220.127.116.11 Gulf Shrimp Dealer/Wholesaler Sector
In addition to the harvesting sector, dealers/wholesalers play an important role in the Gulf shrimp industry. Unfortunately, no studies have been done to specifically examine their current economic performance. However, given the documented declines in the harvesting sector and the processing sector, and also given the fact that many dealers are also harvesters or processors, it is logical to conclude that this sector is also experiencing adverse economic conditions for the same reasons. These adverse conditions have also been exacerbated by the destruction of facilities as the direct result of Hurricanes Katrina and Rita in 2005.
This sector is characterized in Table 5.12 . In 2002, 626 dealers were identified in the SLF data. Note that this figure is considerably higher than in previous, recent years. For example, between 1999 and 2001, this figure was in the 310 to 320 range. Such a dramatic increase is inconsistent with the hypothesis that this sector was also experiencing harsh economic conditions. However, the answer to this apparent mystery lies primarily in certain harvesters’ responses to the poor economic conditions.17 Specifically, in their attempts to reduce costs and obtain higher prices for their product, it appears that many harvesters decided to remove one of the so-called “middlemen” by obtaining dealer licenses themselves in order to sell directly to the public. An in-depth examination of the data appears to support this conclusion.
Specifically, and as is suggested by the statistics, there is considerable heterogeneity within this sector with respect to individual dealers’ volume and sales. The data indicate that, of the 623 dealers reporting sales figures, 63.4% (395) reported food shrimp sales of less than $100,000. Of these, over 70% reported sales of less than $10,000. It is highly likely that the vast majority of these dealers are in fact harvesters who decided to obtain a dealer license and sell their own product rather than sell through a traditional dealer/wholesaler. When you factor out these dealers, that leaves 228 dealers who sold more than $100,000 of food shrimp. This figure is closer to what would be expected given numbers from previous years and prevailing economic conditions. These firms are likely the traditional dealers that have dockside businesses/facilities. Of these 228 dealers, 139 had food shrimp sales volumes between $100,000 and $1.0 million, while the remaining 89 had sales exceeding $1.0 million. Many of these 89 dealers are also processing firms. Three firms had sales exceeding $10.0 million.
18.104.22.168 Gulf Shrimp Processing Sector
With respect to the processing sector, descriptive statistics regarding employment, overall volume and sales, and food shrimp volume and sales is presented in Table 5.13. As with the harvesting and dealer sectors, there is considerable heterogeneity within the processing sector regarding employment, volume, and sales. The data indicate that 21 processors had less than $1.0 million in food shrimp production, 22 had between $1.0 and $5.0 million, 9 had between $5.0 and $10.0 million, 11 had between $10.0 and $20.0 million, and the remaining 11 exceeded $20.0 million.
17Improved identification of dealers also plays a role, though it appears not a significant one.