AQUACULTURE OUTLOOK                                            March 07, 1996
            Approved by the World Agricultural Outlook Board
-----------------------------------------------------------------------------
AQUACULTURE OUTLOOK, a supplement to the Livestock, Dairy, and Poultry Monthly
report, is published twice a year by the Economic Research Service, U.S.
Department of Agriculture, Washington, DC 20005-4788.  LDP-AQS-3.
 
Subcriptions to the printed version of this report are available from the 
ERS-NASS order desk.  Call, toll-free, 1-800-999-6779 and ask for stock #LDP-
AQS, $15/year.  A consolidated subscription to all of the livestock, dairy, and
poultry reports (34 issues/year) is also available as stock #LDP-A, $66/year. 
ERS-NASS accepts MasterCard and Visa.
-----------------------------------------------------------------------------
 
Catfish Production Forecast Higher in 1996
 
Catfish production is expected to expand 5-7 percent in 1996,
based on January 1 grower inventories.  After falling in 1994 for
the first time in almost 20 years, live catfish deliveries to
processing plants rose to 447 million pounds in 1995, up 2
percent from the previous year.  After strong farm prices in 1994
and 1995, grower inventories at the beginning of 1996 are higher
in almost all size categories.
 
As of January 1, 1996, growers reported their inventories of
market-sized fish at 227.7 million, an increase of 13 percent
from a year earlier.  The larger market inventory is expected to
put downward pressure on farm prices.  However, some of this
price pressure will be offset by the traditionally strongest
sales period of the year, usually January-April, during which the
Lenten period falls.  Grower-held inventories of stockers and
fingerlings as of January 1, 1996, were up 13 and 15 percent,
respectively, from a year earlier.
 
Production and prices during the second half of 1996 will depend
on how fast stockers and fingerlings held by growers on January 1
can be brought to market size.  With farm prices still averaging
around 77 cents a pound, growers have an incentive to feed fish
at maximum rates.  However, with higher feed prices in 1996,
growers will be looking to maximize feed conversion ratios by
slightly reducing the stocking rates and feeding schedules. 
Overall domestic economic growth in 1996 is expected to be
moderate, which could help support consumer purchases of higher
priced protein products.
 
Farm Prices Lower in 1996
 
Farm prices for catfish over first-quarter 1996 are expected to
average 2-3 cents a pound below the high levels of a year
earlier, due to larger supplies and strong competition from the
meat and poultry industries.  Prices will continue to be
pressured downward during the second quarter and into the summer
months as the supply of market size fish increases.
 
Acreage Growth Mainly in Arkansas and Mississippi
 
The catfish industry has responded to 2 consecutive years of
profitability by expanding operations and acreage in production. 
The January 1, 1996, survey of the catfish industry reported
1,320 operations, up 4 percent.  Acreage in ponds also increased,
from 158,840 acres in July 1995 to 167,280 in January 1996.  This
is the largest acreage ever reported by the catfish industry, up
1 percent from the previous record of 166,160 in July 1991.  The
largest increases in acreage were in Arkansas and Mississippi,
about 4,000 additional acres each.
 
At the beginning of 1996, growers reported they had over 9,400
acres of ponds either being renovated or under construction, 27
percent higher than a year earlier.  New construction or
renovation of acreage later this year will depend on grower
prices and feed costs.
 
Decreasing Broodfish Suggests Lower Production in 1997
 
Changes in broodfish inventories at the begining of a year tend
to be more closely related to supplies in the following year, due
to the lag associated with the growing time needed to bring
catfish fingerlings to market size.    Therefore, the increase in
grower-held inventories in 1996 relates back to the increase in
broodfish seen at the beginning of 1995.  The decline in
broodfish numbers in 1996 would suggest a smaller inventory of
fish going into 1997 and lower production.
 
