AQUACULTURE OUTLOOK                                          March 05, 1999
March 1999, ERS-LDP-AQS-09
               Approved by the World Agricultural Outlook Board
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AQUACULTURE OUTLOOK, is published twice a year by the Economic Research
Service, U.S. Department of Agriculture, Washington, DC 20036-5831. 

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Higher Domestic Production and Imports To Boost Consumption

Over the last 5 years, the consumption of farm-raised catfish,
tilapia, salmon and shrimp has increased significantly.  While
these species have experienced the most significant increases, 
consumption of other farm-raised species has also risen.  This
basic change in the source of the U.S. seafood supply is expected
to continue in the foreseeable future.  With increasingly
stringent catch limitations - such as those lowering the
allowable landings of some major commercial fish species in the
New England area - domestic wild harvest is not expected to
significantly expand in the near future.  In 1997, the latest
data available, per capita seafood consumption in the United
States was estimated at 14.6 pounds, down 0.2 pound from the
previous year and down 1.6 pounds from its peak of 16.2 pounds in
1987.  However, as per capita consumption of seafood in the
United States has been declining, the consumption of farm-raised
seafood has been increasing.

Many of the major economic and supply trends that affected the
U.S. aquaculture industry and seafood imports and exports in
general in 1998 are expected to continue in 1999.  In the
domestic market, large supplies of pork and chicken are expected
to keep downward pressure on overall meat prices and the prices
for competing products, such as seafood.  This, however, is
countered by a forecast for a strong domestic economy and low
overall unemployment in the United States.  These factors are
expected to translate into increased away-from-home eating, an
extremely important outlet for most seafood products.  The U.S.
dollar is expected to remain strong because of continued global
economic problems, a factor that will encourage higher imports of
seafood products and reduce export opportunities.  Finally, some
aquaculture producers, notably catfish farmers, are expected to
continue benefiting from low feed costs brought on by weak prices
for corn and soybeans.

Catfish Production Expected Higher in 1999

Grower sales of catfish to processors in 1999 are expected to
reach 595-605 million pounds, up 5 to 7 percent from the previous
year.  Growers are expected to increase production as a result of
two straight years of strong farm level prices and feed costs
that are expected to remain low.  Prices to catfish farmers
declined in the second half of 1998.  But with grower supplies of
food-size fish, little changed from the previous year, and
because processor inventories of finished product were down 9
percent at the start of 1999, grower prices are expected to
tighten during the first quarter of 1999.  Sales to processors in
January were 49 million pounds, up 4 percent from the previous
year.  Prices paid by farmers in January were 70 cents a pound,
up 1 cent from January 1998.  In 1998, catfish sales by growers
to processors totaled 564.4 million pounds, 8 percent higher than
in 1997.

Overall Farm Prices Expected To Be Steady in 1999

Although per capita seafood consumption in the United States has
been flat or declining for the last decade, the catfish industry
has continued expanding sales at a pace well beyond the
population growth rate.  Per capita catfish consumption has
increased, and catfish consumption as a percentage of total
seafood consumption has grown.  Consumption is expected to
increase in 1999 because of the strong domestic economy.  
Farm prices are expected to strengthen quickly in the first
quarter as processors rapidly move through the inventory of
available market-size fish.  Prices are expected to soften,
however, in the second quarter of 1999, once the Lenten season
ends and the large inventory of stockers begins to reach market
size.   A shortfall of food-size fish caused prices paid to
farmers to jump from 69 to 79 cents a pound during the first four
months of 1998, but prices gradually declined and ended the year
at 70 cents a pound, similar to the end of 1997.  With little
change in farmer and processor inventories, the catfish industry
started 1999 in almost the same position as the start of 1998.

