High demand abroad makes fishing an export-driven industry
Los Angeles, CA (PRWEB) August 17, 2012
The US Fishing industry operates commercial fishing on a global scale. Exports account for almost all of the US industry's revenue, and imports largely satisfy US seafood demand. In other words, fish caught in American waters mostly end up on foreign plates where intense demand outstrips the available supply. In turn, supply shortages overseas due to strong demand make prices more lucrative for US operators. According to IBISWorld industry analyst Josh McBee, “in Asian countries especially, US fishing firms can sell at better prices than at home.” Meanwhile, Asian fisheries are able to supply fish cheaper than domestic operators; thus, the industry has acquired a trade deficit of about $7.0 billion for much of the past decade. The trade-weighted index plays a key role in understanding revenue movements; an overall depreciation of the US dollar's value over the past five years has rendered a favorable environment for exports. Other influential factors on revenue include downstream demand from seafood preparation and per capita seafood consumption, while the prices for oil and seafood factor into profit margins. In the five years to 2012, industry revenue is expected to grow at an annualized rate of 4.6% to $5.7 billion on the back of strong export sales. In 2012 alone, revenue is expected to grow a marginal 0.6%; while disposable incomes increase, export demand is expected to level off as contamination fears following the Fukushima reactor scare in Japan die down.
Most participants in this industry are relatively small nonemploying firms. As such, industry concentration is very low. Fisheries management policies that restrict the number of operators issued commercial fishing licenses have increased concentration. Likewise, the limited availability of licenses spurs competition in the Fishing industry. Greater government regulation could increase concentration. For example, a reduction in the number of vessels permitted into a particular fishery would allow remaining incumbents to increase their share of the annual catch. “If some firms succeed in cornering a market with exclusive legal rights to certain waters, their business could expand to gain a significant market share,” says McBee. Even if such a scenario did occur in the United States, industry concentration would remain low because nonemployers currently have such a vast majority of establishments.
Overall, reduced per capita disposable income in the past five years has driven US consumers away from fish and seafood purchases, as fish and seafood are often featured as part of the "white tablecloth" dining market. Although concerns about red meat's reported links to increased cancer risks have driven consumers to the industry's alternative protein source, seafood's higher prices relative to chicken and turkey have failed to fully capture the health-minded market. However, as the economy recovers and consumer spending picks up over the next five years, sales of fish are expected to rise. In addition, the trend toward health-consiousness is expected to gain traction, supporting demand. Through 2017, the Fishing industry is forecast to grow at at a steady rate. As marine-bound animal stocks recover after the 2010 BP oil spill, operators in the Gulf will be able to yield more pounds per catch and rebuild revenue. For more information, visit IBISWorld’s Fishing in the US industry report page.
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IBISWorld industry Report Key Topics
Firms in this industry primarily catch finfish, shellfish and miscellaneous marine products for commercial sale with little to no alteration or further processing. Aquaculture is excluded, and firms that realize the bulk of their revenue through fish processing are also excluded.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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