Pandemic impact spreads to North American aquaculture
March 20, 2020
By Liza Mayer
Seafood farmers grasping at straws as restaurant closures wipe out sales
Disruptions due to COVID-19 have dragged down seafood sales all over North America and the impact is felt across the supply chain. Restaurant closures have badly affected farmers from Alaska to Washington State to their peers in British Columbia all the way to Atlantic Canada. From the amount of stories shared with Aquaculture North America (ANA) over the past 24 hours, one can surmise that oyster farmers are the hardest hit by the shutdowns. But farmers raising tilapia, trout, catfish and shrimp also have their own stories to tell.
At Alaska Shellfish Farms in Halibut Cove, AK, business is nil. Owners Greg and Weatherly Bates were forced to lay off their three workers this week. “We are now working our farm with our two children who can’t attend school. Our family is working without pay through this. We’re trying to prepare for when markets re-open,” says Weatherley.
Farm work also has to go on at Cottage City Oysters on Martha’s Vineyard, MA. But without the restaurant orders, co-owners Dan and Greg Martino are leaving the oysters in the waters of the Vineyard Sound, a strategy that’s not without complications. “We expect to receive seed in the spring but it will be difficult to manage the crop as we typically depend on emptying cages (through sales) that we can then utilize for the seed. This year we won’t have those empty cages for the seed,” says Dan.
Retired Louisiana Sea Grant researcher John Supan, who co-owns Navy Cove Oyster Co LLC in Ft. Morgan, Alabama, faces the same problem. Leaving the oysters in the water until the market demand resumes brings another issue. “We’re selling a brand like everyone else and we don’t want the oysters to become too big. If worse comes to worst, we can sell them to processors who shuck oysters for meat but that brings in 20 cents a piece instead of 50 cents a piece for half shell,” says Supan.
The Martino siblings have shifted to selling online and delivering via UPS or drop-off spots where locals can pick up orders.
At Navy Cove, the idea of offering oysters at a roadside stall came to mind but was quickly ditched. “The farm is isolated so there’s not much traffic. We also would have to get a distribution license first because at the moment we are not licensed distributors. We sell our harvest to Bon Secour Fisheries, which then sells it to restaurants,” says Supan.
He adds: “We’ve put together a little blurb that we’ll send out the people saying oysters are very high in zinc so it boosts the immune system: ‘Don’t take zinc, just eat oysters!’ But the challenge is getting the oysters into the consumers’ hands.”
The Martinos say farm tours, which run from May to October, have also suffered. “Martha’s Vineyard is a worldwide destination and our tours attract a global clientele who are eager to see how shellfish farming is done. In a given year we have hundreds of tourists visit our farm and by now we would be almost sold out. This year we have just one tour booked, which is likely not going to happen,” says Dan.
In Washington State, business has dropped to zero for many of the farms that sell directly to suppliers that cater to restaurants, says David Beugli, executive director of the Willapa Grays Harbor Growers Association. The association represents farmers in the single largest oyster growing area in the US, which produce nearly 25 percent of all oysters in the entire country.
“Clam sales are at a standstill too. Anything that’s for the half-shell has dropped off completely. Retail outlets on farms have also closed,” says Beugli.
One of the association’s members is Taylor Shellfish Farms, the largest producer of farmed shellfish in the United States. The company has left in place a skeleton crew. It has laid off 26 staff, put 215 workers on “standby” and put another 195 in the Shared Work Program.
“The standby category means they too have been laid off but the classification allows them to collect unemployment over a maximum of eight weeks without actively looking for work,” says Bill Dewey, director of public affairs.
“We are hoping the government will extend that as it looks like it will go longer for at least some of our workers. The Shared Work Program is for workers on reduced hours. It allows them to make up some of the lost income on other jobs or from unemployment,” he says.