Growers Increase Pond Acreage

Growers reported that as of January 1, 1999, they anticipated
that 175,220 acres of ponds would be used during the first-half
of 1999, up 2 percent from the revised estimate of the acreage
used in 1998.  Most of this increase is attributed to a 5-percent
increase in acreage in Mississippi.   Farmers also reported they
would be renovating or building an additional 10,000 acres of
ponds in the first half of 1999, an increase seen as a delayed
response to the relatively steady farm prices and low feed costs
over the last 2 years.  The number of growers was also up, with
Mississippi experiencing a surprisingly strong 27-percent
increase in farms.

Food-size and Fingerling Inventories Down Slightly, Stockers Up

At the beginning of 1999, growers reported that their inventories
of large and medium food-size fish had declined in terms of
numbers of fish.  This was partially countered by a marginal
increase in the number of small food-size fish in inventory.  The
total inventory of small food-size fish has been relatively
constant for the last 3 years, but inventories reported by
Mississippi growers have risen for the last 3 years.  In total,
the 248 million food-size fish reported in grower inventories
would be expected to supply processors for only about 5 months if
used at the rate seen in 1998.  Thus, the relatively tight supply
of food-size fish is expected to exert some upward pressure on
prices during the first 3 to 4 months of 1999.  Farm prices
during this period also will be influenced by weather-related
disruptions to harvesting and any change in the rate of off-
flavor occurrences.

The inventory numbers for stockers, those fish from .06 to .75
pounds, were estimated at the beginning of 1999 at 660 million,
up 9 percent from the previous year.   Although a strong increase
from 1998,  this inventory level is still 27 percent below the
755 million reported at the start of 1997.  The time period at
which these stockers reach market size will be important in
determining both whether growers experience hikes in prices like
those of 1998 and how long higher prices can be maintained.

The reported inventory of fingerlings - fish weighing less than
.06 pound - was down 2 percent from 1998, but inventories in the
four major States nearly matched the previous year at 921 million
fish.  These fish will be the chief source of food-size fish
supply during the second half of 1999.  Because fingerling levels
are expected to remain constant, the decline in prices may not be
as severe in the second half of 1999 as it was in 1998. 
Broodstock inventory levels also were similar to those of  the
previous year, so egg and fingerling production during the first
half of 1999 is expected to be roughly similar to 1998.     

Farm Sales Increase 10 Percent in 1998

Catfish farmers reported that total sales in 1998 reached $469
million, 10 percent higher than the revised figure of $427
million for 1997.  Revenues from the sale of food-size fish,
stockers, and fingerlings were all higher.  The increase in food
-size fish and fingerlings occurred because of both a higher
quantity of fish sold and price increases.  Food-size fish sales
totaled just under 600 million pounds, up 5 percent from 1997,
and averaged 74 cents a pound, up 4 percent.  Grower sales to
processing plants totaled 564 million pounds and the remaining 35
million were sold either directly to retailers or consumers. 
Fingerling sales increased 31 percent to $20 million, as the
volume rose 29 percent and prices increased slightly.  Most of
the increase is attributed to higher sales by Mississippi
growers.

Stockers sales totaled $7 million, a 79-percent increase
resulting from the sale of 7 million pounds of fish, nearly
double the previous year.  This more than offset a 11-percent
decrease in the average price per pound.  As with fingerlings,
the overall increase was mostly due to Mississippi's sales.

Although the number of fingerlings, stockers, and food-size fish
sold by farmers showed strong increases in 1998, this was not
generally reflected in the end-of-year inventory.  While stocker
inventories were higher, food-size fish and fingerlings held by
growers declined from 1997.  With expected strong processor sales
in first-quarter 1999 and expectations of continued low prices
for corn and soybeans, stocker and fingerling producers are
likely to expand sales as food-size producers increase the size
of their operations and may slightly increase the density of
stocking in existing ponds. 

