MISSISSIPPI STATE – Mississippians do not have to look far to see the impact of the Midwest’s historic drought, as the state’s catfish farmers already feel the pinch of sky-high feed costs.

“There was a window last fall when some farmers were able to book feed at $380 per ton,” said Jimmy Avery, Mississippi State University Extension aquaculture specialist and director of the Southern Regional Aquaculture Center. “Feed costs stayed around $400 per ton for the early part of the growing season but skyrocketed to almost $570 per ton in the last few weeks.
“Couple that increase with fish prices falling from $1.35 per pound to 75 cents per pound, and there is no doubt that the majority of farmers will lose money until something turns around,” he said.

Given current feed prices and the rate catfish convert feed to body weight, about 70 cents per pound of fish goes to feed costs. If fish sell for 75 cents per pound, that leaves only 5 cents per pound to cover all other farm expenses. That amount is only a fraction of what growers need just to break even.

Avery, who is also a researcher with the Mississippi Agricultural and Forestry Experiment Station, said this blow comes on the heels of decreased demand for Mississippi farm-raised catfish.

“The short supply of catfish last summer prevented many processors from supplying long-time customers with the product they needed,” he said. “To make sure the supply to these customers would not be interrupted this year, processors loaded freezers in anticipation of spring demand. In the meantime, many of those customers had found fish substitutes, other fish or severely reduced the amount of fish on their menus.”

He said the resulting high inventory led to a dramatic price decline for the producers.

John Michael Riley, MSU Extension agricultural economist, said the number of catfish produced began dropping in 2009, which led to price increases starting in 2010. The decline in production on the farm continued through the first half of 2012. However, production has begun to level.

“For a while, higher prices helped alleviate the increases in feed costs, but the recent run up in those costs, coupled with a drop in output, could push more producers out of business,” he said.

Some think the high cost of feed is related to ethanol production, which relies heavily on corn. A federal mandate requires all gasoline for consumer vehicles to be blended with 9 percent ethanol. This demand for ethanol reduces the corn available for consumption. Consumers, politicians and even the United Nations have petitioned the United States government to lift the federal mandate to relieve pressure on the corn market for the sake of the world’s food and feed needs.

Lifting the mandate would not automatically reduce the stress on catfish growers, Riley said.

“Corn accounts for roughly 20 percent of the catfish feed, so it would have less of an impact than on cattle or poultry, but any relief would help,” he said.

To help the nation’s meat producers, the U.S. Department of Agriculture recently announced a $170 million meat buy-up. That includes up to $10 million in catfish. While this effort may help decrease the inventory processors are holding, it is a small portion of the nation’s catfish production. The value of catfish products sold in the United States was $546.82 million over the last 12 months.

At its peak in 2001, Mississippi’s catfish industry had 113,500 acres in ponds. In 2012, only 51,200 acres of ponds are in catfish production, down 4,300 acres from 2011.

Roughly 82 percent of these ponds are in the Delta, and 18 percent are in east Mississippi. The state produced 215 million pounds of catfish in 2011, representing 51 percent of the U.S. total and a production value of $222 million.