Impacts of disease in shrimp aquaculture on U.S. capture fishery prices

Abstract

Shrimp is one of the most traded seafood commodities in the world, and aquaculture now contributes more to global shrimp production than capture fishing. Since the 1970s, the shrimp culture industry has been simultaneously characterized by rapid growth due to falling production costs as well as severe losses from disease outbreaks. Previous research confirms that farmed and wild shrimp are substitutes and shrimp markets around the world are well integrated. We seek to determine if prices of wild shrimp in the U.S. Gulf of Mexico fishery reflect supply shocks in aquaculture attributed to acute disease epidemics. Analysis relies on U.S. farmed shrimp import data between 1990 and 2016 from three major producers: Ecuador, Thailand, and Indonesia. After testing country-level price indices for cointegration, we use structural break tests to determine if significant price changes coincide with anecdotal disease crises. We attempt to further characterize the shrimp market by testing if disease outbreaks correspond with changes in relative prices of larger, more valuable shrimp compared to smaller shrimp.