Supply Lines: Shrimp scramble

Supply Lines
Bloomberg

The U.S. seafood industry has seen some serious suffering this year as restaurant shutdowns shattered demand and Covid-19 threatened fisherman working in close quarters. Now add natural disasters to the list of hardships.

Hurricane Laura raked Louisiana early Thursday, becoming one of the most powerful storms ever to hit the state. Shrimp and fishing boats in the U.S. had to be docked from the tumultuous waters, grinding the industry to a halt and hitting revenue at a time that's usually peak season.

Andrea Hance, executive director of the Texas Shrimp Association, estimates that shrimpers can lose as much as $5,000 for every night they can't fish. Boats have already been tied up for about three days because of the storm. About 70% of the industry's revenue in the state comes in from July 15 to Oct. 1.

In a rare bit of luck, the storm passed through Texas with little damage reported to the boats themselves.

That "would've been the nail in our coffin," Hance said.

The seafood industry accounts for about $145 billion in sales and 1.7 million jobs in the U.S., according to trade group National Fisheries Institute. Restaurant demand far and away dominates the industry at 70% of sales. When dining rooms had to close, it dealt a serious blow to the shrimp industry.

Hurricane Laura came just after U.S. Tropical Storm Marco came ashore in Louisiana late Monday.

While Marco didn't significantly damage property, it did cause lost fishing days. Fish in freezers along the coast also had to be moved, said David Veal, executive director of the American Shrimp Processors Association, which represents about 75% of fresh shrimp packers in the Gulf.

"Given our economic problems the last two decades, it's tough to recover from these kinds of things," Veal said.

Elizabeth Elkin in New York and Millie Munshi in Denver

Charted Territory

Russia's attractive wheat supplies make up 80% of Egypt's purchases so far this season, compared with about half at a similar time last year. Russia is nearing the end of its harvest, which is expected to approach 2017's record haul and help the nation reclaim its ranking as the world's top exporter. In contrast, Ukraine's crop has fallen slightly from a year earlier, and production plummeted in France and Romania.

Today's Must Reads

  • Chilling out | When it comes to measuring China's compliance with promises to buy more American farm goods as part of a landmark trade pact between the world's two biggest nations, the U.S. top agriculture negotiator seems to have mellowed.
  • Bovine blues | The California heat wave that strained the state's power grid is also serving a blow to its dairy farmers, the nation's biggest milk producers.
  • Flipping burgers | Not even the greatest surge in joblessness in 80 years is easing the fast-food industry's years-old labor shortage.
  • Import rebound | China boosted imports of farm goods ranging from corn to pork to sorghum last month, signaling a demand recovery for protein in the world's most-populous nation.
  • Easing the pain | Although a poor harvest has worsened the outlook for French wheat exports, demand from China is proving to be a bright spot.
  • Walmart sidelined | Grocery stores are booming as the coronavirus pandemic drives Americans to stock up their pantries. But the nation's biggest grocer is largely missing out.

On the Bloomberg Terminal

  • Soup momentum | Elevated food consumption due to people staying home amid the pandemic may allow Campbell to finish the year with strong sales and margin gains, according to Bloomberg Intelligence.
  • Green shoots | Improving demand vs. supply indicators portend bottoming agriculture prices, but history suggests a greenback peak is needed for a sustained recovery, Bloomberg Intelligence writes.
  • Use the AHOY function to track global commodities trade flows.
  • Click HERE for automated stories about supply chains.
  • See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.
  • Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.

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