In the federal government’s efforts to help farmers and ranchers survive this year’s devastating drought, perhaps the most surprising step has been a dose of support for struggling producers of catfish. ...
... catfish assistance came as part of a $170 million federal purchase of pork, chicken, lamb and fish announced in early August, all intended to prop up farmers hit by skyrocketing prices of feed like corn and soybeans.
The Agriculture Department, in addition to its routine purchases for school lunches and food banks, would buy an extra $10 million of catfish, the administration announced.That would be more catfish than the government bought all last year, and enough to put a significant dent in a glut of catfish that has left fish farmers squeezed this year between rising feed costs and falling prices for the fish. ...
The glut that has depressed fish prices built up suddenly this year, to the industry’s surprise, after a shortage last year after increasing numbers of farmers bailed out.
Inventories of frozen catfish doubled to about 10 million pounds from about 5 million in the last year, according to the government. In effect, the government will soak up most of that increase.
But nobody expects the federal purchases, equivalent to about one week’s national sales of processed catfish, to bring the price at the pond up to the break-even point or to affect the price of feed in any way, or to offset import competition, which was up 30 percent in June from a year earlier.
If there was a shortage that led to exit from the market in a first year and then a surplus the following year, private demand must have fallen and/or catfish imports are preferred by consumers (because they are cheaper). Government support of the market is likely a losing battle (as most always).