Processor Revenues Hit New Record

Processor sales rose in 1998 for the fourth consecutive year. 
After increasing 10 percent in 1997, sales increased 8 percent in
1998 to 281 million pounds.  This increase and a 2 percent
increase in the average price to $2.31 a pound were enough to
boost processors' gross revenues by 10 percent, or $85 million,
to just under $650 million.  Processors' sales of catfish have
increased from 114 million pounds in 1986 to 281 million in 1998. 
During this period, average prices have been relatively stable,
varying from a low of $1.93 in 1987 to a high of $2.40 in 1994. 
In real dollars, however, processor prices have fallen fairly
steadily over the last 13 years, a trend consistent with most
agriculture products that have experienced increases in overall
production but declines in real prices.  In 1999, gross processor
revenues are expected to again increase, as gains in production
offset steady to slightly lower prices.

In 1998, sales of both fresh and frozen catfish products
continued to set new records.  Fresh catfish sales were up 6
percent while frozen catfish sales rose 8 percent.   Greater
sales of filleted products were the driving force behind the
increases.  Fresh-filleted sales rose 11 percent in 1998 and have
increased in 11 of the last 12 years.  Frozen-fillets sales were
9 percent higher in 1998, the fourth consecutive year for sales
increases.  Fresh and frozen fillets accounted for almost 60
percent of processor sales in 1998 and are expected to account
for more as the catfish industry grows.  In 1999, processor sales
are expected to increase 5 to 7 percent, projections in line with
changes in grower sales.

Tilapia Imports Forecast Higher in 1999

U.S. tilapia imports are forecast to continue growing in 1999. 
However, the rate of increase is expected to be lower than in
previous years.  Although the U.S. dollar remains strong against
the currencies of exporters such as Thailand and Indonesia, if
tilapia imports are to continue growing, its marketers will need
to follow the salmon and catfish industries lead and gain greater
widespread acceptance and visibility to increase tilapia product
sales, now ranging from 60 to 70 million pounds, to hundreds of
millions of pounds.  The changing demographics of the United
States should allow for continued moderate growth as the
traditional target markets,  Asian markets and restaurants,
expand in size.  However, importers or producers will aim at
expanding the consumer base to wider markets outside of major
urban areas.  Taiwan is expected to remain the dominant tilapia
supplier, but imports of fresh fillets, mainly from Central or
South American countries, are expected to increase as sales
expand to restaurant chains.  Because many of these countries are
also farmed-shrimp producers, producers and wholesalers in those
countries have, and are building upon, the resources needed to
expand tilapia production.  

Tilapia imports increased to 61 million pounds of product weight
in 1998, 14 percent higher than the previous year.  Although
imports of filleted products expanded, tilapia imports grew
primarily because of higher shipments of frozen whole fish from
Taiwan.  If tilapia follows a path similar to those of other fish
species,  then filleted products are expected to comprise a
larger share of future imports as producers try lowering shipping
costs and increasing earnings through value-added processing. 
Taiwan, with almost 80 percent of the total supply on a quantity
basis, continues to be the largest supplier of tilapia.  Other
major suppliers are Thailand, Indonesia, Costa Rica, and Jamaica.

The total value of tilapia imports in 1998 increased 7 percent to
$52 million.  The value of tilapia imports has increased
continually since 1993, the first full year that tilapia imports
were assessed on an individual basis.  The average value of
imports, at $0.86 a pound, however, was down 7 percent from 1997
and has fallen 17 percent in the last 2 years.  This decrease was
due primarily to a large increase in quantity and declining
prices for frozen whole fish.  The average price for fresh and
frozen fillets declined slightly.  On a liveweight basis, U.S.
imports of tilapia  in 1998 were the equivalent of 94 million
pounds of foreign production.

Imports of  tilapia were higher in 1998 in all of the import
classes (frozen whole and fresh and frozen fillets).  Frozen
whole-fish imports made up 77 percent of the total imports but
just 55 percent of the total value because of growth in fillet
imports.  Taiwan accounted for over 95 percent of the frozen
whole fish imported in 1998.  In 1998, prices for frozen whole
fish fell to 50 cents a pound, down 12 percent from 1997.  As
recently as 1996 frozen whole fish were selling for 71 cents a
pound.  Imported fresh fillets, chiefly from Costa Rica and
Ecuador, increased in value to $17 million, up 22 percent, as
higher import quantities, up 27 percent,  more than offset
slightly lower prices.  Thailand and Indonesia had been the major
importer of frozen fillets, but imports from Taiwan have risen
sharply in the last two years.  Imports of frozen fillets totaled
almost 6 million pounds and were valued at $12 million, increases
of 8 percent and 6 percent, respectively, from the previous year.

