Rising Demand, Main Reason for Higher Seafood Prices

Hardly a day goes by without another story popping up in the media about the soaring price of food, so I think it’s worth another look at what’s behind the rising price of fish.

Oil prices, of course, are one obvious reason. Chasing fish around the ocean costs three times as much as it did two years ago. And almost every cost associated with processing that fish, from packaging to icing and freezing, has gotten more expensive, as has the cost of transporting that catch to market, whether by ship, truck or airplane.

As people age they are increasingly concerned about eating as healthily as possible, which means they eat more fish.

The price of farmed seafood is also going up. Take shrimp, for example. Farmers say the price of feed, their single largest cost, has jumped more than 50 percent over the past 12 months. That has pushed the price of farmed shrimp up 25 percent since the start of the year. Farmed salmon prices have also jumped, however, not by as much.

The aquaculture industry seems resigned to the fact that production costs will keep going up. Already, some 80 percent of all the fish meal being produced around the world is being used in aquaculture. And since stocks of the fish used to produce fish meal are already fully exploited, demand for finite supplies of fish meal will keep pressure on prices.

Even though shrimp and salmon prices have jumped, they are still at much lower levels than they were 15 years ago.

But the main reason there will be long-term pressure on seafood prices is the simple fact that demand is growing faster than supply. In the U.S., for example, the Baby Boom generation is entering into its peak seafood consumption years. Demographic studies have shown that as people age they are increasingly concerned about eating as healthily as possible, which means they eat more fish. And then there’s China.

Demand for fish in the world’s most populous—and increasingly prosperous—nation continues to grow at an amazing rate. This June I traveled from Hong Kong in the south to Qingdao in the north and saw yet again how China’s prodigious appetite for anything that swims is dramatically altering global seafood trade. The Chinese have a saying—“Without fish there is no dinner”—and they are casting their nets far and wide to find more fish these days.

Seafood, much of it imported, on display at a new buffet restaurant in Beijing which seats more than 2,000 people and is usually booked weeks in advance.

A 4-6-ounce portion of fish is the ideal size, both for your health – and the health of your pocketbook.

While no one argues that fish prices are probably going to stay at these higher levels, it’s worth keeping a few things in perspective. First, even though shrimp and salmon prices have jumped, they are still at much lower levels than they were 15 years ago, when aquaculture production really began to kick in. Today, almost half of all the seafood Americans consume comes from fish farms, which has kept prices of a number of seafoods at historically low levels.

And second, there’s no reason to walk past the fish counter and pick up a piece of chicken. Most Americans tend to eat too much protein. A 4 to 6-ounce portion of fish is the ideal size, both for your health—and the health of your pocketbook.

In the meantime, take a look in your frozen seafood section. That’s where we hope you’ll find our value- priced, high-quality Simply Seafood^® line. It’s great seafood –at a great price.

All the Best,

Peter Redmayne
President
Simply Seafood^®