At Fanny Bay Oysters in British Columbia, an operation owned by Taylor Shellfish, 13 out of the company’s 88 workers in the province were let go on Friday, March 20. Roughly 15 percent of the company’s production goes to restaurants, including to its own Fanny Bay Oyster Bar & Shellfish Market. The Vancouver restaurant has been shut down temporarily.
“Demand from restaurants has gone down to zero. We just harvest less of the product and keep the oysters in the beach until demand comes back,” says Fanny Bay general manager Brian Yip.
L’Étang Ruisseau Bar, a New Brunswick hatchery that accounts for roughly 90 percent of the hatchery business in the province, has not been spared. “Our hatchery is still in production because stopping now would be disastrous and affect the seed supply for all of Atlantic Canada,” says Martin Mallet, hatchery manager.
“Sales have evaporated. We work mostly with shellfish wholesalers that supply the restaurant industry, which has been the hardest hit by the pandemic. Unless we change our model in very short order, we could be looking at essentially zero sales over a period of months,” he continued.
He feels fortunate the company is in good financial health. “Government initiatives aimed at helping businesses get through this will also make a difference for us and our staff,” he says.
Back in Washington State, the Jamestown S’Klallam Tribe is reeling from the COVID-19 disruptions. The 575-member indigenous community calls aquaculture the cornerstone of their economy. The tribe has two shellfish hatcheries that grow oysters and geoduck seed for their own use and for sale to other farmers. They grow oysters, geoduck and Manila clams to market size in their tidelands.
Says Kurt Grinnell, CEO of Jamestown Seafood and Aquaculture: “Seafood sales are a revenue generator for the tribe. It pays for our social services and our health care, education, programs for our elders and children, affordable housing and restoration projects. Oysters are mostly consumed at restaurants, which means markets for our oysters have dried up. We aren’t selling any oysters other than shucked oysters right now so unfortunately we’re letting go some workers.”
The geoducks business isn’t any better, he says. “We sell the majority of our geoduck in China and they’re struggling too. This has a cascading effect on our operations as a whole. We’re living the same basic nightmare that the rest of the Americans and the rest of the world is living.”
BC seafood distributor Blundell Seafood acknowledged the restaurant closures has forced it to cut down on the Atlantic salmon orders. “A lot of Japanese restaurants we supply to use Atlantic salmon and there’s not many restaurants open now,” says Stanley Kwok, Assistant General Manager.
He noted however that orders from retail clients for steelhead are “still going strong, surprisingly.”
BCSFA spokesperson Shawn Hall is not surprised. “Retail demand is increasing as families are looking for healthy meals to cook at home,” he says.
He also said none of the BC Farmers are affected by the closures of the US-Canada borders because food is an essential service.
In Atlantic Canada, salmon farmers have not required any changes in production plans due to COVID-19, says Susan Farquharson, executive director of the Atlantic Canada Fish Farmers Association. “Getting farmed salmon to local and US markets remains a priority for our members. Today, our companies have not required any changes in production plans due to COVID-19,” she says.
Katie Mackey Harris, president and general manager at Mt Lassen Trout & Steelhead in Paynes Creek, California, says the stay-at-home order of California Governor Gavin Newsom beginning Friday midnight, 20 March, “effectively put a stop to all of the markets we serve at my farm.”
“As of right now, we have no sales for the foreseeable future and this is traditionally our busiest time. Our other markets are the restaurants, which are also closed. I pray this ends quickly but I am not optimistic given the conditions here in California. My goal is to try to stay in business with as few layoffs as possible,” says Harris, who is also the president of the US Trout Farmers Association (USTFA).
“For many trout farmers the summer is the busiest time for the recreational fishing industry. In places like California where the weather is warmer, the winter and spring are the busiest times for recreational stocking. How long these quarantines last and when stocking can resume or begin will probably dictate the fate of many farms.”