Higher Farm Sales Expected in 1996
 
Farmer sales to processing plants in 1995 totaled 447 million
pounds, up only 2 percent from the previous year.  Prices
received by farmers averaged 78.6 cents a pound in 1995,
marginally higher than the previous record set in 1994.  Farmers
recorded strong gains in sales to processors during first-half
1995, but sales slowed in much of the second half.  Given the
strong increases in numbers of fish held in inventory at the
beginning of 1996, grower sales to processors are forecast
between 470 and 480 million pounds, up 5-7 percent from 1995. 
Most of the sales increase is expected in second-half 1996 as
current stockers and fingerlings reach market size.  Sales to
processors in January 1996 were down 1 percent, but sales are
likely to increase as the Lenten season progresses.
 
Processor Revenues Set Record in 1995
 
A 5-percent increase in processor sales quantities and a small
increase in average sales price to a record $2.40 a pound pushed
gross processor revenues to a record $545 million in 1995, up 6
percent from the year-earlier record.  In 1996, gross processor
revenues are expected to decline somewhat as higher anticipated
volumes are likely to be offset by lower prices.  Average
processor prices for all catfish products appear to have peaked
in May 1995 at $2.45.  Between May 1995 and January 1996 average
prices have fallen 5 percent.  
 
The higher revenues in 1995 were due to higher sales and prices
in both the fresh and frozen markets.  In both markets, rising
sales of fillets and other products offset declining sales of
whole fish.  Prices in the fresh and frozen markets averaged
slightly higher in 1995, setting new records.  Sales of "other"
products, chiefly steaks, nuggets, and belly strips, were the
strongest category in 1995.  Sales of other products rose 6
percent in the frozen market and a large 20 percent in the fresh
market.  For 1996, prices are expected to be lower due to larger
supplies of catfish and competing products. 
 
Tilapia Imports Continue To Grow
 
Tilapia imports are forecast to further expand in 1996 as higher
production of fillets allows tilapia to move into large food
service markets.  Domestic production is also forecast to grow. 
Domestic producers will look to the live market first, but as
output expands, larger producers will have to weigh the
additional capital expenses and management needed to enter and
compete in the processed fish market.
 
The value of tilapia imports in 1995 rose 33 percent to $34.1
million.  The expansion in tilapia imports seen over the last 3
years continues.  The increase in import value was chiefly the
result of higher prices, as the quantity imported rose only 8
percent.  On a liveweight basis, tilapia imports in 1995 totaled
over 50 million pounds.  Higher imports are expected in 1996 as
U.S. prices have stayed relatively firm even with higher imports
and larger world supplies. 
 
The American Tilapia Association estimated that U.S. production
expanded in 1995 and additional growth is forecast for 1996. 
Future growth in domestic production will depend on the ability
of growers and processors to lower cost enough to compete with
imports.  If tilapia follows the same pattern as other finfish
species, larger production and declining grower prices will
expand the market.  However, to appeal to a wider audience,
especially in the United States, processors likely will have to
move to a larger variety of value-added products instead of
chiefly marketing whole fish.
 
The increases in tilapia imports were not even throughout the
different categories.  Imported quantities rose for frozen whole
fish and fresh fillets, but fell for frozen fillets.  In the
frozen fillet market, even with imported quantities declining,
the value increased as the average import price was up 50
percent.  The frozen fillet market is relatively evenly divided
between Thailand, Indonesia, and Taiwan, each of which has a 26
to 30 percent market share. 
 
U.S. Salmon Production Higher in 1995, Maine Output Up 50 Percent
 
U.S. pen-raised salmon production rose to 34 million pounds in
1995, about 36 percent higher than the previous year.  While
output is expected to increase in 1996, domestic growers will
continue to have their prices pressured by expanding supplies of
imported farm-raised salmon and large harvests of wild salmon.
 
