The Annual Economic Survey of Federal Gulf Shrimp Permit Holders: Report on the Design, Implementation, and Descriptive Results for 2006

This technical memorandum documents the design, implementation, data preparation, and descriptive results for the 2006 Annual Economic Survey of Federal Gulf Shrimp Permit Holders. The data collection was designed by the NOAA Fisheries Southeast Fisheries Science Center Social Science Research Group to track the financial and economic status and performance by vessels holding a federal moratorium permit for harvesting shrimp in the Gulf of Mexico. A two page, self-administered mail survey collected total annual costs broken out into seven categories and auxiliary economic data. In May 2007, 580 vessels were randomly selected, stratified by state, from a preliminary population of 1,709 vessels with federal permits to shrimp in offshore waters of the Gulf of Mexico. The survey was implemented during the rest of 2007. After many reminder and verification phone calls, 509 surveys were deemed complete, for an ineligibility-adjusted response rate of 90.7%. The linking of each individual vessel’s cost data to its revenue data from a different data collection was imperfect, and hence the final number of observations used in the analyses is 484. Based on various measures and tests of validity throughout the technical memorandum, the quality of the data is high. The results are presented in a standardized table format, linking vessel characteristics and operations to simple balance sheet, cash flow, and income statements. In the text, results are discussed for the total fleet, the Gulf shrimp fleet, the active Gulf shrimp fleet, and the inactive Gulf shrimp fleet. Additional results for shrimp vessels grouped by state, by vessel characteristics, by landings volume, and by ownership structure are available in the appendices. The general conclusion of this report is that the financial and economic situation is bleak for the average vessels in most of the categories that were evaluated. With few exceptions, cash flow for the average vessel is positive while the net revenue from operations and the “profit” are negative. With negative net revenue from operations, the economic return for average shrimp vessels is less than zero. Only with the help of government payments does the average owner just about break even. In the short-term, this will discourage any new investments in the industry. The financial situation in 2006, especially if it endures over multiple years, also is economically unsustainable for the average established business. Vessels in the active and inactive Gulf shrimp fleet are, on average, 69 feet long, weigh 105 gross tons, are powered by 505 hp motor(s), and are 23 years old. Three-quarters of the vessels have steel hulls and 59% use a freezer for refrigeration. The average market value of these vessels was $175,149 in 2006, about a hundred-thousand dollars less than the average original purchase price. The outstanding loans averaged $91,955, leading to an average owner equity of $83,194. Based on the sample, 85% of the federally permitted Gulf shrimp fleet was actively shrimping in 2006. Of these 386 active Gulf shrimp vessels, just under half (46%) were owner-operated. On average, these vessels burned 52,931 gallons of fuel, landed 101,268 pounds of shrimp, and received $2.47 per pound of shrimp. Non-shrimp landings added less than 1% to cash flow, indicating that the federal Gulf shrimp fishery is very specialized. The average total cash outflow was $243,415 of which $108,775 was due to fuel expenses alone. The expenses for hired crew and captains were on average $54,866 which indicates the importance of the industry as a source of wage income. The resulting average net cash flow is $16,225 but has a large standard deviation. For the population of active Gulf shrimp vessels we can state with 95% certainty that the average net cash flow was between $9,500 and $23,000 in 2006. The median net cash flow was $11,843. Based on the income statement for active Gulf shrimp vessels, the average fixed costs accounted for just under a quarter of operating expenses (23.1%), labor costs for just over a quarter (25.3%), and the non-labor variable costs for just over half (51.6%). The fuel costs alone accounted for 42.9% of total operating expenses in 2006. It should be noted that the labor cost category in the income statement includes both the actual cash payments to hired labor and an estimate of the opportunity cost of owner-operators’ time spent as captain. The average labor contribution (as captain) of an owner-operator is estimated at about $19,800. The average net revenue from operations is negative $7,429, and is statistically different and less than zero in spite of a large standard deviation. The economic return to Gulf shrimping is negative 4%. Including non-operating activities, foremost an average government payment of $13,662, leads to an average loss before taxes of $907 for the vessel owners. The confidence interval of this value straddles zero, so we cannot reject, with 95% certainty, that the population average is zero. The average inactive Gulf shrimp vessel is generally of a smaller scale than the average active vessel. Inactive vessels are physically smaller, are valued much lower, and are less dependent on loans. Fixed costs account for nearly three quarters of the total operating expenses of $11,926, and only 6% of these vessels have hull insurance. With an average net cash flow of negative $7,537, the inactive Gulf shrimp fleet has a major liquidity problem. On average, net revenue from operations is negative $11,396, which amounts to a negative 15% economic return, and owners lose $9,381 on their vessels before taxes. To sustain such losses and especially to survive the negative cash flow, many of the owners must be subsidizing their shrimp vessels with the help of other income or wealth sources or are drawing down their equity. Active Gulf shrimp vessels in all states but Texas exhibited negative returns. The Alabama and Mississippi fleets have the highest assets (vessel values), on average, yet they generate zero cash flow and negative $32,224 net revenue from operations. Due to their high (loan) leverage ratio the negative 11% economic return is amplified into a negative 21% return on equity. In contrast, for Texas vessels, which actually have the highest leverage ratio among the states, a 1% economic return is amplified into a 13% return on equity. From a financial perspective, the average Florida and Louisiana vessels conform roughly to the overall average of the active Gulf shrimp fleet. It should be noted that these results are averages and hence hide the variation that clearly exists within all fleets and all categories. Although the financial situation for the average vessel is bleak, some vessels are profitable. (PDF contains 101 pages)

