibbeha 

Lowndes 

Clay 

Chickasaw 

Monroe 

Lee 

In Alabama 

Pickens 

Greene 

Hale 

Perry 

Marengo 

These are the data for Figure 12: LGM and LRP policies earning premium, all species: 

LGM - SWINE LRP - SWINE LGM - Cattle LRP - Cattle

LRP -

Lamb

LGM -

Dairy

2003 108 250 - 41 - -

2004 246 105 - 525 - -

2005 260 120 - 950 - -

2006 196 115 127 1,036 - -

2007 131 64 66 479 - -

2008 125 39 32 715 339 -

2009 62 19 21 410 141 40 

2010 93 44 9 803 122 134 

2011 53 38 8 1,460 133 1,224 
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LGM - SWINE LRP - SWINE LGM - Cattle LRP - Cattle

LRP -

Lamb

LGM -

Dairy

2012 27 23 2 1,228 284 897 

2013 32 10 3 815 249 687 

2014 41 10 11 1,908 69 498 

2015 25 18 3 1,293 - 812 

These are the data for Figure 13: Loss ratios, all species, LRP & LGM 

Year LGM - Swine LRP - Swine LGM - Cattle LRP - Cattle LRP - Lamb LGM - Dairy

2003 57% 3% 0%

2004 209% 4% 15%

2005 60% 27% 0%

2006 67% 31% 25% 65%

2007 96% 52% 19% 58%

2008 103% 153% 130% 162% 121%

2009 274% 365% 37% 160% 215% 250%

2010 38% 17% 0% 48% 0% 36%

2011 48% 17% 10% 17% 162% 0%

2012 172% 47% 225% 115% 612% 7%

2013 48% 18% 88% 125% 640% 16%

2014 46% 53% 0% 0% 401% 5%

2015 123% 122% 0% 51%

These are the data for Figure 14: Average monthly catfish price paid to farmers, $/pound, 2000-2014: 

Year Month

Catfish 

$/lb

2000 Jan $0.74 

Feb $0.79 

Mar $0.79 

Apr $0.79 

May $0.79 

Jun $0.79 

Jul $0.76 

Aug $0.74 

Sep $0.73 

Oct $0.71 

Nov $0.70 

Dec $0.68 

2001 Jan $0.69 

Feb $0.70 

Mar $0.70 

Apr $0.69 

May $0.69 

Jun $0.67 
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Year Month

Catfish 

$/lb

Jul $0.66 

Aug $0.62 

Sep $0.61 

Oct $0.60 

Nov $0.57 

Dec $0.55 

2002 Jan $0.55 

Feb $0.56 

Mar $0.57 

Apr $0.56 

May $0.57 

Jun $0.59 

Jul $0.59 

Aug $0.58 

Sep $0.58 

Oct $0.57 

Nov $0.56 

Dec $0.54 

2003 Jan $0.53 

Feb $0.54 

Mar $0.59 

Apr $0.63 

May $0.62 

Jun $0.59 

Jul $0.56 

Aug $0.55 

Sep $0.56 

Oct $0.57 

Nov $0.61 

Dec $0.63 

2004 Jan $0.67 

Feb $0.70 

Mar $0.72 

Apr $0.73 

May $0.72 

Jun $0.69 

Jul $0.68 

Aug $0.68 

Sep $0.68 

Oct $0.70 

Nov $0.69 
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Year Month

Catfish 

$/lb

Dec $0.69 

2005 Jan $0.73 

Feb $0.73 

Mar $0.73 

Apr $0.73 

May $0.72 

Jun $0.72 

Jul $0.72 

Aug $0.72 

Sep $0.72 

Oct $0.72 

Nov $0.72 

Dec $0.73 

2006 Jan $0.73 

Feb $0.73 

Mar $0.75 

Apr $0.79 

May $0.80 

Jun $0.81 

Jul $0.81 

Aug $0.81 

Sep $0.83 

Oct $0.84 

Nov $0.84 

Dec $0.84 

2007 Jan $0.84 

Feb $0.84 

Mar $0.84 

Apr $0.84 

May $0.84 

Jun $0.82 

Jul $0.76 

Aug $0.73 

Sep $0.70 

Oct $0.68 

Nov $0.67 

Dec $0.65 

2008 Jan $0.66 

Feb $0.69 

Mar $0.74 

Apr $0.76 
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Year Month

Catfish 

$/lb

May $0.78 

Jun $0.79 

Jul $0.82 

Aug $0.83 

Sep $0.83 

Oct $0.83 

Nov $0.82 

Dec $0.82 

2009 Jan $0.81 

Feb $0.77 

Mar $0.77 

Apr $0.76 

May $0.76 

Jun $0.76 

Jul $0.77 

Aug $0.77 

Sep $0.77 

Oct $0.77 

Nov $0.77 

Dec $0.76 

2010 Jan $0.76 

Feb $0.77 

Mar $0.79 

Apr $0.80 

May $0.80 

Jun $0.79 

Jul $0.79 

Aug $0.79 

Sep $0.82 

Oct $0.83 

Nov $0.84 

Dec $0.86 

2011 Jan $0.93 

Feb $1.00 

Mar $1.08 

Apr $1.14 

May $1.17 

Jun $1.23 

Jul $1.25 

Aug $1.28 

Sep $1.28 
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Year Month

Catfish 

$/lb

Oct $1.27 

Nov $1.26 

Dec $1.25 

2012 Jan $1.25 

Feb $1.23 

Mar $1.20 

Apr $1.17 

May $1.04 

Jun $0.93 

Jul $0.84 

Aug $0.80 

Sep $0.79 

Oct $0.80 

Nov $0.82 

Dec $0.83 

2013 Jan $0.82 

Feb $0.82 

Mar $0.87 

Apr $0.89 

May $0.93 

Jun $0.97 

Jul $0.99 

Aug $1.03 

Sep $1.06 

Oct $1.11 

Nov $1.11 

Dec $1.10 

2014 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2015 Jan

Feb
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Year Month

Catfish 

$/lb

Mar

Apr

May

Jun

Jul

These are the data for Figure 15: Average monthly catfish feed price, $/ton, 2000-2014: 