The world’s leading producer of eyed trout eggs, Troutlodge, has ensured clients and the industry that it is prepared to continue delivering trout eggs amidst the challenges. “Troutlodge’s role as largest trout genetic company in the world is critical for global trout production,” said the Washington State company in a statement. “That’s why we’re taking additional measures to protect our people, our fish and our trout eggs.”
“We know these turbulent times could require investigating alternate routes or different carriers, but we come prepared. With almost 80 years of experience shipping eggs to more than 60 countries around the world, we are very resourceful in delivering your trout eggs to your doorstep any day, as long as borders are open to goods,” it says.
Blue Ridge Aquaculture, the world’s largest producer of indoor-raised tilapia, has seen sales drop by an average of 20 percent since the onset of the pandemic. The Virginia-based company sells 90,000 to 100,000 live fish a week to three major markets in the United States.
The closures of restaurants in New York accounted for the bulk of the decline, says Bill Martin, owner and president of Blue Ridge. “In New York, the restaurants have all been ordered to close. And the supermarket business is down because the employees do not want to come to work. I understand that,” he says.
He believes the market disruption is still “not at its pinnacle.”
“It’s going to slow down some more. We anticipate it’s probably going to be down by 40 percent at some point.”
But he is not worried, he says, because tilapia enjoys a niche market in the United States. “It is as much as a staple to the Chinese market in the US as rice.”
“We got very good finances so we’re not overly concerned,” he added. “Most farmers in our business don’t have big supply of cash and that’s too bad because when business goes down by 50 percent and you got not cash that makes it really difficult.”
“I’m not scared to death like everybody else.”
At Kyser Family Farms in Greensboro, AL, the impact of restaurant closures has not been felt but Townsend Kyser III, who runs the farm, believes it’s a matter of time.
“We might not be (affected) today but it will begin to trickle down our way as time progresses. Hopefully we can increase some retail sales and get people to buy catfish in grocery stores,” says Kyser, who is also the chairman of the Catfish Farmers of America.
Sales to the restaurant sector accounts for roughly 70 percent of catfish sales, he estimates. To shift sales to retail, farmers groups are stepping up marketing efforts to inform people that catfish is an easy thing to cook and a great source of protein. One avenue is www.USCatfish.com. “Besides, it’s got six months of shelf life so people could stock up,” he says.
Alabama produces roughly 130 million pounds of catfish annually, or roughly one-third of America’s catfish.
“We are seeing some decline in fresh fish sales. Today I don’t know of any and I am not saying that there are, but if processors stop processing fish we would not be able to sell them and that would cause a cash-flow problem. We’re coming into our feeding season and so we need to keep everything moving. We need to keep our supply lines of foods, any food, to keep everyone fed.”
He says he is glad to hear “someone in Washington” finally acknowledging aquaculture and the pandemic’s impact on the sector.
“I’m kind of upset that they have been lumping all seafood into (the category) agriculture and now they’re finally realizing how much aquaculture might be affected by this. Today’s the first time in a week-and-a-half I’ve heard anyone say that. I’m glad that somebody’s finally acknowledging that. We can go without crew ships, we can go without Disney World, but we can’t go without food,” he says.
In the farmed shimp sector there have been no layoffs as of yet, says Granvil Treece, Texas Aquaculture Association board member and aquaculture consultant at Treece and Associates.
Shrimp’s position as the most popular seafood among Americans perhaps has something to do with it.
“The two farms with hatcheries in Texas are getting started. They are stocking into nurseries for a month to six weeks until outdoor pond temperatures are high enough to support growth. Then they will be moving the one-month to six-weeks-old juveniles to the ponds and restocking the nurseries for the second summer crop. As far as I know there has been no change in these plans because of the virus,” he says.
Gregory Whitis, an aquaculturist at the Alabama Fish Farming Center who helped build Alabama’s shrimp industry, is more worried about hatchery workers being unavailable as part of health and safety measures. He is not surprised seafood sales are softening. “Seafood is mostly consumed in restaurants,” he says.