Fishing ship

Troubled
 waters for fishing industry

Labor pressures threaten to drive up
 US seafood prices

Americans and the chefs who cook for them love domestic seafood. But a simmering stew of labor concerns and changing government regulations are merging to create what may become a costly shortage in the supply of those fish.

While many large seafood restaurant chains harvest from international waters, smaller operations prefer to lure customers with local seafood offerings. Without access to those supplies at reasonable prices, many foresee a time when they will be forced to purchase seafood from sources outside of the United States.

“If labor issues make local seafood so expensive that our customers won’t pay for it, then we have no choice other than to get it elsewhere,” said Greg Reggio, partner and co-founder of New Orleans-based Zea Rotisserie & Grill, an 11-unit chain specializing in crab and crawfish, both of which require human processing. “To live in this area and not be able to utilize that resource because processors can’t get the labor to do it would be a sin.”

Though no official studies have been conducted, fishing industry experts say boat captains are an aging lot, and there aren’t a lot of new kids on the dock set to replace them. Seafood processors recognize that problem, as well, but they believe that particular crisis is still years away. Their more immediate concern is finding affordable labor to process the bounty already arriving at their plants.

Despite high U.S. unemployment, industry sources say the $8-an-hour average wage for working “the slime line” — gutting fish, cracking crab and stripping squid — is too little incentive for Americans to get dirty.

Yet while there are plenty of legal immigrants eager to do such work, processors claim pending changes in work-visa rules will send labor costs so high they could devastate their firms.

“If we’re going to process crab, we’ve got to have a source of affordable labor, and it’s not going to be Americans,” said Gary Bauer, owner of Pontchartrain Blue Crab, a processor in Slidell, La. “I hate to say that because it makes me sound like I’m judging, but I’m not. They only allow 66,000 H2B [temporary work] visas a year, and these people are happy to come here and perform a job no one here wants to do.”

Labor blues

Bauer cited multiple disasters that have led to as many as one-fourth of all Gulf of Mexico fishermen leaving the business in the past several years. Hurricanes Katrina, Ike and Gustav pounded multiple states’ fisheries, followed by the Deepwater Horizon well explosion in 2010, which kept many fishermen docked for months. Many of those, according to insiders, quit fishing because compensation provided by BP made them so-called “spillionaires” and unwilling to fish.

“We do see some young bucks coming up who have their heads on straight about this business. … But are there enough of them coming in to sustain this as a true fishery? I don’t know,” Bauer said. “Honestly, economics will dictate that more than anything. They’ve got to be able to make money.”

Tyson Fick agreed. As the communications director for the Alaska Seafood Marketing Institute, Fick said the general “graying of America” is reducing the number of fishermen in the Pacific Northwest. But just as detrimental are the climbing costs associated with launching a fishing business.

“If you go back 50 years, when a lot of our old timers were getting started, everything was wide open. You got a boat and went fishing,” said Fick. “Now, they’re dealing with more permitting and quotas — things that are absolutely vital to the proper management of those resources but that present challenges for young people who want to get into fishing. To get a small gillnetter and go fish salmon in Bristol Bay costs $300,000 to get started.”

Mike Hutt, executive director at the Virginia Marine Products Board, added, “Clearly, somebody’s still working out there because product’s coming in and there’s good demand. But the fact is you do lose some as they age. And that does leave some asking whether future generations will take up that heritage and go to the water.”

Ewell Smith said he views the decline of fishermen as potentially dire for the Gulf, calling it “a serious concern for our fisheries” and, ultimately, restaurants and retailers that use Gulf seafood.

“I’m 45 years old, and when we hold our meetings, I’m one of the youngest people in the room,” said Smith, executive director of the Louisiana Seafood Promotion and Marketing Board. “It’s normal that they’re going to retire, but what’s pushed a lot of guys out of fishing are those disasters. It’s one thing to have a crisis or two, but three hurricanes, an oil spill and a Mississippi River flood [in the space of six years] just isn’t quite right.”