Year Month

32% 

protein 

feed 

$/ton

28% 

protein 

feed 

$/ton

2000 Jan $196.00 $183.00 

Feb $195.00 $182.00 

Mar $203.00 $180.00 

Apr $204.00 $181.00 

May $211.00 $182.00 

Jun $208.00 $183.00 

Jul $199.00 $184.00 

Aug $192.00 $182.00 

Sep $200.00 $181.00 

Oct $201.00 $181.00 

Nov $199.00 $182.00 

Dec $205.00 $183.00 

2001 Jan $211.00 $200.00 

Feb $202.00 $192.00 

Mar $192.00 $190.00 

Apr $203.00 $192.00 

May $201.00 $192.00 

Jun $206.00 $196.00 

Jul $213.00 $202.00 

Aug $215.00 $205.00 

Sep $209.00 $199.00 

Oct $206.00 $197.00 

Nov $207.00 $199.00 

Dec $204.00 $197.00 

2002 Jan $204.00 $195.00 
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Year Month

32% 

protein 

feed 

$/ton

28% 

protein 

feed 

$/ton

Feb $201.00 $193.00 

Mar $205.00 $196.00 

Apr $208.00 $198.00 

May $204.00 $195.00 

Jun $204.00 $195.00 

Jul $222.00 $212.00 

Aug $229.00 $216.00 

Sep $225.00 $211.00 

Oct $225.00 $211.00 

Nov $220.00 $212.00 

Dec $220.00 $214.00 

2003 Jan $222.00 $216.00 

Feb $224.00 $215.00 

Mar $227.00 $218.00 

Apr $227.00 $219.00 

May $230.00 $221.00 

Jun $231.00 $222.00 

Jul $232.00 $222.00 

Aug $230.00 $219.00 

Sep $241.00 $231.00 

Oct $243.00 $234.00 

Nov $263.00 $253.00 

Dec $263.00 $253.00 

2004 Jan $275.00 $264.00 

Feb $282.00 $265.00 

Mar $287.00 $276.00 

Apr $297.00 $296.00 

May $310.00 $298.00 

Jun $295.00 $284.00 

Jul $290.00 $278.00 

Aug $255.00 $247.00 

Sep $254.00 $245.00 

Oct $237.00 $229.00 

Nov $229.00 $221.00 

Dec $229.00 $221.00 

2005 Jan $224.00 $214.00 

Feb $222.00 $216.00 

Mar $227.00 $220.00 

Apr $228.00 $219.00 
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Year Month 

32% 

protein 

feed 

$/ton

28% 

protein 

feed 

$/ton

May $230.00 $219.00 

Jun $236.00 $226.00 

Jul $247.00 $238.00 

Aug $239.00 $229.00 

Sep $241.00 $227.00 

Oct $232.00 $224.00 

Nov $230.00 $223.00 

Dec $240.00 $230.00 

2006 Jan $243.00 $235.00 

Feb $253.00 $237.00 

Mar $244.00 $231.00 

Apr $247.00 $232.00 

May $247.00 $233.00 

Jun $250.00 $233.00 

Jul $252.00 $237.00 

Aug $247.00 $232.00 

Sep $252.00 $237.00 

Oct $264.00 $250.00 

Nov $280.00 $268.00 

Dec $285.00 $272.00 

2007 Jan $276.00 $265.00 

Feb $291.00 $279.00 

Mar $293.00 $281.00 

Apr $273.00 $262.00 

May $268.00 $258.00 

Jun $276.00 $266.00 

Jul $279.00 $269.00 

Aug $273.00 $262.00 

Sep $291.00 $279.00 

Oct $306.00 $295.00 

Nov $310.00 $282.00 

Dec $334.00 $321.00 

2008 Jan $370.00 $356.00 

Feb $390.00 $376.00 

Mar $380.00 $361.00 

Apr $374.00 $356.00 

May $382.00 $367.00 

Jun $393.00 $377.00 

Jul $440.00 $426.00 
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Year Month

32% 

protein 

feed 

$/ton

28% 

protein 

feed 

$/ton

Aug $415.00 $402.00 

Sep $407.00 $393.00 

Oct $383.00 $365.00 

Nov $368.00 $346.00 

Dec $355.00 $343.00 

2009 Jan $362.00 $354.00 

Feb $355.00 $341.00 

Mar $332.00 $317.00 

Apr $353.00 $327.00 

May $377.00 $341.00 

Jun $395.00 $366.00 

Jul $385.00 $351.00 

Aug $379.00 $348.00 

Sep $380.00 $354.00 

Oct $357.00 $338.00 

Nov $363.00 $344.00 

Dec $369.00 $353.00 

2010 Jan $367.00 $346.00 

Feb $347.00 $328.00 

Mar $334.00 $314.00 

Apr $330.00 $310.00 

May $330.00 $310.00 

Jun $338.00 $317.00 

Jul $346.00 $326.00 

Aug $356.00 $335.00 

Sep $361.00 $341.00 

Oct $366.00 $348.00 

Nov $376.00 $358.00 

Dec $388.00 $370.00 

2011 Jan $409.00 $392.00 

Feb $410.00 $394.00 

Mar $418.00 $400.00 

Apr $422.00 $403.00 

May $431.00 $411.00 

Jun $437.00 $418.00 

Jul $426.00 $407.00 

Aug $436.00 $417.00 

Sep $441.00 $422.00 

Oct $415.00 $396.00 
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Year Month 

32% 

protein 

feed 

$/ton

28% 

protein 

feed 

$/ton

Nov $403.00 $386.00 

Dec $399.00 $381.00 

2012 Jan $401.00 $382.00 

Feb $401.00 $382.00 

Mar $423.00 $403.00 

Apr $420.00 $400.00 

May $446.00 $428.00 

Jun $455.00 $434.00 

Jul $499.00 $477.00 

Aug $562.00 $530.00 

Sep $524.00 $495.00 

Oct $505.00 $478.00 

Nov $498.00 $473.00 

Dec $494.00 $470.00 

2013 Jan $486.00 $461.00 

Feb $485.00 $458.00 

Mar $485.00 $458.00 

Apr $470.00 $447.00 

May $472.00 $445.00 

Jun $495.00 $467.00 

Jul $516.00 $494.00 

Aug $474.00 $442.00 

Sep $485.00 $452.00 

Oct $469.00 $435.00 

Nov $484.00 $425.00 

Dec $478.00 $444.00 

2014 Jan $474.00 $441.00 

Feb $479.00 $447.00 

Mar $505.00 $467.00 

Apr $515.00 $473.00 

May $509.00 $474.00 

Jun $501.00 $471.00 

Jul $474.00 $435.00 

Aug $465.00 $426.00 

Sep $506.00 $464.00 

Oct $448.00 $405.00 

Nov $450.00 $411.00 

Dec $457.00 $421.00 

2015 Jan $446.00 $408.00 
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Year Month

32% 

protein 

feed 

$/ton

28% 

protein 

feed 

$/ton

Feb $420.00 $388.00 

Mar $416.00 $384.00 

Apr $399.00 $368.00 

May $384.00 $354.00 

Jun

Jul

These are the data for Figure 16: Estimated non-key ingredient costs as a percentage of total cost, 2000-

2014:

