A shortage of catfish to meet consumer demand last year gave catfish farmers their first profitable year in a long time. It also came with a downside.

According to an Auburn University-Mississippi State University (MSU) report, the shortage caused many seafood buyers to buy lower-priced imported catfish or turn to alternative fish species to meet their needs, exacerbating foreign competition that has sunk the U.S. catfish industry’s fortunes for the last decade.

The price paid by processors to catfish farmers averaged $1.18 per pound in 2011, after averaging just 78 cents a pound for the previous four years. The price continued to rise through early 2012, reaching $1.25 per pound in January.

Now, catfish prices are starting to take another dive, just as the cost of feed is about to go up due to this year’s drought. The latest national price average reported by USDA in May was $1.04 per pound.

For some farmers, the recent price recovery is too little, too late.

Wanda Hill, a catfish producer near Belzoni, Miss., the self-styled catfish capital of the world, estimates about half of the catfish farmers who were in business five to 10 years ago have gotten out, and she’s about to join them.

“The price is going down again, but the price of feed and fuel isn’t going down,” Hill said.

“We’re slowly phasing out,” she added, a process that takes time because of having to find someone to buy the inventory of fish.

Hill says she and her son, Wayne, who farms with her and serves on Mississippi Farm Bureau’s aquaculture committee, have dried up about half of their pond acreage. She says ponds all across the Mississippi Delta that used to be filled with fish now have grass, trees, soybeans and other crops growing in them.

Nationally, U.S. pond acres devoted to catfish production have plummeted from the 2002 high of almost 197,000 acres to last year’s approximately 90,000 acres.

Catfish is the sixth-most consumed fish or seafood product in the U.S. and, actually, consumption is increasing.

The U.S. catfish industry is based mainly in the Southeast with its warm climate, flat topography, clay soils good for holding water and vast network of rivers and other freshwater sources. Mississippi is the leading catfish producing state.

The industry grew from the 1960s through the 1990s. However, as more American consumers got hooked on eating catfish, overseas producers ramped up and started angling for their share of the market.

Imports have grown from 20 percent of catfish sold in the U.S. in 2005 to a whopping 76 percent in 2011.

Tremendous growth in Asia

“The southeast Asian aquaculture industry grew tremendously during the early to mid-2000s,” explained Butch Wilson, president of Catfish Farmers of America (CFA).

Leading the pack is Vietnamese aquaculture, he said, which produces and exports a catfish-like fish marketed in the U.S. as basa or swai.

“This product is grown and sold at a fraction of the cost of domestic seafood products,” Wilson said, and the lower price appealed to consumers as the economy floundered.

What those consumers may not realize, he said, is that there’s a lack of government regulation and oversight in Vietnam, and fish are grown there in polluted waters, with large amounts of chemicals and antibiotics used to offset the unhealthy growing conditions.

“Most, and sometimes all, of the chemicals and antibiotics used in Vietnamese aquaculture are illegal for use in food products in the United States,” Wilson said.

U.S. farm-raised catfish are raised in freshwater ponds and fed high-quality grain, made up mostly of soybean meal, but also sometimes a little corn or rice. The price of that feed has skyrocketed since 2001. Last year, the catfish industry saw feed price peaks never seen before, according to the Auburn-MSU report.

Even with the higher quality of U.S. farm-raised catfish, most consumers are lured by the low price of Asian imports, laments catfish farmer Hill.

“People are just looking at the price, not the product,” she said. “It’s a lack of education. People don’t realize what they’re eating.”

Only about 2 percent of imported catfish is inspected. The U.S. catfish industry has worked to change that. The 2008 farm bill shifted inspection of catfish from the Food and Drug Administration (FDA) to USDA’s Food Safety and Inspection Service (FSIS) and required the agency to establish an aggressive catfish inspection program. After years of inaction, the department finally issued regulations for the program last year, but it still isn’t finalized.

At the urging of fish importers, according to Wilson, the Senate-passed farm bill included an amendment to repeal the USDA catfish inspection program. The farm bill passed by the House Agriculture Committee would retain the program.

As the farm bill moves forward, Wilson says, CFA will continue to support FSIS inspection of catfish, “which will strengthen food safety for American consumers.”

“Our domestic catfish industry would also be covered and inspected at 100 percent,” he emphasized, “just like imported catfish and catfish-like species. This is about protecting consumers and ensuring a safe seafood supply.”

The industry is also supporting a farm bill provision instructing USDA’s Risk Management Agency to explore the possibility of creating a margin insurance program for catfish farmers, to help protect them from volatility in feed costs and market prices.

Consumers who want safe, quality catfish should look for the U.S. farm-raised label, according to CFA. National country-of-origin labeling regulations cover fish sold in grocery stores. Also, legislators in Alabama, Arkansas, Louisiana, Mississippi and Tennessee have passed similar country-of-origin labeling requirements for restaurants serving catfish and other seafood, also requiring labels and menus to indicate whether the fish was grown or caught.

“The greatest asset to the U.S. farm-raised catfish industry is an educated consumer,” Wilson said. “That’s why we’ve worked so hard over the years to explain the difference between our product and the imported catfish and catfish-like species grown in China and Vietnam. Our research has shown that, given the choice, Americans prefer domestic catfish.”

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