Oil and Water

Oil and Water

Fisheries in the Gulf of Mexico are still feeling the repercussions from the April explosion of BP's Deepwater Horizon oil rig. For now, it appears that the oil well has been capped, but only after causing the largest oil spill in U.S. history. During the past three months, many fishing areas have been restricted and then reopened, prices for Gulf seafood have spiked and then stabilized, and retailers,

Fisheries in the Gulf of Mexico are still feeling the repercussions from the April explosion of BP's Deepwater Horizon oil rig. For now, it appears that the oil well has been capped, but only after causing the largest oil spill in U.S. history. During the past three months, many fishing areas have been restricted and then reopened, prices for Gulf seafood have spiked and then stabilized, and retailers, fishermen and marketing boards have worked hard to shore up confidence in an industry that has long been a source of pride for the region. It's still difficult to predict what lies ahead.

Currently, the Gulf oyster industry has suffered the biggest blow from the spill. Production is down to about 20% of the industry's normal capacity, according to Ewell Smith, executive director of the Louisiana Seafood Promotion and Marketing Board.

Rouses Supermarkets [3] has seen a shortage in oyster supply as well.

“The hardest hit area of the Louisiana seafood industry as of now would be the oyster community,” said Allison Rouse, financial administrator at the Thibodaux, La.-based retailer. “Unable to secure much product at all, many local restaurants and Rouses have had to substitute with a different type of oyster.”

As of now, the retailer has been able to secure enough supply of pasteurized crab meat and frozen shrimp, which are popular items with its customers, Rouse said.

By contrast, most retailers have ample supplies of frozen Gulf shrimp. In fact, shrimp prices have begun to decline somewhat, after a run on local seafood sent them soaring this spring.

“Prices of oysters definitely went up. [But] the market's starting to stabilize for shrimp right now and for crabs as well,” Smith said, explaining that the wholesale price of shrimp has actually dropped recently, because processors stocked up so much when the spill first occurred.

“They started buying everything they could, thinking that the shrimp would stop coming in, but guess what, it kept coming in.”

At United Supermarkets [4], the supply of Gulf shrimp has remained steady, but costs have moved up about 15% to 20%, according to Scott Nettles, business director of meat and seafood for the Lubbock, Texas-based retailer.

“I believe we will continue to see higher prices, but we should still be able to get shrimp from the Gulf,” Nettles said.

“We are just now beginning to see an impact from the oil spill. Most of the shrimp we sell is from the Texas Gulf Coast, and until now, we have been able to maintain supply from last year's harvest. But that supply is beginning to run out, and the further we get into the year, and hence, into this year's harvest season, the greater the impact we and our guests will feel.”

Publix Super Markets [5], Lakeland, Fla., also experienced some issues obtaining fresh Gulf shrimp for a short period of time about a month ago as vessels were cleaning up the oil, but had plenty of frozen shrimp on hand, according to spokeswoman Maria Brous.

“Over the last several weeks, this has eased up and we have been in great shape as far as supply,” she said.

“Other than that, we have had no other impact throughout the spill. Even the fresh shrimp issue was a minor inconvenience as it is a small volume, regional business.”

However, prices for Gulf shrimp have increased by about 20% at Publix, and oyster costs are also up about 18%, Brous said.

But, prices could begin to climb higher once these frozen supplies begin to run out, Smith warned.

“I know that retailers are doing everything they can to source as much as they can right now,” Smith said.

“They're filling their coolers up, but if this continues, if the FDA doesn't get moving soon, [retailers] are going to start feeling the shortages as well. The retailers are able to store stuff up, especially for shrimp, frozen product, but fresh product is another story. Frozen shrimp will tighten up as well, because if we can't get access to our fisheries, we feel that.”

Rouses has been aggressive in its efforts to secure product on a weekly basis, but Allison Rouse noted that no one knows how long the spill will continue to impact the region's fisheries.

“We have already seen the effects of supply not being where it was in the past due to the lack of fisherman fishing and also primarily to the zones being closed due to the oil spill,” she said.

CLEAN REPUTATION

The region's retailers and fishermen are also concerned about the long-term effect that the spill could have on consumer perception of Gulf seafood.

In an effort inform the media and the public about what is actually going on in the Gulf, the LSPMB has launched louisianaseafoodnews.com [6], a special site dedicated to regional seafood news and oil spill coverage. It outlines Smith's three-part strategy to rebuilding the Louisiana brand and helping its members.

First, the industry must ensure that all state and federal agencies communicate in plain language regarding when and where seafood is safe for consumers to eat. “The agencies need to come together in one unified voice. We need to be able to bore the living tears out of consumers with good news on safety,” a recent article on the site reads.

Second, encourage celebrity chefs throughout the nation use Louisiana seafood, and spread the word about its safety and appeal through their cooking and appearances. “That's how we dug out of the hole following Katrina,” Smith explains in the report.