Nathan Sears, chef de cuisine at Vie Restaurant in Western Springs, Ill., said any decline in the supply of American seafood would make menu planning challenging. About 80 percent of Vie’s menu is seafood-centered, and 90 percent of that product is harvested from American waters. Switching to imported fish to offset domestic seafood declines is not an option he wants to consider.

“We do get some stuff from overseas, but what we focus on first is the quality of the products we choose, and we like what we’re getting [domestically],” he said.

Sears said choosing sustainable fish also weighs heavily in his decision making.

“We do follow Monterey Bay Seafood Watch closely … so we’re not going to waive our morals and buy something else because it’s cheap.”

Walter Bundy, executive chef at Lemaire in Richmond, Va., said he hasn’t heard any concerns of a potential shortage, but such discussion doesn’t surprise him.

“You wonder whether that way of life is going away when you see bigger fishing companies coming in and people migrating to cities to make a living,” said Bundy. “If that happens and there are less out there, I do think it’ll raise prices because the things the smaller ones catch will become more specialty items.”

For now, Bundy is glad to have “a hook-and-line guy” who brings a wide variety of fish to his door for far less than he’d pay through a seafood distributor. That news pleases Monica Allen, spokeswoman for the National Marine Fisheries Service in Silver Spring, Md. She said such dayboat work is an emerging outgrowth of what the locavore movement has done for boutique farms. Now, many fishermen are bringing their catch to farmers markets.

“We’re also hearing about community-supported fisheries in coastal areas, where people buy shares, just like they do with farms,” Allen said. “I don’t think it’s universal by any means, but we are seeing young entrepreneurs getting into this business — things like oyster farming and ground fishing. It certainly gives us hope.”

Looming interruptions

Even if the ranks of fishermen continue declining at the rate LSPMB’s Smith sees, he said a real crisis is likely five to 10 years away. Currently, he and his constituents are most concerned about the looming labor shortage at processing houses.

Upcoming changes to wages and temporary work visas — which LSPMB and similar organizations representing processors are working to prevent — would be financially significant for processors. Prevailing wages would spike from around $8 an hour to between $10 and $14 an hour, depending on the region, and processors would have to guarantee foreign workers 75 percent of their estimated seasonal pay regardless of whether there is fish to process.

“What if we have a disaster like we’ve had in the past few years, and you don’t even have fishermen going out?” Bauer asked. “How can we afford to pay workers to pick crab if we don’t have any crab to pick?”

Should those changes become law, Bauer said processors will pass the cost along to consumers, and that such an increase would become so prohibitively high, no one will buy his crab.

“The present administration believes that if the jobs paid more money, American workers would line up to do them, but I doubt it,” Bauer said. “Even if they did, the overall logic is still flawed … because the American consumer cannot afford to buy what ... American workers pick.”

ASMI’s Fick agreed, saying times have changed since the days when he and other college students spent their summer breaks in Alaska as “cutters and gutters.”

“It’s hard to find Americans who will come from far-flung places to cut fish for 18 hours and see that as an adventure,” Fick said. Consequently, Alaskan processors have relied for years on temporary help from Russia and Eastern Europe to do the work. Should visa restrictions make it too expensive for processors to hire workers, Fick forecasts significant supply problems ahead.

“I heard one processor say he may have to cut production by 50 percent, which means there’s real potential trouble,” Fick said. “If others like him can’t handle the volume coming in, then that means fishermen are put on catch limits, which results in supply shortages.”

The trickle-down effect, said Vie Restaurant’s Sears, is forced creativity for chefs and smaller fish portions for patrons. Simply raising prices to offset raw product costs won’t make the problem go away.

“Maybe we’d have to drop some fish from the menu or come up with some new combinations like salt cod and regular cod, or combine a smaller portion of cod with a stew of chickpeas and clams,” Sears said. “There are ways around it. Sometimes that means if the protein cost is high, you’ve got to use others that are low. But I can’t say I hope that happens.”