U.S. Salmon Imports Top 200 Million Pounds

U.S. farm-raised salmon production in 1998 is expected to
increase only slightly from 1997's output of 36 million pounds. 
Complete 1998 data on U.S. production are not yet available. 
Domestic production is expected to continue to rise gradually. 
With no major increases in the number of approved sites, however,
the increase will have to be from higher productivity.  In 1999,
domestic growers will again face increased imports from Canada
and Chile.  Canadian growers, whose dollar is weak against the
U.S. dollar, will have a cost advantage.  Imports from Chile are
also expected to continue increasing, as Chile is likely the
world's lowest-cost salmon producer, and the weak Japanese market
ill force Chile to target a larger percentage of its exports at
the U.S. and the EU markets.

Atlantic salmon imports reached 209 million pounds in 1998, up 27
percent, as shipments increased in both the fresh and filleted
categories.  Fillet imports, up 62 percent to 94 million pounds,
were a prime factor in the increase.  Almost all of the increases
were from either the Canadian or Chilean salmon industries, as
they combined to supply over 90 percent of all Atlantic salmon
imports.  With an increase of 75 million pounds between 1995, the
first year Atlantic salmon imports were reported separately, and
1998, filleted products now account for 45 percent of all
Atlantic salmon imports, up from only 18 percent in 1995.  With a
large increase in shipments of filleted products, Chile surpassed
Canada to become, for the first time, the largest supplier of
Atlantic salmon products to the United States.  While Canada
dominates the fresh market for Atlantic salmon, Chile is, by far,
the largest supplier in the faster-growing filleted market. The
surge in filleted imports also pushed the value of filleted
products past those of fresh whole fish.   Even with a large
increase in quantity, the overall price for imported Atlantic
salmon products rose slightly in 1998, pushing the total value to
$508 million.

Higher imports and declining exports of salmon products continued
in 1998, a trend for the last four years.   While imports of
pacific salmon products still account for approximately 21
percent of all non-canned salmon imports, this percentage has
been falling steadily due to the rapid increase in farmed-salmon
imports.  These trends are expected to continue in 1999 for
several reasons.  First, U.S. exports are hampered by economic
problems in Japan, a country that has in past years accounted
over 80 percent of the total value of U.S. fresh and frozen
salmon exports.  Because exports are expected to decline and more
U.S. wild-caught pacific salmon will stay in the domestic market,
demand for imported pacific salmon will drop.  The economic
problems also have hurt exports from Chile to Japan, so Chile has
increased efforts to market salmon products in the United States. 
The weak Canadian dollar has increased the competitiveness of
Canadian Atlantic salmon products in the United States.  Finally,
the strong U.S. economy has increased the overall demand for
salmon products, and with the increase in imports of farm-raised
products restaurants can readily find fresh products, even during
Alaska's non-harvest times.

Shrimp Imports Increase Again in 1998

Total shrimp imports in 1998 reached $3.1 billion, an increase of
5 percent from 1997 and 27 percent from 1996.  The increase was
due to a 7 percent increase in volume,  as the average price of
all imported shrimp products declined 2 percent to $4.48 a pound. 
Imports of shrimp products totaled 695 million pounds, with
frozen products accounting for 86 percent, fresh shrimp for 1
percent, and prepared products (breaded, canned, pre-cooked,
etc.) for 13 percent.  Despite speculation that economic problems
in Thailand and Indonesia might reduce shrimp production, these
fears did not come about in 1998, as both Thailand and Indonesia
increased overall shrimp production and exports to the United
States.  Shrimp imports are expected to continue to increase in
1999 as a strong domestic economy should increase both restaurant
sales and home usage, and a strong U.S. dollar will encourage
imports from major suppliers,  such as Thailand, Ecuador, Mexico,
and Indonesia.