Year Month Margin %

2000

Mar 41%

Jun 43%

Sep 42%

Dec 33%

2001 Mar 44%

Jun 45%

Sep 43%

Dec 45%

2002 Mar 45%

Jun 45%

Sep 42%

Dec 45%

2003 Mar 46%

Jun 45%

Sep 41%

Dec 38%

2004 Mar 53%
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Year Month Margin %

Jun 37%

Sep 54%

Dec 53%

2005 Mar 48%

Jun 46%

Sep 53%

Dec 45%

2006 Mar 49%

Jun 51%

Sep 54%

Dec 49%

2007 Mar 47%

Jun 46%

Sep 41%

Dec 33%

2008 Mar 38%

Jun 35%

Sep 40%

Dec 46%

2009 Mar 43%

Jun 35%

Sep 41%

Dec 41%

2010 Mar 46%

Jun 44%

Sep 39%

Dec 34%

2011 Mar 39%

Jun 39%

Sep 37%

Dec 40%

2012 Mar 38%

Jun 35%

Sep 27%

Dec 32%

2013 Mar 32%

Jun 32%

Sep 33%

Dec 29%
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Year Month Margin %

2014 Mar 34%

Jun 38%

Sep 38%

Dec 37%

2015 Mar

Jun

Sep

Dec

These are the data for Figure 17: Estimated feed ration cost and actual feed prices, 2000 – 2014: 

Year Month

30% 

ration 

estimate, 

$/ton

30% 

actual 

feed 

price, 

$/ton

2000 Mar $180.14 $191.50 

Jun $177.61 $195.50 

Sep $175.88 $190.50 

Dec $206.12 $194.00 

2001 Mar $168.23 $191.00 

Jun $175.85 $201.00 

Sep $184.74 $204.00 

Dec $175.91 $200.50 

2002 Mar $174.42 $200.50 

Jun $174.31 $199.50 

Sep $201.00 $218.00 

Dec $187.55 $217.00 

2003 Mar $190.44 $222.50 

Jun $196.87 $226.50 

Sep $221.91 $236.00 

Dec $251.69 $258.00 

2004 Mar $208.99 $281.50 

Jun $287.91 $289.50 

Sep $181.13 $249.50 

Dec $167.49 $225.00 

2005 Mar $182.79 $223.50 

Jun $198.16 $231.00 

Sep $173.29 $234.00 

Dec $203.42 $235.00 
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Year Month

30% 

ration 

estimate, 

$/ton

30% 

actual 

feed 

price, 

$/ton

2006 Mar $190.36 $237.50 

Jun $185.93 $241.50 

Sep $180.00 $244.50 

Dec $224.53 $278.50 

2007 Mar $239.50 $287.00 

Jun $234.19 $271.00 

Sep $267.44 $285.00 

Dec $347.98 $327.50 

2008 Mar $364.71 $370.50 

Jun $396.36 $385.00 

Sep $378.49 $400.00 

Dec $301.52 $349.00 

2009 Mar $294.29 $324.50 

Jun $392.02 $380.50 

Sep $344.51 $367.00 

Dec $339.61 $361.00 

2010 Mar $279.27 $324.00 

Jun $289.47 $327.50 

Sep $341.01 $351.00 

Dec $395.51 $379.00 

2011 Mar $397.52 $409.00 

Jun $410.95 $427.50 

Sep $432.50 $431.50 

Dec $372.18 $390.00 

2012 Mar $404.42 $413.00 

Jun $454.85 $444.50 

Sep $589.08 $509.50 

Dec $522.04 $482.00 

2013 Mar $510.62 $471.50 

Jun $516.46 $481.00 

Sep $499.63 $468.50 

Dec $519.31 $461.00 

2014 Mar $507.40 $486.00 

Jun $478.54 $486.00 

Sep $476.97 $485.00 

Dec $435.72 $439.00 

2015 Mar $400.00 

Jun

Sep
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Year Month

30% 

ration 

estimate, 

$/ton

30% 

actual 

feed 

price, 

$/ton

Dec

These are the data for Figure 18: Error of the estimated feed ration vs. actual prices: 

Year Month

30% 

ration

estimate, 

$/ton

30% 

actual 

feed 

price, 

$/ton

(Estimate -

actual) / 

estimated= 

Error

2000 Mar $180.14 $191.50 6.30%

Jun $177.61 $195.50 10.07%

Sep $175.88 $190.50 8.31%

Dec $206.12 $194.00 -5.88%

2001 Mar $168.23 $191.00 13.53%

Jun $175.85 $201.00 14.30%

Sep $184.74 $204.00 10.42%

Dec $175.91 $200.50 13.98%

2002 Mar $174.42 $200.50 14.95%

Jun $174.31 $199.50 14.45%

Sep $201.00 $218.00 8.46%

Dec $187.55 $217.00 15.70%

2003 Mar $190.44 $222.50 16.84%

Jun $196.87 $226.50 15.05%

Sep $221.91 $236.00 6.35%

Dec $251.69 $258.00 2.51%

2004 Mar $208.99 $281.50 34.70%

Jun $287.91 $289.50 0.55%

Sep $181.13 $249.50 37.75%

Dec $167.49 $225.00 34.34%

2005 Mar $182.79 $223.50 22.27%

Jun $198.16 $231.00 16.57%

Sep $173.29 $234.00 35.03%

Dec $203.42 $235.00 15.52%

2006 Mar $190.36 $237.50 24.77%

Jun $185.93 $241.50 29.89%

Sep $180.00 $244.50 35.83%

Dec $224.53 $278.50 24.04%

2007 Mar $239.50 $287.00 19.83%

Jun $234.19 $271.00 15.72%

Sep $267.44 $285.00 6.57%
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Year Month

30% 

ration

estimate, 

$/ton

30% 

actual 

feed 

price, 

$/ton

(Estimate - 

actual) / 

estimated= 

Error

Dec $347.98 $327.50 -5.89%

2008 Mar $364.71 $370.50 1.59%

Jun $396.36 $385.00 -2.87%

Sep $378.49 $400.00 5.68%

Dec $301.52 $349.00 15.75%

2009 Mar $294.29 $324.50 10.27%

Jun $392.02 $380.50 -2.94%

Sep $344.51 $367.00 6.53%

Dec $339.61 $361.00 6.30%

2010 Mar $279.27 $324.00 16.02%

Jun $289.47 $327.50 13.14%

Sep $341.01 $351.00 2.93%

Dec $395.51 $379.00 -4.17%

2011 Mar $397.52 $409.00 2.89%

Jun $410.95 $427.50 4.03%

Sep $432.50 $431.50 -0.23%

Dec $372.18 $390.00 4.79%

2012 Mar $404.42 $413.00 2.12%

Jun $454.85 $444.50 -2.28%

Sep $589.08 $509.50 -13.51%

Dec $522.04 $482.00 -7.67%

2013 Mar $510.62 $471.50 -7.66%

Jun $516.46 $481.00 -6.87%

Sep $499.63 $468.50 -6.23%

Dec $519.31 $461.00 -11.23%

2014 Mar $507.40 $486.00 -4.22%

Jun $478.54 $486.00 1.56%

Sep $476.97 $485.00 1.68%

Dec $435.72 $439.00 0.75%

2015 Mar $400.00 

Jun

Sep

Dec

These are the data for Figure 19: Catfish price and feed costs, per pound of fish sold: 
Insurance Program Development for Catfish Margin Protection 