And third, develop a “certification program” for the region's seafood that's similar to the one now used to regulate the U.S. beef industry — something the LSPMB had been working on prior to the spill.

Both Nettles at United and Rouse at Rouses are hopeful that conditions in the Gulf will improve soon.

“The hope in the local seafood industry is that the damage we have sustained over the past few months will soon improve now that the cap is in place,” Rouse said, adding that the company has been involved with the local fisherman and the seafood industry for many years and is the largest retail buyer of local Louisiana seafood.

“Unfortunately, we have no way of knowing the long-term effects of this disaster. This disaster is very unfortunate and has had an incredible impact on many of our local fisherman and processors. We feel that now more than ever, we must support Louisiana products and continue to educate our consumers that our product quality is still at an all-time high.”

Rouse said that customers have had a lot of questions about local seafood products, but most are still buying local seafood to support the local fishermen. And, in conjunction with LSPMB, Rouses has been aggressive in its efforts to assure shoppers that all the local seafood sold in its stores has been rigorously inspected and is safe to eat.

“We have hopefully reassured our seafood consumers that our seafood products are safe — now more than ever due to the products being reviewed, inspected and under much more scrutiny than they have been in the past,” Rouse said.

United is experiencing the same trend.

“[Customers] are asking, and we let them know that … our product has been unaffected and they are fine with that,” Nettles said, adding that United has built confidence and trust in its customers that it will not sell questionable seafood.

Sales of Gulf seafood have slowed somewhat, Nettles added, noting that this is probably due to higher prices, rather than concerns about contamination.

“We do have signs and information that let the guest know that the product is from safe waters. We handle most of the concerns in a face-to-face manner, just explaining the product and the guest is fine with the product in almost all cases.”

Rouses has been emphasizing the safety message since the spill began in April.

“We have worked diligently with local media, commercial radio and our own signage in-store to reassure our customers that we're doing everything possible to ensure that the seafood they consume is safe,” Rouse said.

“We reinforce this message through our advertisements, our website and on our social media sites. We are also starting a fisherman fund in the upcoming weeks in our stores to raise money for local fisherman who are struggling through this rough time.”

While the LSPMB is still in crisis communications mode, Smith said, it will begin its efforts to build the Louisiana seafood brand once the well is capped permanently.

“It took them five years to turn around the perception in Alaska [following the 1989 Exxon Valdez spill] and it only hit 3% or 4% of their coast,” Smith said.

“So our challenge is much greater than that, and what's different now [compared with] 21 years ago is that we've had 24-hour real-time video of this well spewing oil. That imagery has been burned into consumers' minds across the United States, and I can understand where the consumer comes from seeing that. But, what people don't also realize is that it's an enormous body of water. Even now, with the 43% open, that's still a lot open.”

OPEN WATER

Meanwhile, Smith said LSPMB was waiting on the FDA to open up several areas that were closed to commercial fishing for precautionary reasons, since many of these areas have been cleared by inspection agencies.

“We could be back up to 86% of our shoreline open if they would get moving,” Smith said.

“They are creating some serious challenges right now because supply is really tightening up — and I wouldn't be saying that if we hadn't gotten a clean bill of health. If we hadn't gotten a clean bill of health, of course that's fine, keep it closed, but that's not the case at all.”

The state of Louisiana has opened up about 86% of its waters to recreational fishing, but does not have the authority to apply that to commercial fishing, which is up to the FDA and the National Oceanic and Atmospheric Administration.

But, while the government may be moving slowly, it has been addressing the matter. Federal officials announced on July 23 that fish caught in a wide area of the Gulf of Mexico near Florida are safe to eat and allowed commercial and recreational fishing boats back into part of the Gulf that had been off-limits due to the spill.

Jane Lubchenco, administrator of the NOAA, announced the reopening of a third of the overall closed area after consultation with the U.S. Food and Drug Administration and under a reopening protocol agreed by NOAA, the FDA and the Gulf states.

“We know it is important to get people back to fishing quickly — this industry is the backbone of the Gulf region economy,” said FDA Commissioner Margaret Hamburg in a published report.

“At the same time, we need the American public to be confident in the seafood coming from the Gulf, and the testing that has been done as part of the agreed-upon protocols has not indicated any level of concern.”

With that as the state's biggest immediate challenge, the long-term challenge is to rebuild confidence in seafood from the region, Smith said.

“The perception hasn't been as challenging [to address locally], because people understand and are tuned in to the messaging, and they understand the culture and how much testing is being done,” Smith said, adding that Gulf seafood is probably the most closely inspected food source in the country right now.

“Our job is going to be very challenging over the next few years trying to change that perception [nationally] and, you know, perception is reality.”

Smith said that opening up the waters is key, but that it's all relative.

“The question is, what does next week hold? The weather could change everything,” he said.

“We literally have to take every success we have one at a time and day by day. That's how we're going to get through this, until we get past this hurricane season and they get this oil cleaned up.”