Meanwhile domestic fillet prices fell 20%, but nugget prices held up. The reason seems to be that nuggets are only produced domestically.
So, continued demand for nuggets, both fresh and frozen, has been one of the few bright spots for the industry.
Total US round weight of catfish processed fell 10% from 334 million pounds in 2011 to 300 million pounds in 2012.
The decline in processed weight is a result of falling domestic demand for US catfish, industry sources said.
Many US farmed catfish producers have attributed widespread availability of cheaper foreign imports of Chinese catfish and Vietnamese pangasius for the decline in demand for US catfish.
For example, according to the US Dept. of Commerce, YTD imports of frozen Vietnamese pangasius fillets through November hit a record high 202.2 million lbs, an increase of 16%; and record import levels have been accompanied with near three-year lows in average fillet prices.
According to Urner Barry quotations, the average price of 3-5 oz pangasius fillets in January was $1.70 per lb, down 16% from January 2012’s $2.03 per lb average— the lowest recorded average price since May 2010 when prices were reported at $1.67 per lb.
Meanwhile, total domestic catfish fillet production decreased 5% in 2012 from 65.42 million lbs to 62.07 million lbs while prices have plummeted.
However, this decline in fillet demand, and subsequent production, has had an interesting impact on the catfish nugget market.
Catfish nuggets are produced during the filleting process; so as fillet production falls, nugget production follows suit. Moreover, it should be noted that catfish nuggets are not produced overseas.
According to industry sources, US demand for domestic catfish nuggets in 2012 has remained relatively strong when compared to other catfish items.
For example, year-to-date production of domestic catfish nuggets fell 10% in 2012 from 21.30 million lbs in 2011 to 19.20 million lbs, with end-of-month inventories in December plummeting 47% from 1.76 million lbs in 2011 to 930,000 lbs in 2012. As a result, nugget prices rose in 2012 as supplies dwindled.
According to Urner Barry quotations of Frozen Domestic Catfish Nuggets, the average price of nuggets was up 26% in December 2012 compared to the same month in 2011, from $1.15 per lb to $1.45 per lb; assuming everything else equal, this indicates a rise in demand.
By comparison, US domestic fillet prices plummeted 20% in 2012 from $4.12 per lb. in December 2011 to $3.28 per lb. the same time a year later. Meanwhile as fillet production fell in 2012, inventories also dropped-- 34% year-over-year in December 2012. Assuming all things equal, declines in prices, inventories and production it is safe to assume a fall in demand.
Since catfish nuggets are not produced overseas it will be interesting to observe how the industry and market react should catfish fillet production continue to decline amid consistent demand for nuggets.