Although frozen products had dominated shrimp imports, a growing
portion of imported shrimp is now being shipped as prepared
products.  In 1998, prepared-shrimp imports totaled 89 million
pounds with a value of $452 million, up 29 percent and 21
percent, respectively, from 1997.  Asian producers, notably
Thailand, India, and Indonesia, were the major suppliers of
prepared-shrimp products, accounting for 88 percent of total
shipments in 1998.  In 1999, shipments of prepared shrimp are
expected to again outpace increases in fresh and frozen products. 
The increases in prepared-shrimp imports are driven by higher
away-from-home food consumption and the growth of prepared-meal
sales at foodstores. 

Imports from Thailand have been the fastest growing among the
major shrimp suppliers.  In 1998, imports from Thailand totaled
203 million pounds and were valued at $1.1 billion.  Thailand is
estimated to be the largest shrimp-farming country with total
production in 1998 estimated by World Shrimp Farming at 210,000
metric tons on a head-on basis.  Thai exports have been bolstered
by favorable exchange rates and a desire to gain foreign-exchange
earnings. 

Imports of frozen-shrimp products reached 599 million pounds in
1998, up 5 percent from the previous year.  Shipments of frozen
shell-on shrimp are reported in 9 different size categories and
are grouped by count.  The count sizes range from the largest
shrimp, less than 33 shrimp per kilo, to the smallest-sized
shrimp, with more than 155 shrimp per kilo.  Countries' roles as
shrimp suppliers to the United States vary with shrimp sizes. 
Mexico, India and Bangladesh are major suppliers of large shrimp. 
Ecuador and Thailand dominate imports of middle-sized farmed
shrimp.  A number of Central American countries dominate imports
of the smallest-sized shrimp.

Crawfish Production and Exports Down, Imports Up

The Louisiana Cooperative Extension Service reported that farm
-raised crawfish production fell 27 percent in 1998 to 36 million
pounds.  With slightly higher average prices the value of
crawfish production fell 19 percent to $23 million.  While farmed
production was down 10 million pounds in 1998, there was a slight
increase in wild harvest, which can vary widely depending on the
severity of winter weather and water conditions.  Over the last 5
years, wild harvests in Louisiana have ranged from 20 million to
69 million pounds.

Although an average import tariff of 123 percent has been placed
on imports of crawfish from China,  shipments to the United
States expanded rapidly in 1998.  The quantity of crawfish
imports jumped 173 percent to 6.2 million pounds, with over 90
percent coming from China.  The value of crawfish shipments also
rose strongly, increasing by 168 percent to $9.7 million.

After increasing in 1997, crawfish exports fell by 69 percent to
only 1.8 million pounds.  In 1994, crawfish exports rose to 8.9
million pounds with a value of $14 million, but have fallen
steadily since.  While crawfish producers will still have a
market for their live crawfish, especially in Louisiana and the
surrounding States, the 1999 outlook is for continued growth in
Chinese imports and a depressed market for crawfish to the
Scandinavian countries. 

Mollusk Exports Mixed in 1998, Expected Down in 1999

The same market forces that helped increase the imports of a
number of seafood products have worked against the export of U.S.
mollusk products.   The chief markets for exported mollusks are
Canada and Asia, especially Japan and Hong Kong.  The Asian
economies and a weak Canadian dollar are expected to continue
weakening U.S. exports for mollusks.

In 1998, the value of mollusk exports fell by 3 percent, as only
mussel exports managed to show an increase.  Oyster exports have
fluctuated during the last several years, with the quantity of
oyster exports in 1998 falling 14 percent and the value declining
3 percent.  While the quantity of clams exports increased, the
value fell.  Mussel exports rose both in terms of quantity and
value, but the export figures were still well below the levels of
1995 or 1996.