Infiltration of fine and coarse sand into an open-work gravel bed

The siltation of an experimental gravel bed, with three grades of sand moving in suspension and as bedload, was examined. The rate of infiltration of sand into the void space of the gravel was determined under differing conditions of discharge, water depth, and velocity (jointly expressed as variation in the Froude Number) and suspended sediment concentration. The downstream reduction in siltation from the point source was also examined.

Down to earth thoughts on conserving aquatic genetic diversity

A discussion is presented on the topic of maintaining genetic diversity in aquatic ecosystems, considering the various threats caused by irreversible damage or loss to the environment. The current situation in aquaculture and future prospects regarding the conservation and protection of endangered species are outlined, describing the case of tilapias in Africa as one particular example of fish conservation.

Soviet Illegal Whaling: The Devil and the Details

In 1948, the U.S.S.R. began a global campaign of illegal whaling that lasted for three decades and, together with the poorly managed “legal” whaling of other nations, seriously depleted whale populations. Although the general story of this whaling has been told and the catch record largely corrected for the Southern Hemisphere, major gaps remain in the North Pacific. Furthermore, little attention has been paid to the details of this system or its economic context. Using interviews with former Soviet whalers and biologists as well as previously unavailable reports and other material in Russian, our objective is to describe how the Soviet whaling industry was structured and how it worked, from the largest scale of state industrial planning down to the daily details of the ways in which whales were caught and processed, and how data sent to the Bureau of International Whaling Statistics were falsified. Soviet whaling began with the factory ship Aleut in 1933, but by 1963 the industry had a truly global reach, with seven factory fleets (some very large). Catches were driven by a state planning system that set annual production targets. The system gave bonuses and honors only when these were met or exceeded, and it frequently increased the following year’s targets to match the previous year’s production; scientific estimates of the sustainability of the resource were largely ignored. Inevitably, this system led to whale populations being rapidly reduced. Furthermore, productivity was measured in gross output (weights of whales caught), regardless of whether carcasses were sound or rotten, or whether much of the animal was unutilized. Whaling fleets employed numerous people, including women (in one case as the captain of a catcher boat). Because of relatively high salaries and the potential for bonuses, positions in the whaling industry were much sought-after. Catching and processing of whales was highly mechanized and became increasingly efficient as the industry gained more experience. In a single day, the largest factory ships could process up to 200 small sperm whales, Physeter macrocephalus; 100 humpback whales, Megaptera novaeangliae; or 30–35 pygmy blue whales, Balaenoptera musculus brevicauda. However, processing of many animals involved nothing more than stripping the carcass of blubber and then discarding the rest. Until 1952, the main product was whale oil; only later was baleen whale meat regularly utilized. Falsified data on catches were routinely submitted to the Bureau of International Whaling Statistics, but the true catch and biological data were preserved for research and administrative purposes. National inspectors were present at most times, but, with occasional exceptions, they worked primarily to assist fulfillment of plan targets and routinely ignored the illegal nature of many catches. In all, during 40 years of whaling in the Antarctic, the U.S.S.R. reported 185,778 whales taken but at least 338,336 were actually killed. Data for the North Pacific are currently incomplete, but from provisional data we estimate that at least 30,000 whales were killed illegally in this ocean. Overall, we judge that, worldwide, the U.S.S.R. killed approximately 180,000 whales illegally and caused a number of population crashes. Finally, we note that Soviet illegal catches continued after 1972 despite the presence of international observers on factory fleets.