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Catfish 

price 

$/lb

Feed 

costs per 

lb of 

fish, FCR 

2.4

1/1/2000 $0.74 $-

2/1/2000 $0.79 $-

3/1/2000 $0.79 $-

4/1/2000 $0.79 $-

5/1/2000 $0.79 $-

6/1/2000 $0.79 $-

7/1/2000 $0.76 $-

8/1/2000 $0.74 $-

9/1/2000 $0.73 $-

10/1/2000 $0.71 $-

11/1/2000 $0.70 $-

12/1/2000 $0.68 $-

1/1/2001 $0.69 $-

2/1/2001 $0.70 $-

3/1/2001 $0.70 $-

4/1/2001 $0.69 $-

5/1/2001 $0.69 $-

6/1/2001 $0.67 $-

7/1/2001 $0.66 $-

8/1/2001 $0.62 $-

9/1/2001 $0.61 $-

10/1/2001 $0.60 $-

11/1/2001 $0.57 $-

12/1/2001 $0.55 $-

1/1/2002 $0.55 $-

2/1/2002 $0.56 $-

3/1/2002 $0.57 $-

4/1/2002 $0.56 $-

5/1/2002 $0.57 $-

6/1/2002 $0.59 $-

7/1/2002 $0.59 $-

8/1/2002 $0.58 $-

9/1/2002 $0.58 $-

10/1/2002 $0.57 $-

11/1/2002 $0.56 $-

12/1/2002 $0.54 $-

1/1/2003 $0.53 $-

2/1/2003 $0.54 $-

3/1/2003 $0.59 $-
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Catfish 

price 

$/lb

Feed 

costs per 

lb of 

fish, FCR 

2.4

4/1/2003 $0.63 $-

5/1/2003 $0.62 $-

6/1/2003 $0.59 $-

7/1/2003 $0.56 $-

8/1/2003 $0.55 $-

9/1/2003 $0.56 $-

10/1/2003 $0.57 $-

11/1/2003 $0.61 $-

12/1/2003 $0.63 $-

1/1/2004 $0.67 $-

2/1/2004 $0.70 $-

3/1/2004 $0.72 $-

4/1/2004 $0.73 $-

5/1/2004 $0.72 $-

6/1/2004 $0.69 $-

7/1/2004 $0.68 $-

8/1/2004 $0.68 $-

9/1/2004 $0.68 $-

10/1/2004 $0.70 $-

11/1/2004 $0.69 $-

12/1/2004 $0.69 $-

1/1/2005 $0.73 $-

2/1/2005 $0.73 $-

3/1/2005 $0.73 $-

4/1/2005 $0.73 $-

5/1/2005 $0.72 $-

6/1/2005 $0.72 $-

7/1/2005 $0.72 $-

8/1/2005 $0.72 $-

9/1/2005 $0.72 $-

10/1/2005 $0.72 $-

11/1/2005 $0.72 $-

12/1/2005 $0.73 $-

1/1/2006 $0.73 $-

2/1/2006 $0.73 $-

3/1/2006 $0.75 $-

4/1/2006 $0.79 $-

5/1/2006 $0.80 $-

6/1/2006 $0.81 $-
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Catfish 

price 

$/lb

Feed 

costs per 

lb of 

fish, FCR 

2.4

7/1/2006 $0.81 $-

8/1/2006 $0.81 $-

9/1/2006 $0.83 $-

10/1/2006 $0.84 $-

11/1/2006 $0.84 $-

12/1/2006 $0.84 $-

1/1/2007 $0.84 $-

2/1/2007 $0.84 $-

3/1/2007 $0.84 $-

4/1/2007 $0.84 $-

5/1/2007 $0.84 $-

6/1/2007 $0.82 $-

7/1/2007 $0.76 $-

8/1/2007 $0.73 $-

9/1/2007 $0.70 $-

10/1/2007 $0.68 $-

11/1/2007 $0.67 $-

12/1/2007 $0.65 $-

1/1/2008 $0.66 $-

2/1/2008 $0.69 $-

3/1/2008 $0.74 $-

4/1/2008 $0.76 $-

5/1/2008 $0.78 $-

6/1/2008 $0.79 $-

7/1/2008 $0.82 $-

8/1/2008 $0.83 $-

9/1/2008 $0.83 $-

10/1/2008 $0.83 $-

11/1/2008 $0.82 $-

12/1/2008 $0.82 $-

1/1/2009 $0.81 $-

2/1/2009 $0.77 $-

3/1/2009 $0.77 $-

4/1/2009 $0.76 $-

5/1/2009 $0.76 $-

6/1/2009 $0.76 $-

7/1/2009 $0.77 $-

8/1/2009 $0.77 $-

9/1/2009 $0.77 $-
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Catfish 

price 

$/lb

Feed 

costs per 

lb of 

fish, FCR 

2.4

10/1/2009 $0.77 $-

11/1/2009 $0.77 $-

12/1/2009 $0.76 $-

1/1/2010 $0.76 $-

2/1/2010 $0.77 $-

3/1/2010 $0.79 $-

4/1/2010 $0.80 $-

5/1/2010 $0.80 $-

6/1/2010 $0.79 $-

7/1/2010 $0.79 $-

8/1/2010 $0.79 $-

9/1/2010 $0.82 $-

10/1/2010 $0.83 $-

11/1/2010 $0.84 $-

12/1/2010 $0.86 $-

1/1/2011 $0.93 $-

2/1/2011 $1.00 $-

3/1/2011 $1.08 $-

4/1/2011 $1.14 $-

5/1/2011 $1.17 $-

6/1/2011 $1.23 $-

7/1/2011 $1.25 $-

8/1/2011 $1.28 $-

9/1/2011 $1.28 $-

10/1/2011 $1.27 $-

11/1/2011 $1.26 $-

12/1/2011 $1.25 $-

1/1/2012 $1.25 $-

2/1/2012 $1.23 $-

3/1/2012 $1.20 $-

4/1/2012 $1.17 $-

5/1/2012 $1.04 $-

6/1/2012 $0.93 $-

7/1/2012 $0.84 $-

8/1/2012 $0.80 $-

9/1/2012 $0.79 $-

10/1/2012 $0.80 $-

11/1/2012 $0.82 $-

12/1/2012 $0.83 $-
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Catfish 

price 

$/lb

Feed 

costs per 

lb of 

fish, FCR 

2.4

1/1/2013 $0.82 $-

2/1/2013 $0.82 $-

3/1/2013 $0.87 $-

4/1/2013 $0.89 $-

5/1/2013 $0.93 $-

6/1/2013 $0.97 $-

7/1/2013 $0.99 $-

8/1/2013 $1.03 $-

9/1/2013 $1.06 $-

10/1/2013 $1.11 $-

11/1/2013 $1.11 $-

12/1/2013 $1.10 $-

1/1/2014 $1.10 $-

2/1/2014 $1.13 $-

3/1/2014 $1.15 $-

4/1/2014 $1.17 $-

5/1/2014 $1.19 $-

6/1/2014 $1.20 $-

7/1/2014 $1.20 $-

8/1/2014 $1.20 $-

9/1/2014 $1.19 $-

10/1/2014 $1.19 $-

11/1/2014 $1.16 $-

12/1/2014 $1.14 $-

1/1/2015 $1.14 $-

2/1/2015 $1.14 $-

3/1/2015 $1.13 $-

4/1/2015 $1.13 $-

5/1/2015

6/1/2015

These are the data for Figure 20: Catfish producer margin, fish price minus feed costs: 

