Abstract

The shrimp industry is by far the largest income generator among the Gulf of Mexico commercial fisheries. Since the 1990s, however, its economic viability has rapidly deteriorated due, primarily, to an increasing import base and a concomitant decline in the price of the harvested product. The harvesting component of the industry has responded to the economic decline by significantly reducing effort primarily via a large decline in the number of vessels targeting shrimp. While the impacts on the harvesting sector associated with increasing imports and declining output price have been theoretically and empirically analyzed in a number of studies, the impacts on the processing sector have not been considered in great detail. On one hand, domestic shrimp processors may benefit from higher imports as they present an additional source of raw material that can potentially be used in domestic processing activities. However, imported processed shrimp may also compete directly with domestically processed product. Direct competition between imported and domestically processed shrimp becomes more likely as overseas processors increasingly move to value-added processing activities. The purpose of this paper is to examine the impact of imported shrimp on the Gulf of Mexico shrimp processing sector. The analysis will be conducted by product form and with an emphasis placed on changes in marketing margins and subsequent changes in market structure.

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