Precious Corals in Hawaii: Discovery of a New Bed and Revised Management Measures for Existing Beds

The fishery for deepwater precious corals in the Hawaiian Islands has experienced an on-and-off history for almost 40 years. In spite of this, research, driven primarily by the precious coral jewelry industry, remains active. In this paper, the results of deepwater surveys in 2000 and 2001 are reported. In summary, a new bed on the summit of Cross Seamount is described and revised estimates of MSY’s for pink coral, Corallium secundum; red coral, Corallium regale; and gold coral, Ger ardia sp., in the two known beds off Makapuu, Oahu, and Keahole Point, Hawaii, in the main Hawaiian Islands, are presented. The population dynamics of each species is described, as well as their ecological limits on Hawaii’s deep reefs, island shelves, and seamounts. The local supply of precious coral in the main Hawaiian Islands is sufficient to support the local industry, but cost/ benefits of selective harvest requirements and weather constraints limit profitability of the fish

The food habits of four kelp-bed rockfishes (Scorpaenidae, Sebastes) off Santa Barbara, California

The diets of four common rockfishes from the kelp beds near Santa Barbara, California, were determined by gut contents analysis, and related to feeding strategies. The guts of one hundred specimens of each species were examined, and the importance of prey evaluated by their frequency of occurrence, numbers, and volumes. The volumes of stomach contents were standardized for the size of specimen. Estimates of overlap in diet between the species were made. Sebastes atrovirens fed primarily on small animals from the kelp canopy, and may have employed a browsing rather than pursuing strategy of feeding. It showed low overlap in diet with the three bottom-dwelling species, S. carnatus, S. chrysomelas, and S. vexillaris, all of which preferred larger types of prey and seemed more like pursuers. The closely related S. carnatus and S. chrysomelas were quite similar in diet, eating primarily medium sized demersal invertebrates, especially crabs and shrimp. S. vexillaris ate fewer crabs and shrimp but more large-sized fish and octopus than the latter two species. Its more active life style indicates that it may react to prey at greater distances and have a larger home range than these species, as has been predicted for pursuers feeding on larger (and rarer) prey.

Prioritizing seagrass restoration sites: study examines predictors of seagrass bed recovery

Ecologic researchers are modeling the impact of vessel grounding to seagrass beds using GIS in the Florida Keys National Marine Sanctuary. The surface creation tools in the ArcGIS 3D Analyst extension help assess both the damage and recovery of these seagrass beds.

Semiempirical down-scaling of GCM output to the local scale for temperature, precipitation, and runoff

EXTRACT (SEE PDF FOR FULL ABSTRACT): An empirically derived multiple linear regression model is used to relate a local-scale dependent variable (either temperature, precipitation, or surface runoff) measured at individual gauging stations to six large-scale independent variables (temperature, precipitation, surface runoff, height to the 500-mbar pressure surface, and the zonal and meridional gradient across this surface). ...The area investigated is the western United States. ... The calibration data set is from 1948 through 1988 and includes data from 268 joint temperature and precipitation stations, 152 streamflow stations (which are converted to runoff data), and 24 gridded 500-mbar pressure height nodes.

Tracing sediment transport and bed regime in Nha Trang Bay

Three spatial structure groups of radionuclides in U and Th series, 210Pb-excess and 137Cs, and 40K were found based on analyzing temporal and spatial datum of their content by factor analysis with oblique rotation in Nhatrang bay. U and Th spatial structure with their contours decreased toward the offshore, ran longshore and divided seawater of bay into two parts with strong gradient on both sides. Inside part located from center of Nhatrang bay toward the seashore with three main deposit centers of their contents higher than 23 Bq/kg.dry for 238U and 40 Bq/kg.dry for 232Th, indicated unstability of shoreline. Almost sediments coming from river extended toward the offshore, were stopped and transported toward southeastern. The outside part was less than above mentioned content. The boundary line between two parts superposed with the constantly limit line of turbid plume in the rainy season. Direct influence of the continental runoff was limited by the 9 Bq/kg.dry contour of 238U, 19 Bq/kg.dry contour of 232Th. Longshore current was a predominant process whereas lateral transport as sifting and winnowing process of finer grains in sediments of Nhatrang bay. Areas that had very low content of 137Cs and 210 Pb-excess adjoining shoreline showed areas being eroded. Accumulation of 137Cs and 210 Pbexcess nearby river mouth characterized for fine compositions of sediments controlled by seasonal plumes and sites further toward the south indicated finer materials transported from river and accumulated in lack of hydrodynamic process. Near shore accumulation of 40K revealed the sediments there originated from bed erosion.