Catfish 

price 

minus 

Feed 

cost

1/1/2000 $0.74 

2/1/2000 $0.79 
Insurance Program Development for Catfish Margin Protection 

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Catfish 

price 

minus 

Feed 

cost

3/1/2000 $0.79 

4/1/2000 $0.79 

5/1/2000 $0.79 

6/1/2000 $0.79 

7/1/2000 $0.76 

8/1/2000 $0.74 

9/1/2000 $0.73 

10/1/2000 $0.71 

11/1/2000 $0.70 

12/1/2000 $0.68 

1/1/2001 $0.69 

2/1/2001 $0.70 

3/1/2001 $0.70 

4/1/2001 $0.69 

5/1/2001 $0.69 

6/1/2001 $0.67 

7/1/2001 $0.66 

8/1/2001 $0.62 

9/1/2001 $0.61 

10/1/2001 $0.60 

11/1/2001 $0.57 

12/1/2001 $0.55 

1/1/2002 $0.55 

2/1/2002 $0.56 

3/1/2002 $0.57 

4/1/2002 $0.56 

5/1/2002 $0.57 

6/1/2002 $0.59 

7/1/2002 $0.59 

8/1/2002 $0.58 

9/1/2002 $0.58 

10/1/2002 $0.57 

11/1/2002 $0.56 

12/1/2002 $0.54 

1/1/2003 $0.53 

2/1/2003 $0.54 

3/1/2003 $0.59 

4/1/2003 $0.63 

5/1/2003 $0.62 
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Catfish 

price 

minus 

Feed 

cost

6/1/2003 $0.59 

7/1/2003 $0.56 

8/1/2003 $0.55 

9/1/2003 $0.56 

10/1/2003 $0.57 

11/1/2003 $0.61 

12/1/2003 $0.63 

1/1/2004 $0.67 

2/1/2004 $0.70 

3/1/2004 $0.72 

4/1/2004 $0.73 

5/1/2004 $0.72 

6/1/2004 $0.69 

7/1/2004 $0.68 

8/1/2004 $0.68 

9/1/2004 $0.68 

10/1/2004 $0.70 

11/1/2004 $0.69 

12/1/2004 $0.69 

1/1/2005 $0.73 

2/1/2005 $0.73 

3/1/2005 $0.73 

4/1/2005 $0.73 

5/1/2005 $0.72 

6/1/2005 $0.72 

7/1/2005 $0.72 

8/1/2005 $0.72 

9/1/2005 $0.72 

10/1/2005 $0.72 

11/1/2005 $0.72 

12/1/2005 $0.73 

1/1/2006 $0.73 

2/1/2006 $0.73 

3/1/2006 $0.75 

4/1/2006 $0.79 

5/1/2006 $0.80 

6/1/2006 $0.81 

7/1/2006 $0.81 

8/1/2006 $0.81 
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Catfish 

price 

minus 

Feed 

cost

9/1/2006 $0.83 

10/1/2006 $0.84 

11/1/2006 $0.84 

12/1/2006 $0.84 

1/1/2007 $0.84 

2/1/2007 $0.84 

3/1/2007 $0.84 

4/1/2007 $0.84 

5/1/2007 $0.84 

6/1/2007 $0.82 

7/1/2007 $0.76 

8/1/2007 $0.73 

9/1/2007 $0.70 

10/1/2007 $0.68 

11/1/2007 $0.67 

12/1/2007 $0.65 

1/1/2008 $0.66 

2/1/2008 $0.69 

3/1/2008 $0.74 

4/1/2008 $0.76 

5/1/2008 $0.78 

6/1/2008 $0.79 

7/1/2008 $0.82 

8/1/2008 $0.83 

9/1/2008 $0.83 

10/1/2008 $0.83 

11/1/2008 $0.82 

12/1/2008 $0.82 

1/1/2009 $0.81 

2/1/2009 $0.77 

3/1/2009 $0.77 

4/1/2009 $0.76 

5/1/2009 $0.76 

6/1/2009 $0.76 

7/1/2009 $0.77 

8/1/2009 $0.77 

9/1/2009 $0.77 

10/1/2009 $0.77 

11/1/2009 $0.77 
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Catfish 

price 

minus 

Feed 

cost

12/1/2009 $0.76 

1/1/2010 $0.76 

2/1/2010 $0.77 

3/1/2010 $0.79 

4/1/2010 $0.80 

5/1/2010 $0.80 

6/1/2010 $0.79 

7/1/2010 $0.79 

8/1/2010 $0.79 

9/1/2010 $0.82 

10/1/2010 $0.83 

11/1/2010 $0.84 

12/1/2010 $0.86 

1/1/2011 $0.93 

2/1/2011 $1.00 

3/1/2011 $1.08 

4/1/2011 $1.14 

5/1/2011 $1.17 

6/1/2011 $1.23 

7/1/2011 $1.25 

8/1/2011 $1.28 

9/1/2011 $1.28 

10/1/2011 $1.27 

11/1/2011 $1.26 

12/1/2011 $1.25 

1/1/2012 $1.25 

2/1/2012 $1.23 

3/1/2012 $1.20 

4/1/2012 $1.17 

5/1/2012 $1.04 

6/1/2012 $0.93 

7/1/2012 $0.84 

8/1/2012 $0.80 

9/1/2012 $0.79 

10/1/2012 $0.80 

11/1/2012 $0.82 

12/1/2012 $0.83 

1/1/2013 $0.82 

2/1/2013 $0.82 
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Catfish 

price 

minus 

Feed 

cost

3/1/2013 $0.87 

