Fisheries Technology Associates, 11 February 2011
by Bill Manci,Senior Biologist and Certified Fisheries Professional.Fisheries Technology Associates, Inc.
Back in 2004, I wrote a column about outsourcing and the fact that more and more of our fish were coming from overseas.
Our economy was relatively strong at the time and the high value of the U.S. dollar meant we could buy copious amounts of foreign-made products, including finfish and shellfish.
In that column, I wrote “Outsourcing holds down the prices we pay for the aquacultured products we consume. In a commodity-based economy—in other words, in an economy where price drives demand as opposed to quality or brand recognition—the group of producers or region capable of producing a product for the least cost will dominate the marketplace. Usually, price is king. In short, outsourcing keeps more of the consumers’ money in their pockets, and that’s not a bad thing.”
Despite the financial crisis of 2008 which brought about severe and ongoing recession in the U.S., the world has not made a complete about-face. We still generate an enormous trade deficit in seafood. But the tide has turned in some very important ways.
First, the value of the dollar has fallen significantly. This means that imports become less affordable and exports become more attractive and affordable to foreign markets.
Second, average wages paid to U.S. workers have been flat or slightly falling during the last decade. Instead of more disposable income, we have the same or less income and must tighten our financial belts.
Third, the standards of living in other nations and the wages they pay their workers have increased substantially. There is more opportunity for foreign markets to demand more of our goods.
What we are finally seeing in this increasingly globalized economy is an unfolding process whereby much of the rest of the world is “catching up” to the U.S.—both in terms of standard of living and in terms of income and spending (mandatory and discretionary).
In many ways, Americans lament this trend—our era of conspicuous consumption of cheaper foreign goods is narrowing or closing. However, for domestic aquaculture, a window of opportunity may be opening.
As foreign wages rise, the cost of foreign-raised finfish and shellfish will rise. This will create a more even playing field for finfish and shellfish produced here in the U.S. A weakening of the U.S. dollar will only enhance this effect as American-produced, aquacultured finfish and shellfish become more affordable to foreign consumers.
What’s even more interesting is that the U.S. has been for a long time, and will continue to be, a world center of aquaculture innovation. Despite our economic woes, The U.S. will continue to be the best incubator on earth for new ideas and ways to produce fish more efficiently.
The highest quality and highest value aquacultured products will be produced here in the U.S. in highly efficient, relatively compact (i.e., more highly intensive), technically sophisticated, and environmentally friendly facilities. New species and product forms will be our strong suit. Sure, the imported commoditized products will capture their share of the market. However, we will cater to a different and more discriminating and economically affluent and knowledgeable clientele (both here and abroad) at prices that are acceptable to them and allow us to maintain reasonable or even exceptional profitability.
I’ve mentioned this before, but more Americans are paying closer attention to the proximity in which their food is produced. They want to feel good about their purchases and they know that Americans will produce fish that are wholesome, healthy, and produced in ways to minimize environmental impacts and so-called carbon footprint. As we all know, our current regulatory system is one of the most stringent in the world. It’s about time that we use it to our advantage.
Rather than view our current economic predicament as a liability, we should view it as an asset and be prepared to take advantage of a changing world. I predict that more and more American consumers will look inward and close to home to purchase their finfish and shellfish.
The economic crystal ball is in clear focus. We simply have to read it.
Source: Fisheries Technology Associates
