An Analysis of the World Shrimp Market and the Impact of an Increasing Import Base on the Gulf of Mexico Dockside Price
As a result of increased cultured activities, the world shrimp market has been expanded significantly during the past two decades. Because the growth in world supply has exceeded that of growth in demand, the deflated world shrimp price has fallen significantly since the mid-1980s. While a large producer of shrimp (primarily in the Gulf of Mexico), the United States is also the worlds largest importer. In general, the Gulf of Mexico dockside price is determined by the world export price and, as such, the Gulf of Mexico price has fallen sharply in recent years. This study quantifies the impact on the U.S. Gulf of Mexico dockside shrimp price associated with increased cultured shrimp activities and concomitant increased exports to the U.S. market.
For purposes of analysis, a set of import demand and export supply equations were estimated. Specifically, import demand equations were estimated for three countries (regions) that account for the majority of shrimp imports the United States, Japan, and the European Union. Similarly, export supply equations, were developed for the three primary warm-water shrimp producing regions Asia, South America, and Central America. Finally, an inverse demand equation associated with U.S. Gulf of Mexico shrimp production was estimated.
Results suggest that the increased cultured production from the three regions has had a significant impact on the Gulf of Mexico dockside price. For example, results indicate that the Gulf of Mexico dockside price is expected to decline by approximately 3.5% for every 10% increase in Asian production of cultured shrimp. Similarly, analysis suggests that the estimated decline in dockside price associated with a 10% increase in South American cultured shrimp production is 2.2%. While an increase in Central American cultured shrimp production was also found to significantly reduce the dockside price, increases in captured shrimp production were found to have a greater impact.
Advisor:Walter R. Keithly Jr.; Richard F. Kazmierczak; P. Lynn Kennedy
School:Louisiana State University in Shreveport
School Location:USA - Louisiana
Source Type:Master's Thesis
Keywords:agricultural economics agribusiness
Date of Publication:01/24/2008