U.S. Catfish industry gearing up for fight over cheaper Vietnamese imports

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Posted 8:22AM on Monday, April 22, 2002

INDIANOLA, Miss. - America's catfish industry, stung by dropping prices triggered by a flood of cheaper fish from Vietnam, is gearing up for a possible antidumping campaign. The effort led by Indianola-based Catfish Farmers of America is coupled with a plan to hire inspectors to assist federal regulatory agencies in enforcing a new catfish labeling law. Congress in November barred importers, restaurants and grocery stores from labeling fish from Vietnam as catfish. Hugh Warren, executive vice president of CFA, said the Vietnamese fish, which resemble the American catfish, have captured as much as 20 percent of the frozen catfish filet market. Warren describes the imported product as a cheaply produced, low-quality fish that isn't even in the same family as U.S. farm-raised catfish. "While their volume is going straight up, their price is going straight down," Warren said of the imports. CFA has hired a Washington law firm to begin preparing a possible antidumping petition to be filed later this year with the Department of Commerce and International Trade Commission. Warren said there is also a need for inspectors to help make sure the new labeling law is enforced. "Importers are just hiding and dodging," he said. "As long as misrepresentation continues, they will make millions of dollars off of this sham and nobody wants to quit the sham while its working." Protecting a domestic industry that had revenue of more than $590 million last year is vital to the South. The greatest concentration of catfish farms are in Mississippi, Alabama, Arkansas and Louisiana. There are more than 190,000 acres of catfish ponds in the United States with 110,000 of those acres in Mississippi. The average price processors pay farmers for catfish has fallen over the past two years. It was 74 cents per pound in January 2000. "I know of processing plants paying 58 cents a pound now," Warren said. "That's below the cost of production, which varies from operation to operation. It is anywhere from 65 to 70 cents a pound for break-even cost." George Hastings, president of AquaPro, a publicly traded catfish farming operation with 2,600 acres of ponds in the Mississippi Delta, said the imports had created major financial problems for growers and many could be forced out of business. "The Vietnamese fish jumped from a production that was about 200,000 pounds in a month to a number between 1.5 million and 2 million in a month," Hastings said. He said the full impact hit American growers last spring after they had already stocked their ponds for the current growing season. Hastings said that with the increase in fully prepared filets from abroad, prices for domestic filets did not climb as usual during the Lenten season and processors began calling on farmers to supply larger fish to produce filets that would not be in direct competition with the imported filet sizes. "The problem is it takes another 90 days to move this huge fish inventory in our ponds from a pound to a pound and a quarter," he said. "We went through a period of little or no cash flow as we grew this larger size." Hastings said the result was a financial nightmare for farmers who had to keep up with loan payments while meeting the high feed demands of the summer months. "It's in the math," he said. "Since this summer, AquaPro has sold nearly 8 million pounds of fish at an average of a little more than 20 cents a pound below normal, on top of having to go 90 days without any cash flow. For us it's been devastating." Andrew Forman, an importer of the Vietnamese fish, said any antidumping petition by Catfish Farmers of America would be just another "feeble attempt to justify their lack of performance." "What they are saying is this product is not a catfish, but it's hurting the catfish business," said Forman, president of Infinity Seafoods Inc. of Franklin, Mass. "It is sort of like saying the price of apples is affecting the demands for oranges," Forman said. "It's bogus and they are grasping at straws." Forman said the domestic catfish industry has been unable "to convince their own clientele in their own backyard that this foreign product is inferior or that their domestic product is better." But Warren said restaurant and grocery stores are buying the imported fish because it is cheap, not because of its quality. There is no way U.S. farm-raised catfish can match the imported price because of the higher labor cost and the money the domestic industry spends to meet federal regulations, Warren said. The Vietnamese fish, which are raised in cages along the Mekong Delta, don't face the same regulations, he said. "Do you think any of our regulatory agencies would allow us to grow catfish in cages in the Mississippi River? Could you imagine the human outcry?" Warren said. "They would have us shut down by nightfall." Bill Allen, president and chief executive of Indianola-based catfish processor Delta Pride, said the new labeling law may help bring the price of catfish back up -- if it can be enforced. "When you unload it (Vietnamese fish) from a barge in the United States, it will probably have the right name on the master case," Allen said. "How are we going to enforce it from there to a grocery chain, to a restaurant, to a retail market? That remains to be seen." End ADV for April 20-21