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)

Cymo andreossyi (Audouin, 1826)

Cymo andreossyi is found both in the live and dead branching corals of coral Pacillopora, Acropora and Montipora. Compared to the occurrence its compatriot C. melanodactylus, this species found in large numbers. The relationship is mutualistic, with the species occupying a niche similar to that occupied by the more colorful Trapezia species.

Labroidaes dimidiatus (Valenciennes, 1839)

Labroides dimidiatus, is one of several species of cleaner wrasses found on coral reefs from Eastern Africa and the Red Sea to French Polynesia, for the first time from Iran (Persian Gulf, Kish Island). Like other cleaner wrasses, it eats parasites and dead tissue off larger fishes’ skin in a mutualistic relationship that provides food and protection for the wrasse, and considerable health benefits for the other fishes. Some fish mimic cleaner wrasses. For example, a species of blenny called Aspidontus taeniatus has evolved the same behavior to tear small pieces of flesh from bigger fish. Cleaner wrasses are usually found at cleaning stations. Cleaning stations are occupied by different units of cleaner wrasses, such as a group of youths, a pair of adults, or a group of females accompanied by a dominant male. When visitors come near the cleaning stations, the cleaner wrasses greet the visitors by performing a dance-like motion in which they move their rear up and down. The visitors are referred to as "clients". Blue streak cleaner wrasses clean to consume ectoparasites on client fish for food. The bigger fish recognise them as cleaner fish because they have a lateral stripe along the length of their bodies and by their movement patterns.

Plotosus lineatus (Thunberg, 1787)

The Striped Catfish can be recognized by its striped coloration, barbels around the mouth, and its body shape which tapers to a point posteriorly. Small juveniles are black and large adults may be less distinctly striped. Plotosus lineatus can reach a maximum length of 32 cm (13 in) and about 40cm in Persian Gulf. The body is brown with cream-colored or white longitudinal bands. The most striking feature of this species is in the fins; in fact the second dorsal, caudal and anal are fused together as in eels. In the rest of the body is quite similar to a freshwater catfish: the mouth is surrounded by four pairs of barbells, four on the upper jaw and four on the lower jaw. The first dorsal and each of the pectoral fins have a highly venomous spine. They may even be fatal. Juveniles of P. lineatus form dense ball-shaped schools of about 100 fish, while adults are solitary or occur in smaller groups of around 20 and are known to hide under ledges during the day. Adult P. lineatus search and stir the sand incessantly for crustaceans, mollusks, worms, and sometimes fish. Striped eel catfish is an oviparous fish; this species has demersal eggs and planktonic larvae. This species has evolved long ampullary canals in its electrosensory organs.

Torpedo sinuspersici Olfers, 1831

Electric rays, thought to be the most primitive of the skates and rays, have stout tails but have rather expansive disc. This group is distinguished by the presence of powerful electric organs, derived from branchial muscles in head region. Torpedo sinuspersici found inshore in sandy bottoms, and well offshore from the surf zone down to 200 m. Also on or near coral reefs (like Kish Island in Persian Gulf). Common in shallow sandy areas. Occasionally hooked by anglers, more often seen by divers; can deliver a strong shock. Flesh is edible. T. sinuspersici can survive for hours after being stranded on the beach. Little is known of the life history of the Gulf torpedo. It is a sluggish predator of bony fishes. At night it actively hunts for food, sculling slowly through the water about a meter above the bottom; during the day it usually rests on the bottom and opportunistically ambushes unwary prey. It uses its broad pectoral fins to envelop the target fish before delivering an electric shock to stun it. Usually solitary, they may form groups during the mating season. Reproduction is a placental viviparous, with the developing embryos initially surviving on their yolk sacs, and then on enriched uterine fluid produced by the mother. Litters of 9-22 young are birthed in the summer. Newborns measure about 10 cm wide; males mature at a disc width of 39 cm and females at 45 cm.