Mussel Imports Higher,Clam and Oyster Imports Mixed

In 1999 mollusk imports are expected to increase, at least in
quantity.  With demand for mussels growing, shipments from both
Canada and New Zealand are forecast higher.  Canadian imports
will be aided by the country's weak dollar.  U.S. oysters and
clam imports are expected to grow as exchange rates and a strong
U.S. economy encourage shipments from Canadian and Asian
producers.  Still, the value of these products is not expected to
rise as strongly.  

Over the last several years, oyster and clam imports have been
flat or declining while imports of mussels have been growing
rapidly.  The quantity of mussel imports has more than doubled in
the last three years, from 15 million pounds in 1995 to 34
million pounds in 1998.  Mussels imports are reported in three
categories: "farmed", "non-farmed", and "other", meaning they may
be prepared as meats or frozen in the shell.  Canada supplies
most of the mussels in the farmed and non-farmed categories, and
these shipments accounted for 60 percent of the total quantity of
imports.  The remaining 40 percent of imports fall in the "other"
category, of which New Zealand is the major supplier.  These
major suppliers produce two different species which vary in size
and appearance.  Canada's product is a blue mussel and New
Zealand's is a green-lipped mussel.

Mussel imports have grown for several reasons.  First, they
generally are a less costly alternative to oysters or clams. 
Second, they can be used in a variety of cuisines.  Third,
because mussels undergo a debearding and a cleaning process, in
which grit and sand is removed before shipment, the mussels
arrive at restaurants ready to cook.  Finally,  since mussels are
served cooked and, normally,  in their shells, restaurant
employees do not have to shuck mussels.

Imports of oysters rose 18 percent in 1998 to 18 million pounds,
but their value declined 2 percent.  The value of oyster imports
has fallen 16 percent since 1995.  Much of this decrease can be
attributed to the strength of the dollar against the Korean won,
as Korea is a major supplier of smoked and processed oysters. 
Clam imports increased by 15 percent and their value fell by 1
percent.  The lower prices are again due to the economic problems
in Asia, as many of the processed clams imported come from
Thailand, Malaysia, and Indonesia.

Imports and Exports Down for Ornamental Fish

Domestic ornamental-fish producers are expected to face continued
weak export demand in 1999 for their products in many, if not
all, of their major export markets.  In the past, the largest
markets for U.S. ornamental fish have been Japan, Hong Kong, and
other Asian countries.  The economic problems in many countries
and generally unfavorable exchange rates are expected to depress
demand for imported ornamental fish.

In 1998 exports of ornamental fish were down 28 percent to $10.5
million, and over the last three years, the value of shipments
has declined almost 50 percent.  Lower shipments to Asian
countries were again the chief source of the decline, as
shipments to Japan, Hong Kong, Taiwan, and Singapore were down
significantly.

Exports to Japan, the largest U.S. market, declined by 42
percent, and shipments to Hong Kong were down 54 percent.  Hong
Kong's imports have plunged strongly in two of the last three
years.  As in 1997, the general decline in shipments to Asia was
partially offset by more exports to Canada and Mexico.  This was
the third year, following the 1995 peso devaluation, of strong
growth in shipments to Mexico.  In 1999, U.S. producers will have
to look toward Canada and Mexico, and possibly the EU, to help
offset expected weak demand in Asian markets.

Ornamental fish imports fell, for the third consecutive year, to
$45.1 million.  Favorable currency exchange rates in 1998 were
expected to boost exports, but shipments were down from most
Asian countries, such as Thailand, Sri Lanka, Indonesia, and
Malaysia.  These declines were countered somewhat by higher
imports from Japan and Hong Kong.  In 1999, favorable currency
exchange rates with Asian countries are expected to boost
shipments to the United States.  In addition, while imports from
Brazil were lower in 1998, its currency devaluation is expected
to boost imports in 1999.

Principal contributor:
Dave Harvey 202-694-5177

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