4/1/2013 $0.89 

5/1/2013 $0.93 

6/1/2013 $0.97 

7/1/2013 $0.99 

8/1/2013 $1.03 

9/1/2013 $1.06 

10/1/2013 $1.11 

11/1/2013 $1.11 

12/1/2013 $1.10 

1/1/2014 $1.10 

2/1/2014 $1.13 

3/1/2014 $1.15 

4/1/2014 $1.17 

5/1/2014 $1.19 

6/1/2014 $1.20 

7/1/2014 $1.20 

8/1/2014 $1.20 

9/1/2014 $1.19 

10/1/2014 $1.19 

11/1/2014 $1.16 

12/1/2014 $1.14 

1/1/2015 $1.14 

2/1/2015 $1.14 

3/1/2015 $1.13 

4/1/2015 $1.13 

5/1/2015

6/1/2015

These are the data for Figure 21: Lagged catfish price forecast models: 

Year Month

Forecasted 

6 month 

lag

Forecasted 

one-year 

lag

2000 Jan

Feb

Mar

Apr

May
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Year Month

Forecasted 

6 month 

lag

Forecasted 

one-year 

lag

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2001 Jan

Feb

Mar

Apr

May

Jun

Jul $ 0.75 

Aug $ 0.75 

Sep $ 0.74 

Oct $ 0.73 

Nov $ 0.72 

Dec $ 0.71 

2002 Jan $ 0.70 $ 0.75 

Feb $ 0.70 $ 0.75 

Mar $ 0.69 $ 0.74 

Apr $ 0.68 $ 0.73 

May $ 0.67 $ 0.72 

Jun $ 0.66 $ 0.71 

Jul $ 0.65 $ 0.70 

Aug $ 0.63 $ 0.70 

Sep $ 0.62 $ 0.69 

Oct $ 0.61 $ 0.68 

Nov $ 0.60 $ 0.67 

Dec $ 0.59 $ 0.66 

2003 Jan $ 0.58 $ 0.65 

Feb $ 0.58 $ 0.63 

Mar $ 0.57 $ 0.62 

Apr $ 0.57 $ 0.61 

May $ 0.57 $ 0.60 

Jun $ 0.57 $ 0.59 

Jul $ 0.57 $ 0.58 

Aug $ 0.57 $ 0.58 

Sep $ 0.57 $ 0.57 
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Year Month

Forecasted 

6 month 

lag

Forecasted 

one-year 

lag

Oct $ 0.57 $ 0.57 

Nov $ 0.57 $ 0.57 

Dec $ 0.58 $ 0.57 

2004 Jan $ 0.58 $ 0.57 

Feb $ 0.57 $ 0.57 

Mar $ 0.57 $ 0.57 

Apr $ 0.57 $ 0.57 

May $ 0.57 $ 0.57 

Jun $ 0.57 $ 0.58 

Jul $ 0.58 $ 0.58 

Aug $ 0.59 $ 0.57 

Sep $ 0.61 $ 0.57 

Oct $ 0.62 $ 0.57 

Nov $ 0.63 $ 0.57 

Dec $ 0.63 $ 0.57 

2005 Jan $ 0.64 $ 0.58 

Feb $ 0.65 $ 0.59 

Mar $ 0.66 $ 0.61 

Apr $ 0.67 $ 0.62 

May $ 0.68 $ 0.63 

Jun $ 0.69 $ 0.63 

Jul $ 0.70 $ 0.64 

Aug $ 0.70 $ 0.65 

Sep $ 0.70 $ 0.66 

Oct $ 0.70 $ 0.67 

Nov $ 0.70 $ 0.68 

Dec $ 0.70 $ 0.69 

2006 Jan $ 0.71 $ 0.70 

Feb $ 0.71 $ 0.70 

Mar $ 0.71 $ 0.70 

Apr $ 0.72 $ 0.70 

May $ 0.72 $ 0.70 

Jun $ 0.72 $ 0.70 

Jul $ 0.73 $ 0.71 

Aug $ 0.73 $ 0.71 

Sep $ 0.73 $ 0.71 

Oct $ 0.73 $ 0.72 

Nov $ 0.73 $ 0.72 

Dec $ 0.74 $ 0.72 

2007 Jan $ 0.74 $ 0.73 
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Year Month

Forecasted 

6 month 

lag

Forecasted 

one-year 

lag

Feb $ 0.75 $ 0.73 

Mar $ 0.76 $ 0.73 

Apr $ 0.77 $ 0.73 

May $ 0.78 $ 0.73 

Jun $ 0.79 $ 0.74 

Jul $ 0.80 $ 0.74 

Aug $ 0.81 $ 0.75 

Sep $ 0.81 $ 0.76 

Oct $ 0.82 $ 0.77 

Nov $ 0.83 $ 0.78 

Dec $ 0.83 $ 0.79 

2008 Jan $ 0.83 $ 0.80 

Feb $ 0.83 $ 0.81 

Mar $ 0.82 $ 0.81 

Apr $ 0.81 $ 0.82 

May $ 0.80 $ 0.83 

Jun $ 0.78 $ 0.83 

Jul $ 0.77 $ 0.83 

Aug $ 0.75 $ 0.83 

Sep $ 0.74 $ 0.82 

Oct $ 0.73 $ 0.81 

Nov $ 0.72 $ 0.80 

Dec $ 0.72 $ 0.78 

2009 Jan $ 0.72 $ 0.77 

Feb $ 0.72 $ 0.75 

Mar $ 0.73 $ 0.74 

Apr $ 0.74 $ 0.73 

May $ 0.75 $ 0.72 

Jun $ 0.77 $ 0.72 

Jul $ 0.78 $ 0.72 

Aug $ 0.79 $ 0.72 

Sep $ 0.80 $ 0.73 

Oct $ 0.80 $ 0.74 

Nov $ 0.80 $ 0.75 

Dec $ 0.80 $ 0.77 

2010 Jan $ 0.80 $ 0.78 

Feb $ 0.79 $ 0.79 

Mar $ 0.79 $ 0.80 

Apr $ 0.79 $ 0.80 

May $ 0.78 $ 0.80 
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Year Month

