Catfish Farmers Seek a New Hook to Reel In Increased Profits : Aquaculture: The field is getting crowded, so pond owners are turning to specialization to increase profits.
Flashing white along the blue-green surface of Paul Smith’s experimental pond, thousands of albino catfish grazed on tiny pellets of floating feed.
Smith looked on with the pride of authorship, a craggy-featured man with a dark beard and a doctorate in aquaculture. The school of albinos was crafted from nature by man, just as the water in Smith’s 250 ponds was sucked by pumps from an underground aquifer and the floating feed pellets were extruded under heat from a blend of grains and fish oil.
To some, this latest artificial refinement foreshadows the future of fish, or at least catfish. “I have never seen a more beautiful finished product,” fish processor Samuel I. Hinote said.
But in the highly competitive catfish industry, there is an explanation for the albinos that goes beyond their slightly pink appearance on the grocery store shelf.
The white cats, which Smith hopes to market in a year or two, represent one man’s attempt to get an edge on an expanding pack of farmers and processors attracted to an industry that has multiplied sixfold in a decade.
The boom has brought overproduction, with an attendant skid in farm and wholesale prices that has many catfish farmers and processors wondering whether they can stay in business.
“There are too many players out there,” complained Hinote, president of Delta Catfish Processors Inc., the largest catfish processor in the country.
Besides tinkering with albinos, Smith and other leading catfish farmers recently took an unprecedented step to stabilize their industry and promote future growth.
After studying “bargaining associations” formed by tomato, peach and raisin growers in California, catfish farmers have started to assemble a similar unit to bargain in concert with the processors who buy their product.
Whether the farmers succeed in adding a new level of organization to an industry still in its adolescence, the development demonstrates how far the once lowly catfish has come.
From the river bottom where his wild cousin likes to feed, the cultured catfish has risen to the leading edge of American aquaculture.
Paul Smith’s story parallels that rise. A self-described poor boy who grew up on a Kentucky farm along the Mississippi River, Smith, 45, said he was always surprised that his fish-eating neighbors would pay top dollar for fish out of season. He thought that the domestic cultivation of fish would boost the supply and keep prices down.
Smith started in 1971 as a consultant to fish farmers in Mississippi, where cotton farmers in the 1960s had discovered a new use for their marginal land--catfish ponds. The ponds were easily constructed with bulldozers, the underground water supply could be readily tapped and the clay soil retained the ponds’ water.
Armed with a doctorate in aquaculture from Auburn University, Smith formed a partnership two years later with a Mississippi farmer. Using his partner’s credit and his expertise, the two began building ponds. Since that time, Smith has amassed one of the largest operations in the country--250 ponds on 4,000 acres.
“For somebody with no money and no land, you have to get in on the ground floor of an industry,” said Smith, whose operation has about $12 million in sales each year. “I went to Auburn to learn how to grow catfish. . . . I never dreamed of a scale like this.”
Today, even on a smaller scale, catfish farming requires a fairly sizable capital investment--about $100,000 to build a 20-acre pond and operate it for a year. On Smith’s scale, the enterprise is daunting.
He owns live-haul trucks, seining equipment and aeration devices that maintain oxygen levels in the pond. He also operates a hatchery, where he nurtures his market-proven channel catfish and the albino experiments as well.
Smith’s pond complex, 25 miles east of Greenville in the Mississippi Delta, lies in the heart of catfish country. The state’s 90,000 acres of ponds produce nearly 80% of the nation’s catfish, and Mississippi catfish farmers have taken the lead in structuring the industry.
To assure continued growth and retain greater control of the industry’s various segments, catfish farmers such as Smith have formed cooperatives to produce feed locally and process their pond-raised product. Further, the farmers have financed a marketing and promotion group, the Mississippi-based Catfish Institute.
The institute, besides touting the taste of catfish, commissioned a study recently that demonstrated two other key attributes--nutritional quality and safety. While the marine fish industry has been wracked in recent years by reports of fish contamination, the catfish industry pins hopes on the purity of a fish raised in a controlled environment with few additives.
The study, by Tufts University nutrition professor Joyce Nettleton, pronounced catfish “safe to eat,” as well as high in protein and low in cholesterol.
The result of the efforts by the farmers and the institute has been to place catfish at the top of the heap of domestically cultivated fish. Measured in pounds, nearly four times as much catfish is produced as crawfish, the nearest competitor. Overall, aquaculture accounts for about 10% of U.S. fish production.
But despite the success so far and the projections of continuing growth, farmers and processors find themselves contending with difficulties that elude easy solution.
One is the “off-flavor” problem--at times, a majority of fish in a pond have an unpleasant, earthy taste. These fish are rejected by the processor and remain in the pond until the bad flavor goes away.
Craig Tucker, a fishery biologist at the Mississippi Agricultural and Forestry Experiment Station in Stoneville, said the flavor problem has been traced to chemical compounds produced primarily by blue-green algae.
The algae thrive especially well in ponds where catfish are packed as densely as 12,000 per acre. Hence, proliferation of the problem can be traced in part to farmers’ efforts to boost production. When the algae disappear, the fish flavor returns to normal.
The other serious problem is price instability. The Catfish Journal, an industry trade publication, tracked a 15% drop in prices paid farmers between August, 1988, and August, 1989.
The Department of Agriculture attributes the price decline to a production burst on the farm, but Smith contends that major food chains and institutions that buy catfish from companies like Delta Catfish Processors are simply tough bargainers who have jawboned the price down.
“Their buyers are better than our sellers. It’s just that simple,” he said.
Delta Catfish Processor’s Hinote attributed part of the industry’s price instability to too many processors. In the last two years, he said, 12 new processing plants have come on line and the competition among them has destabilized the industry.
“Since the fall of ‘88, we have gone into a highly competitive processing situation,” he said. “Processing companies are losing very large sums of money, including us.”
In addition to the large Delta Catfish plant and operations owned by agribusiness giants ConAgra and Hormel, a number of new plants owned by farmers and investors has added to the processing ranks.
Smith said he thinks that a bargaining association will solve the farmers’ problems, forcing the price up. Hinote believes that the processing ranks need to thin out some. There is also a more utopian view held by those who believe that the price and competition problems can be solved by growth and more growth.
One of those utopians is Jack Summers, president of a recent entry in the field, Aquaculture Technologies Ltd. Summers’s firm is building a 5,000-acre complex in Lafayette, La., and hopes to market aquaculture products and technology worldwide.
Summers contends that clean, farm-raised catfish are a perfect product for a world in which marine fishing is declining and consumers are worried about food safety.
“We go this environmental routine. We think that is where our market is,” he said. “You know the old expression: If you give a man a fish, he can eat for a day. If you teach him to fish, he can live a lifetime. If you teach him to fish-farm, he can live forever.”