After falling in 1994, when some growers withheld salmon from the
market and weather problems beset the industry, Maine's
Department of Marine Resources reported that production rose to
22.3 million pounds, liveweight, about 50 percent higher than in
1994.  The higher production resulted from favorable growing
conditions and higher production at existing sites.  Production
is forecast to rise in 1996 as some additional sites come into
production and growers continue to become more efficient at
existing locations.
 
The Washington Salmon Growers Association reported a production
of 11.2 million pounds in 1995, up 7 percent from 1994.   The
increase was due to higher productivity at existing sites, as
Washington has not approved any new sites in a number of years. 
Growers in Washington expect slightly higher production in 1996
as productivity rises.
 
In 1995, U.S. imports of Atlantic salmon continued to grow. 
Imports were higher in all categories, but growth in imports of
fresh and frozen fillets was especially strong.  Overall, Canada
and Chile continue to be the dominant suppliers, but the chief
supplier is different in each of the three main markets.  Imports
of fresh salmon (farm or nonfarmed) reached $194 million in 1995,
14 percent higher than in 1994.  Canada and Chile account for
approximately 97 percent of the imports in this category.  In the
frozen market, Norway supplied 63 percent of the imports. 
Imports of frozen salmon have not increased as fast as either
fresh or filleted imports and were valued at $15 million.
 
While the fresh and frozen markets increased in 1995, the real
growth in salmon imports was in fillets.  Salmon fillet imports
in 1995 were valued at $51 million, compared with less than $1
million in 1994.  Chile is the chief supplier in the fresh fillet
market, valued at $39 million, accounting for over 85 percent of
the product.  The growth in imports of Chilean salmon fillets is
due to the growing U.S. demand for fillet products, the falling
real prices, and processing cost advantage.
 
Under pressure from growing world production of farmed Atlantic
salmon, the average import prices fell in 1995.  Prices for fresh
fish averaged only $2.43 a pound in 1995, down a nickel from
1994.  Prices were almost identical for frozen fish at $2.46 a
pound.  However, fillets averaged only $2.63 a pound, an
indication of possible further downward price pressure on
imported whole fish.  Fillets are normally considerably more
expensive than whole fish.
 
Farmed salmon prices are expected to be under continued downward
pressure in 1996 as most growing areas are still looking to
increase production.  In both Norway and Chile there are efforts
to diversify production with items such as halibut or steelhead
trout.  Growers in Norway have also cut back feeding of salmon
already in net-pens to reduce what had been projected as another
large jump in production for 1996.
 
Shrimp Imports Down, Prices Up in 1995
 
After reaching $2.7 billion in 1994, U.S. shrimp imports fell 4
percent to $2.6 billion in 1995.  The decline stems from lower
quantities and only a small increase in the average price, mostly
for frozen product.  Prices for the different size categories of
frozen shell-on moved in different directions in 1995.  Prices
for the larger sized shrimp generally rose while prices for the
smaller sizes fell.  Prices also rose for frozen peeled shrimp
(up 5 percent), but an 11-percent decrease in quantity pushed the
value of imported shrimp in this category down 7 percent to $868
million.
 
In 1996, overall shrimp prices are expected to remain relatively
strong.  First, some growing areas are experiencing problems with
post-larvae availablity or diseases.  Second, rapid economic
growth in China and the decline in its domestic farmed shrimp
production have made China a market for shrimp from other Asian
producers.  Third, higher world grain prices will raise
production costs. 
 
Over the last 2 years, Mexican shrimp exports to the United
States have risen 28 million pounds.  While Mexico has a
developing shrimp farming industry, most of the increase has come
from sales of wild-caught shrimp.  In 1995, imports from Ecuador
were also higher, while imports from the major farmed shrimp
producers in Asia, Thailand, Indonesia, and the Philippines were
all lower.  Supplies from Asian countries are likely to remain
lower in 1996 as long as China remains a strong market for shrimp
imports.
 
The impact of the Food and Drug Administration's new safety and
inspection regulations on imports from developing countries in
Asia is unknown.  Many processors may not have the necessary
capital to bring their operations into compliance with the
regulations, which go into effect on December 18, 1997.
 