Chrysiptera unimaculata Cuvier, 1830

Chrysiptera unimaculata, an algivorous species also living on the coral reef flat and being territorial but not considered as a strict farmer in this location. Maximum length is 8 cm in Persian Gulf. It is living in close association with macrophytes. Adults are found solitarily or in small groups among coastal algal reefs, rubble or over open beach-rock of reef flats exposed to moderate surge and feeds mainly on benthic algae. C. unimaculata is oviparous, distinct pairing during breeding. Eggs are demersal and adhere to the substrate. Males guard and aerate the eggs.

Koumansetta hectori Smith, 1957

Many aquarists know this fish as Ambylgobius hectori but accepted name is actually Koumansetta hectori. K. hectori, Hector's goby, is a species of goby native to the Indian Ocean (including the Red Sea), first record from Persian Gulf (Kish Island, Iran) to the islands of Micronesia in the western Pacific Ocean. It can be found on sheltered coral reefs at depths of from 3 to 30 meters (though usually between 5 to 20 meters). This species reaches a length of 8.5 centimeters (3.3 in) SL. This attractive little fish measures only 2” at maturity and spends its time hovering over rocks and substrates out in the open water column. Known for their bold yellow stripes, peaceful disposition, the diminutive Hector’s Goby is a nano reef favorite. It can also be found in the aquarium trade.

Boloceroides spp.

Boloceroides spp. are looking like an untidy mop, this anemone is sometimes seen in sea grass areas on many of our shores. It is possibly seasonal. Sometimes, large numbers are seen (up to 10-20 animals in a trip) and then none at all.  Tiny swimming anemones may sometimes be confused with Sea grass anemones which have translucent tentacles with tiny spots. The swimming anemone harbors symbiotic single-celled algae (zooxanthellae). The algae undergo photosynthesis to produce food from sunlight. The food produced is shared with the sea anemone, which in return provides the algae with shelter and minerals. The oral disk and tentacle muscles are used to obtain, retain, and ingest prey; in Boloceroides spp. tentacles can autotomize if it is needed to evade a predator. Tentacles can control body form by use of their endodermal muscles. Retractors are longitudinal muscles that will aid in withdrawing tentacles and the oral disk if they are exposed to the open air.  This hypothesis is furthered because in comparison to other sea anemones, Boloceroides is loosely attached to its respective substrate, thus allowing the pedal disk to detach quickly resulting in a rapid swimming response. Boloceroides can reproduce both sexually and asexually. As Anthozoans, Boloceroides produce sexually by bypassing the medusa life cycle stage; this allows Boloceroides (and all Anthozoans) to release their egg and sperm creating planula a bilaterally symmetrical, flattened, ciliated, motile larva.

Pempheris vanicolensis (Cuvier, 1831)

Pempheris vanicolensis has reported for the first time from Persian Gulf (Kish Island). Various aspects of the biology of P. vanicolensis Cuvier & Valenciennes, a recent Lessepsian (Suez Canal) immigrant into the Mediterranean, are given. Red Sea and Mediterranean populations were compared, and the results indicate that the spawning season is shortened in the Mediterranean, continuing from April to September, as opposed to year-round in the Red Sea. Descriptions of a ripe ovary and post-larva from the Mediterranean are given. Individuals reach a mean size of 10.8 cm in their first year, and 14.4 cm in the second year. Little change has occurred in the diet of the immigrant population, and both populations feed nocturnally, chiefly on larval and adult stages of planktonic crustaceans. Direct underwater observations on the diurnal behavior of the species show that the fish leave their daytime cave shelter at sunset, congregate at a nearby site and then migrate inshore and disperse into small groups to feed. Before dawn, they reassemble at the cave's entrance, and finally enter it at sunrise, after the school has built up. Observations on Persian Gulf sweepers show that the fish are segregated into size groups, ranging 15–18 cm adults at depths of 3 m.