Forecasted 

6 month 

lag

Forecasted 

one-year 

lag

Jun $ 0.78 $ 0.80 

Jul $ 0.77 $ 0.80 

Aug $ 0.77 $ 0.79 

Sep $ 0.77 $ 0.79 

Oct $ 0.77 $ 0.79 

Nov $ 0.77 $ 0.78 

Dec $ 0.77 $ 0.78 

2011 Jan $ 0.78 $ 0.77 

Feb $ 0.78 $ 0.77 

Mar $ 0.78 $ 0.77 

Apr $ 0.78 $ 0.77 

May $ 0.79 $ 0.77 

Jun $ 0.79 $ 0.77 

Jul $ 0.80 $ 0.78 

Aug $ 0.82 $ 0.78 

Sep $ 0.84 $ 0.78 

Oct $ 0.86 $ 0.78 

Nov $ 0.89 $ 0.79 

Dec $ 0.92 $ 0.79 

2012 Jan $ 0.96 $ 0.80 

Feb $ 1.00 $ 0.82 

Mar $ 1.04 $ 0.84 

Apr $ 1.07 $ 0.86 

May $ 1.11 $ 0.89 

Jun $ 1.14 $ 0.92 

Jul $ 1.18 $ 0.96 

Aug $ 1.20 $ 1.00 

Sep $ 1.22 $ 1.04 

Oct $ 1.23 $ 1.07 

Nov $ 1.24 $ 1.11 

Dec $ 1.22 $ 1.14 

2013 Jan $ 1.20 $ 1.18 

Feb $ 1.17 $ 1.20 

Mar $ 1.13 $ 1.22 

Apr $ 1.09 $ 1.23 

May $ 1.05 $ 1.24 

Jun $ 1.01 $ 1.22 

Jul $ 0.98 $ 1.20 

Aug $ 0.94 $ 1.17 

Sep $ 0.91 $ 1.13 
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Year Month

Forecasted 

6 month 

lag

Forecasted 

one-year 

lag

Oct $ 0.88 $ 1.09 

Nov $ 0.85 $ 1.05 

Dec $ 0.85 $ 1.01 

2014 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2015 Jan

Feb

Mar

Apr

May

Jun

Jul

These are the data for Figure 22: Errors of the lagged catfish price models 

Year Month

Forecasted 

6 month 

lag Error

Forecasted 

one-year 

lag Error

2000 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug
Insurance Program Development for Catfish Margin Protection 

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Year Month

Forecasted 

6 month 

lag Error

Forecasted 

one-year 

lag Error

Sep

Oct

Nov

Dec

2001 Jan

Feb

Mar

Apr

May

Jun

Jul 13%

Aug 16%

Sep 17%

Oct 18%

Nov 22%

Dec 22%

2002 Jan 22% 27%

Feb 20% 26%

Mar 18% 23%

Apr 17% 23%

May 14% 21%

Jun 10% 18%

Jul 9% 16%

Aug 8% 16%

Sep 7% 16%

Oct 7% 16%

Nov 7% 16%

Dec 8% 17%

2003 Jan 9% 18%

Feb 6% 14%

Mar -2% 6%

Apr -10% -3%

May -9% -3%

Jun -3% 1%

Jul 1% 3%

Aug 2% 4%

Sep 1% 2%

Oct 0% 1%

Nov -7% -7%

Dec -9% -11%
Insurance Program Development for Catfish Margin Protection 

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Year Month

Forecasted 

6 month 

lag Error

Forecasted 

one-year 

lag Error

2004 Jan -16% -18%

Feb -23% -24%

Mar -27% -28%

Apr -28% -28%

May -26% -26%

Jun -20% -20%

Jul -17% -18%

Aug -15% -19%

Sep -13% -20%

Oct -13% -22%

Nov -10% -21%

Dec -9% -20%

2005 Jan -13% -25%

Feb -12% -23%

Mar -10% -21%

Apr -8% -17%

May -5% -15%

Jun -4% -14%

Jul -4% -12%

Aug -3% -11%

Sep -3% -9%

Oct -3% -7%

Nov -3% -6%

Dec -3% -5%

2006 Jan -3% -4%

Feb -3% -4%

Mar -4% -6%

Apr -10% -12%

May -11% -13%

Jun -12% -15%

Jul -12% -15%

Aug -12% -14%

Sep -15% -17%

Oct -15% -17%

Nov -14% -16%

Dec -14% -16%

2007 Jan -12% -15%

Feb -11% -16%

Mar -10% -16%

Apr -9% -16%
Insurance Program Development for Catfish Margin Protection 

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Year Month

Forecasted 

6 month 

lag Error

Forecasted 

one-year 

lag Error

May -8% -15%

Jun -4% -11%

Jul 4% -2%

Aug 9% 3%

Sep 14% 8%

Oct 17% 11%

Nov 19% 14%

Dec 22% 17%

2008 Jan 21% 17%

Feb 17% 15%

Mar 9% 9%

Apr 6% 8%

May 3% 6%

Jun -2% 4%

Jul -7% 2%

Aug -10% 0%

Sep -12% -1%

Oct -13% -2%

Nov -14% -3%

Dec -14% -5%

2009 Jan -13% -6%

Feb -7% -2%

Mar -6% -5%

Apr -3% -4%

May -1% -5%

Jun 0% -6%

Jul 1% -8%

Aug 3% -7%

Sep 3% -6%

Oct 4% -4%

Nov 5% -2%

Dec 5% 0%

2010 Jan 4% 2%

Feb 4% 3%

Mar 1% 2%

Apr -2% 0%

May -2% 1%

Jun -1% 2%

Jul -2% 1%

Aug -3% 1%
Insurance Program Development for Catfish Margin Protection 

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Year Month

Forecasted 

6 month 

lag Error

Forecasted 

one-year 

lag Error

Sep -6% -3%

Oct -8% -6%

Nov -9% -8%

Dec -11% -11%

2011 Jan -20% -21%

Feb -29% -31%

Mar -38% -40%

Apr -46% -49%

May -48% -52%

Jun -55% -59%

Jul -56% -61%

Aug -56% -64%

Sep -52% -64%

Oct -47% -62%

Nov -42% -60%

Dec -36% -58%

2012 Jan -30% -56%

Feb -23% -51%

Mar -16% -44%

Apr -9% -36%

May 6% -17%

Jun 18% -2%

Jul 28% 12%

Aug 34% 20%

Sep 35% 23%

Oct 35% 25%

Nov 33% 26%

Dec 32% 27%

2013 Jan 32% 30%

Feb 29% 32%

Mar 23% 29%

Apr 18% 28%

May 11% 25%

Jun 4% 21%

Jul -1% 18%

Aug -9% 12%

Sep -17% 6%

Oct -26% -2%

Nov -30% -6%

Dec -30% -9%
Insurance Program Development for Catfish Margin Protection 

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Year Month

Forecasted 

6 month 

lag Error

Forecasted 

one-year 

lag Error

2014 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2015 Jan

Feb

Mar

Apr

May

Jun

Jul

These are the data for Figure 23: Catfish gross margins, 2000-2014: 

