Market Trends of united states shrimp Industry
The lack of shrimp producers is the reason for slow growth
- Commercial shrimp production in the United States saw a slow but consistent growth rate, registering a CAGR of 0.66% from 2017 to 2022. Most of the shrimp is shipped in frozen form across the country or to processing plants where it is aseptically processed and canned to prolong shelf life. Louisiana had 33,554 MT of shrimp in landings in 2021, becoming the country's largest producer, followed by Texas, with a comparative production volume of 29,410 MT, Oregon (21,171 MT), Alabama (11,137 MT), and East Florida (10,403 MT).
- The lack of shrimp producers is one of the main reasons for this slow growth in the country. Texas currently has about six or seven shrimp producers, as unaffordable shrimp imports forced many of them to switch from shrimp cultivation to finfish farming. Lower shrimp feed prices in 2020 encouraged shrimp farmers to invest more in production, resulting in lower prices for the end product. However, post-pandemic, high freight rates, rising marine fuel costs, and logistical disruptions pushed shrimp prices higher. Thus, the average shrimp price in 2022 increased by 7% compared to 2021, to USD 15/kg.
- Feed represents almost 40% of the shrimp production costs. Feed is mostly imported from Asia, as it is costly to set up and own a shrimp feed manufacturing facility in the United States. Investment costs for grow-out facilities in the country have been cited at about USD 64,000 per hectare, with a yield of approximately 2,270 kg per hectare per year. Shrimp feed is imported from countries like India, where the cost of setting up a facility is only around USD 400 per hectare, with an annual yield of 600 kg per hectare. However, shrimp feed manufacturers in the country tend to import raw materials from China to manufacture domestically.
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The rising cost of marine fuels and logistical disruptions led to higher prices
- High freight rates, the rising cost of marine fuels, and logistical disruptions, including bottlenecks at seaports and shortages of logistic workers in the United States and Europe, may boost the wholesale prices of shrimps in the country. The demand for shrimp is anticipated to grow rapidly in Eastern and Western Europe and the United States. Rising logistic expenditures are expected to be the main drivers of this spike. Between September 2021 and September 2022, international freight costs from Asia to North America for 20-foot and 40-foot containers rose by 500% and 700% (at USD 13,000 and USD 20,000), respectively, due to supply chain disruptions. This rise resulted in a 15.6% increase in retail prices of shrimps from 2017 to 2022.
- Shrimp sales have increased in recent years, as many restaurants in the United States converted to take-out, online deliveries, and delivery services. Online shrimp sales in the United States increased by 167% in 2020, 42% in 2021, and 30% in 2022, thus showing the growth of the sub-segment. However, trade tensions and tariffs imposed on seafood products by the United States impacted the price increase by 12% in 2022 compared to 2021. Total US imports increased moderately by almost 3.8% from January to June 2022 as the demand for raw products declined. Consumer demand for peeled shrimp, which is commonly used in restaurants, was particularly low. Imports of processed shrimp increased by 29.79% in 2021 compared to the previous year. The United States imported record volumes of shrimp, and almost all varieties witnessed high price levels, even with record volumes being shipped by exporting countries. The United States imported 78,716 tons of shrimp in January 2022, as opposed to 69,653 tons in 2021, for a unit value of USD 5.1 per kg.
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