32 • URNER BARRY'S REPORTER / VOL. 18, NO. 4 / FALL 2023
U.S. shrimp imports have declined for 11 straight months through
the latest release in May 2023. For the first five months this year,
total imports are down 17.6% from 2022. In the trailing 12-months,
shrimp imports were nearly 17%, or 343 million pounds less than
the previous 12.
Despite the continued decline in supply, in the same 11 month
decline in imports, the white shrimp index fell 8%, and the valueadded index
12%. Along with lessened consumer demand, higher
freezer charges, increased cost of capital, and escalating wages
and energy costs, all add to the cost basis, and dissuade importers
from holding excess inventory.
Even with declining
supplies, incountry inventory
outweighed
demand and
many areas were
oversupplied by the
end of July. This led
many shrimp items
to continually hit
record, or nearrecord lows on a
weekly basis.
Price doesn't exist
in a vacuum, so
one can look at
volatility as well. Volatility is a measure of price uncertainty in
commodity markets and measures the degree of variation of
price levels. Since price reflects supply and demand, high levels
of volatility usually mean different supply and/or demand factors
are influencing movements. These sharp fluctuations can create
challenges to run any business.
While traders may welcome this, typical retail and foodservice
buyers usually like a more stable pricing environment-mainly
because it mitigates swings in consumer inflation and costs less for
risk management.
Looking at some common items over the past five years, shrimp
prices have been one of the least volatile of all. Shell eggs have
been extremely volatile, with wild swings in both the beef and pork
cutouts as well. While there are several reasons for the former,
supply-side issues
caused by avian
influenza led
to the shock in
available product
and was the
largest the driving
factor.
It seems
counterintuitive
that protracted
declines in
imports, market
softness, and low
volatility coexist for
such a prolonged
period of time.
However, looking over a longer horizon, it's easy to assert that
the market has simply been oversupplied. While the 658 million
pounds imported through May is 17.6% below last year, the total is
still 16% above the last two non-pandemic years which averaged
568 million pounds.
Market fundamentals turned on head…
Despite lower imports and
minimal volatility, shrimp prices
continue to go down
$3.50
$3.75
$4.00
$4.25
$4.50
$4.75 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$/lb
2020 2021 2022 2023
Urner Barry White Shrimp Index
Source: Urner Barry
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