Shrimping Costs questions

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diesel fuel is $5 per gallon and he can only sell shrimp for $1 which obviously doesn’t net him any profit.

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Wut

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he can’t profit off of shrimp because diesel fuel is $5 per gallon and he can only sell shrimp for $1 which obviously doesn’t net him any profit.

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Well, how many gallons of fuel are needed vs. how many pounds of shrimp he can sell?

The scenario you presented is not as simple as $5 COGS vs $1 revenue.

I'd ask your dad. He has 30 years of experience in the shrimping business.

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I always felt like someone was undercutting him

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Yes, the Chinese, with the help of the U.S. government.

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My dad lives in the gulf coast of Mississippi. Shrimping is his livelihood— doing this for over 30 years.

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jtran1988

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tran

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checks out

A couple of points -

Diesel is high right now but not $5/gallon for off road fuel purchased in bulk which is the only way a business like his should be buying it.

If he is trawling year round, he's in Fed waters and because his boat docks in MS doesn't mean he is shrimping there. How far out and where (east/west) is he going?

Every commercial fisherman I've ever met talks to other commercial fishermen. They don't always speak truthfully but considering that, what is he hearing from his peers - price, expenses, yields, etc?

he can run red diesel in the shrimp boat which shouldn't be 5 dollars. Also, if he's getting only a dollar a pound it's because he's selling it mixed straight to some shrimp house, probably ran by Vietnamese. Needs to get his own marketing and sell it directly to consumers, which requires more personnel, or cull it out more to get higher margins on pre-sorted shrimp. That also requires more personnel. It's not an easy business anymore for an individual just wanting to run the boat. It would take some significant funding for an individual to start out in the business fresh and slightly less significant funding to improve the business from where it sounds like he is at. Also, does he have a federal waters license, or just state waters?
At this point, it is kind of like farming and fairly commercialized. I know someone who had some serious cash to throw around that did it for a while, talking 500k probably spent, no longer in that business, and certainly took a loss in the long run before calling it quits. Good luck to your pop.

candlesticks make a nice gift

There's no money in it anymore. Used to actually be pretty lucrative. Foreign imports have decimated the industry. To head out for a week, up front you're buying hundreds of gallons of diesel, ice, groceries for the week, etc. The sheds are only giving $1 to $1.50 a pound. Selling to the public is more profitable but can also take more time that you could be out there catching more shrimp. Breakdowns and other unexpected expenses are inevitable. The only guys making any money are the ones that can stay out longer, or the small skiffs that go in and out.