Crawfish Imports Double Again
 
The value of imported crawfish meat rose to $9.1 million in 1995,
more than double the previous year.  In only 2 years, crawfish
meat imports have increased more than fourfold.  However, after
falling for the last 2 years the average landed price rose to
$3.19, considerably higher than the $2.39 they had averaged in
1994.  Prices rose partly due to a smaller wild harvest during
the 1994/95 season.  Prices have remained strong going into the
1995/96 season especially with cold weather in January reducing
pond production.  The prices for the remainder of the 1995/1996
season will be heavily influenced by the water levels in the
Achafalaya Basin, which accounts for much of Louisiana's wild
harvest.
 
The smaller wild harvest in the 1994/95 season reduced exports to
Scandinavia to $9.6 million, down 33 percent from the previous
year.  Many of the large crawfish needed for this market come
from the wild harvest.
 
Clam and Mussels Exports Up, Mollusk Imports Climbing
 
The supply of mollusks in the United States, (oysters, clams,
mussels, and scallops) is from farmed and wild production from
both domestic production and imports.  For most of the items
there are no clear answers on exactly how much is farmed and how
much is wild.  In most cases, Canada is the main export market
and also the chief source of imports.  The exception to this is
oyster imports, where the major supplier is South Korea.
 
In 1995, U.S. exports of mollusks were valued at $16 million, up
about $1 million from 1994.  The growth came from increases in
the value of mussel and clam exports.  Oyster exports were down
slightly from the previous year, due to lower supply, not lower
demand, in the export markets.  With economic growth forecast to
continue in most of Asia, U.S. mollusk growers, especially
farmers of Pacific oysters on the West Coast, are expecting
continued increases in the export markets for their product.
 
Mollusk imports in 1995 grew to $241 million.  Over 70 percent of
this value comes from scallop imports.  In the scallop market,
most live product is imported from Canada, while processed
scallops are chiefly products of China and Japan.  Both China and
Japan have extensive farmed scallop industries.  Other major
suppliers of farmed mollusks to the United States are Canada for
both mussels and oysters and New Zealand, which is a large
producer of farmed mussels.
 
Ornamental Fish Exports and Imports Higher
 
U.S. exports of ornamental fish were valued at almost $20 million
in 1995, up 5 percent from 1994, the sixth consecutive year that
exports have risen.  Ornamental fish exports have gone up 70
percent in value since 1990.  Although sometimes overlooked due
to the attention focused on the production of food products,
ornamental fish are the largest aquaculture export for the United
States.
 
The largest markets for U.S. ornamental fish exports continue to
be Japan, Canada, Hong Kong, Taiwan, and Mexico.  The continued
strength of the yen compared to the dollar has boosted exports to
Japan.  In 1995, exports to Japan rose 32 percent to $7.8
million.  Japan accounts for 40 percent of U.S. exports.  The
weakness in the peso contributed to a 43-percent drop in exports
to Mexico in 1995.  For 1996, however, as the Mexican economy
begins to stabilize, exports are expected to move back towards
their pre-devaluation levels.  Another large market for exports
is the European Union (EU), which accounted for 15 percent of
U.S. exports, or $3 million.  Shipments to the EU were up in 1995
as market expansions in the U.K., Germany, and Italy more than
offset declines in some other countries.
 
Imports of ornamental fish topped $54 million in 1995, up 15
percent from 1994.  Since 1990, the value of imported ornamental
fish has risen 32 percent.  Much of the increase came from higher
shipments from traditionally large suppliers in Asia, such as
Singapore, Indonesia, and the Philippines.  There was also
considerable growth in imports from Western Hemisphere suppliers,
such as Colombia, Peru, and Brazil.  Together these countries
accounted for about 15 percent of the market.
 
Principal contributor:
Dave Harvey 202-219-0839
 
 
                                   END-END-END