On Fri, 18 Jul 2008 00:42:07 GMT, notbob > wrote:
>On 2008-07-18, modom (palindrome guy) > wrote:
>>
>> http://www.nytimes.com/2008/07/18/bu...l?ref=business
>
>more login crap
This may be a violation of copyright, but for you...
LELAND, Miss. - Catfish farmers across the South, unable to cope with
the soaring cost of corn and soybean feed, are draining their ponds.
"It's a dead business," said John Dillard, who pioneered the
commercial farming of catfish in the late 1960s. Last year Dillard &
Company raised 11 million fish. Next year it will raise none. People
can eat imported fish, Mr. Dillard said, just as they use imported
oil.
As for his 55 employees? "Those jobs are gone."
Corn and soybeans have nearly tripled in price in the last two years,
for many reasons: harvest shortfalls, increasing demand by the Asian
middle class, government mandates for corn to produce ethanol and,
most recently, the flooding in the Midwest.
This is creating a bonanza for corn and soybean farmers but is
wreaking havoc on consumers, who are seeing price spikes in the
grocery store and in restaurants. Hog and chicken producers as well as
cattle ranchers, all of whom depend on grain for feed, are being
severely squeezed.
Perhaps nowhere has the rise in crop prices caused more convulsions
than in the Mississippi Delta, the hub of the nation's catfish
industry. This is a hard-luck, poverty-plagued region, and raising
catfish in artificial ponds was one of the few mainstays.
Then the economics went awry. Feed is now more than half the total
cost of raising catfish, compared with a third of the cost of beef and
pork production, according to a Mississippi State analysis. That makes
catfish more vulnerable. But if the commodities continue to rocket up
- and some analysts believe they will - other industries will fall
victim as well.
Keith King, the president of Dillard & Company, calculates that for
every dollar the company spends raising its fish, it gets back only 75
cents when they go to market.
"What's happening to this industry is sad, but being sentimental won't
pay the light bill," Mr. King said.
Dillard and other growers take their fish, still squirming, to
Consolidated Catfish Producers in the hamlet of Isola, where workers
run the machinery that slices them into filets. With fewer fish coming
in, Consolidated Catfish is resorting to layoffs.
One hundred employees were let go in the last month, and an additional
200 will be cut soon. President Dick Stevens predicts that by the end
of the year the company will have jobs for only 450, about half the
number at its peak. That might not be enough to keep the plant open.
"The industry is going to implode," Mr. Stevens said. He blamed the
government's ethanol mandates for making fuel compete with food for
the harvest of the nation's farmland. "Politicians were in a rush to
do something, and it became a terrible snowball."
Across the highway, one of the local feed mills, Producers Feed
Company, has already shut down. The ripple effects have begun: between
the grain mill and the fish plant was Peter Bo's Restaurant, locally
celebrated for, naturally, its catfish. Hanging on the door is a "for
rent" sign.
Some catfish producers recently switched to a feed based on gluten, a
cheaper derivative of corn, to reduce their costs. But corn gluten
transportation and prices were particularly hard hit by the Midwest
floods.
"As sick as we were over what happened to the Iowa farmers, we were
also sick over what was going to happen to us," Mr. Stevens said.
It is a feeling echoed by others who depend on corn and soybeans.
In the spring, hog farmers thought they were past the worst. Export
sales to China were strong. Corn appeared to level off. Some farmers
sought an edge by reformulating pigs' diets and reducing the weight at
which they sent the animals to the packer.
"And then corn goes up another buck, and you're back where you were,"
said Dave Uttecht, a producer in Alpena, S.D., who raises 70,000 pigs
a year.
"I'm a farmer. I'm used to peaks and valleys." Mr. Uttecht said. "But
this is like falling into the Grand Canyon."
Smaller herds will eventually put a floor under hog prices, and there
is already some liquidation going on. But in the short term, sending
more hogs to market will increase the supply of pork and push prices
down further. Every farmer is hoping his colleagues will liquidate
first.
"We're all waiting for someone else to blink," Mr. Uttecht said.
Hog farmers at least have the advantage that bacon and pork chops are
solidly rooted in American cuisine, and if you want either there is no
replacement.
In this and many other ways, catfish farmers are not so lucky.
Catfish started out as a local delicacy, widely celebrated in the lore
of the Deep South. Mark Twain saluted it in "Life on the Mississippi."
A character in Eudora Welty's story "The Wide Net" says after stuffing
himself, "There ain't a thing better."
Mr. Dillard, whose operation at its peak was one of the country's five
biggest catfish companies, came to the delta 50 years ago to farm
cotton. He put in some catfish ponds a decade later almost on a whim.
"I liked the way they tasted," he said. "Fried."
Other farmers had the same idea. At first the ponds were put on soil
too dry for cotton. When they proved a better crop, they took over
cotton ground, too. For a long time, everyone made money.
In 2005, according to the Agriculture Department, catfish farming was
a $462 million industry, far exceeding any other American farm-raised
fish. The industry employed more than 10,000 people at its peak,
almost all in Mississippi, Alabama, Louisiana and Arkansas.
Times were too good, perhaps. In retrospect, the name probably should
have been changed. Chilean sea bass would not have eclipsed the
catfish if it were still known as the Patagonian toothfish, nor would
orange roughy have become so esteemed as the slimehead.
"We didn't focus on the market or on the product," said Mr. Stevens,
the processing factory president. "We're the first culprits here."
The industry's decline accelerated when producers from Vietnam and
China flooded the domestic market, putting a ceiling on prices.
Efforts by American producers to portray the imports as unclean and
potentially unsafe did not work. The campaign did, however, achieve a
measure of vindication last summer when the Food and Drug
Administration announced broader import controls on Chinese seafood,
including catfish, saying tests had shown the fish were contaminated
with antimicrobial agents.
Rising feed prices were the final straw for Dillard & Company, which
decided to close last January. Eighty of its 10- to 20-acre pools are
empty already. An additional 170 will follow as soon as their fish are
big enough to sell.
"It's easy. You just pull the plug," Mr. King said, surveying a pool
that was nearly dry. Nearby, half a dozen men were running their nets
through a pond, then hoisting the last of its catfish onto a truck.
"I've been doing this for 23 years," said one of the workers, Craig
Morgan. "I don't know what I'll do now. And there are a bunch of me's
out there."
It is unclear what can replace catfish as easily as catfish replaced
cotton. Attempts to make a tourist industry out of the fact that the
delta was the birthplace of the blues are still embryonic.
"If we don't do something, there will be nothing but tumbleweed here,"
Jimmy Donahoo, a former catfish farmer, said. He, like others in the
industry, thinks the producers should be supported by government
subsidies, just like other farmers.
At Dillard & Company, they are not waiting for help.
"You focus your resources where you can maximize your profits," Mr.
King said. All the empty ponds will be planted with soybeans and corn,
those two commodities for which there seems boundless appetite.
--
modom
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