The US seafood market has fundamentally changed during the last three decades. Stable landings and increasing demand have led to a rapid increase in imports—79% of domestic seafood consumption is estimated to come from imports. Despite several policies supporting vulnerable coastal communities, little attention has been given to the impact of imports on prices obtained by domestic producers. Here we investigate the impact of imports on domestic prices for shrimp, a fishery that in the 1980s was the most valuable in the US, but that has seen real landed values decline by one-half since then. Using cointegration analysis, we show that domestic prices closely track those of “shell-on frozen” imports, indicating that import competition largely drives this trend and that domestic US prices are now set in the global market. A similar market structure is likely to be present for other species facing strong import competition.
Asche et al. (Thu,) studied this question.