Catfish 

price 

minus 

Feed 

cost

1/1/2000 $0.74 

2/1/2000 $0.79 

3/1/2000 $0.79 

4/1/2000 $0.79 

5/1/2000 $0.79 

6/1/2000 $0.79 

7/1/2000 $0.76 

8/1/2000 $0.74 

9/1/2000 $0.73 
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Catfish 

price 

minus 

Feed 

cost

10/1/2000 $0.71 

11/1/2000 $0.70 

12/1/2000 $0.68 

1/1/2001 $0.69 

2/1/2001 $0.70 

3/1/2001 $0.70 

4/1/2001 $0.69 

5/1/2001 $0.69 

6/1/2001 $0.67 

7/1/2001 $0.66 

8/1/2001 $0.62 

9/1/2001 $0.61 

10/1/2001 $0.60 

11/1/2001 $0.57 

12/1/2001 $0.55 

1/1/2002 $0.55 

2/1/2002 $0.56 

3/1/2002 $0.57 

4/1/2002 $0.56 

5/1/2002 $0.57 

6/1/2002 $0.59 

7/1/2002 $0.59 

8/1/2002 $0.58 

9/1/2002 $0.58 

10/1/2002 $0.57 

11/1/2002 $0.56 

12/1/2002 $0.54 

1/1/2003 $0.53 

2/1/2003 $0.54 

3/1/2003 $0.59 

4/1/2003 $0.63 

5/1/2003 $0.62 

6/1/2003 $0.59 

7/1/2003 $0.56 

8/1/2003 $0.55 

9/1/2003 $0.56 

10/1/2003 $0.57 

11/1/2003 $0.61 

12/1/2003 $0.63 
Insurance Program Development for Catfish Margin Protection 

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Catfish 

price 

minus 

Feed 

cost

1/1/2004 $0.67 

2/1/2004 $0.70 

3/1/2004 $0.72 

4/1/2004 $0.73 

5/1/2004 $0.72 

6/1/2004 $0.69 

7/1/2004 $0.68 

8/1/2004 $0.68 

9/1/2004 $0.68 

10/1/2004 $0.70 

11/1/2004 $0.69 

12/1/2004 $0.69 

1/1/2005 $0.73 

2/1/2005 $0.73 

3/1/2005 $0.73 

4/1/2005 $0.73 

5/1/2005 $0.72 

6/1/2005 $0.72 

7/1/2005 $0.72 

8/1/2005 $0.72 

9/1/2005 $0.72 

10/1/2005 $0.72 

11/1/2005 $0.72 

12/1/2005 $0.73 

1/1/2006 $0.73 

2/1/2006 $0.73 

3/1/2006 $0.75 

4/1/2006 $0.79 

5/1/2006 $0.80 

6/1/2006 $0.81 

7/1/2006 $0.81 

8/1/2006 $0.81 

9/1/2006 $0.83 

10/1/2006 $0.84 

11/1/2006 $0.84 

12/1/2006 $0.84 

1/1/2007 $0.84 

2/1/2007 $0.84 

3/1/2007 $0.84 
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Catfish 

price 

minus 

Feed 

cost

4/1/2007 $0.84 

5/1/2007 $0.84 

6/1/2007 $0.82 

7/1/2007 $0.76 

8/1/2007 $0.73 

9/1/2007 $0.70 

10/1/2007 $0.68 

11/1/2007 $0.67 

12/1/2007 $0.65 

1/1/2008 $0.66 

2/1/2008 $0.69 

3/1/2008 $0.74 

4/1/2008 $0.76 

5/1/2008 $0.78 

6/1/2008 $0.79 

7/1/2008 $0.82 

8/1/2008 $0.83 

9/1/2008 $0.83 

10/1/2008 $0.83 

11/1/2008 $0.82 

12/1/2008 $0.82 

1/1/2009 $0.81 

2/1/2009 $0.77 

3/1/2009 $0.77 

4/1/2009 $0.76 

5/1/2009 $0.76 

6/1/2009 $0.76 

7/1/2009 $0.77 

8/1/2009 $0.77 

9/1/2009 $0.77 

10/1/2009 $0.77 

11/1/2009 $0.77 

12/1/2009 $0.76 

1/1/2010 $0.76 

2/1/2010 $0.77 

3/1/2010 $0.79 

4/1/2010 $0.80 

5/1/2010 $0.80 

6/1/2010 $0.79 
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Catfish 

price 

minus 

Feed 

cost

7/1/2010 $0.79 

8/1/2010 $0.79 

9/1/2010 $0.82 

10/1/2010 $0.83 

11/1/2010 $0.84 

12/1/2010 $0.86 

1/1/2011 $0.93 

2/1/2011 $1.00 

3/1/2011 $1.08 

4/1/2011 $1.14 

5/1/2011 $1.17 

6/1/2011 $1.23 

7/1/2011 $1.25 

8/1/2011 $1.28 

9/1/2011 $1.28 

10/1/2011 $1.27 

11/1/2011 $1.26 

12/1/2011 $1.25 

1/1/2012 $1.25 

2/1/2012 $1.23 

3/1/2012 $1.20 

4/1/2012 $1.17 

5/1/2012 $1.04 

6/1/2012 $0.93 

7/1/2012 $0.84 

8/1/2012 $0.80 

9/1/2012 $0.79 

10/1/2012 $0.80 

11/1/2012 $0.82 

12/1/2012 $0.83 

1/1/2013 $0.82 

2/1/2013 $0.82 

3/1/2013 $0.87 

4/1/2013 $0.89 

5/1/2013 $0.93 

6/1/2013 $0.97 

7/1/2013 $0.99 

8/1/2013 $1.03 

9/1/2013 $1.06 
Insurance Program Development for Catfish Margin Protection 

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Catfish 

price 

minus 

Feed 

cost

10/1/2013 $1.11 

11/1/2013 $1.11 

12/1/2013 $1.10 

1/1/2014 $1.10 

2/1/2014 $1.13 

3/1/2014 $1.15 

4/1/2014 $1.17 

5/1/2014 $1.19 

6/1/2014 $1.20 

7/1/2014 $1.20 

8/1/2014 $1.20 

9/1/2014 $1.19 

10/1/2014 $1.19 

11/1/2014 $1.16 

12/1/2014 $1.14 

1/1/2015 $1.14 

2/1/2015 $1.14 

3/1/2015 $1.13 

4/1/2015 $1.13 

5/1/2015

6/1/2015