took a downward plunge from which they had not recovered by December 1949. The 1949 landings were the largest in history by weight, but they represented the poorest showing of New Bedford in value of food-fish production since 1943. More than 42 million pounds were "trash fish," sold for byproduct purposes at an average price of 1 cent a pound. Other segments of the industry have also felt the postwar pinch. One freezer has gone through bankruptcy and operates only occasionally. The other may have its mortgage foreclosed by the Reconstruction Finance Corporation. The dealers have fared only a little better. At least five small companies went out of business in 1949 alone. Portland The marketing of redfish rejuvenated the fishing industry of Portland, just as it had saved Gloucester from possible extinction as a major fishing port. Landings of redfish expanded from 70 thousand pounds in 1935 to over 20 million pounds in 1946 and carried Portland's total landings to their highest point in history. In 1946 redfish made up 59 percent of the weight and 51 percent of the value of Portland's total landings. The Boston Lay The owner agrees that the lay shall be the 60-40 lay as follows: (a) There shall first be deducted from the gross stock the following items: Ice for 3 months actual fishing starting June 1. Wharfage.. Scales Exchange fee. Chief engineer. Actual cost. Actual cost. Actual cost. Actual cost. $25 per trip. $15 per trip. $20 per trip. $1.50 per day. Actual cost. (b) The balance of the remaining stock shall then be divided as follows: 60 percent thereof for the crew and 40 percent thereof for the owner. (c) From the crew's said 60 percent of the remaining stock there shall be deducted the following items: 5 lumpers and a checker if used on a 17 man crew, or 7 lumpers if Actual cost. a 15 man crew is used. Source: 1946 uniform trawler agreement between the Atlantic Fishermen's Union and Boston trawler owners and the Federated Fishing Boats of New England and New York, Inc. NOTE. In case of a "broker" or unsatisfactory trip due to breakdown, the owners agreed under this contract to pay all expenses and to pay the fishermen a per diem up to 10 days as follows: Fishermen, $5; mate, $6; chief engineer, $6; 2d engineer, $6; cook, $6. The facilities of the fishing industry in Portland have not improved to reflect the expansion of production, as they have in Gloucester and New Bedford. With few exceptions, the docks and buildings used by the industry are in poor repair. Fishing vessels operating out of the port are small in size and number. The primary market in Portland is not organized as it is in the other main ports. Fish are sold to the dealers by fishing captains on an individual basis. Although the Atlantic Fishermen's Union has had an agent in the city since 1946, a substantial number of the fishermen are unorganized and few contracts exist between the union and vessel owners. In 1949 there were 11 firms in Portland cutting fillets for the wholesale trade. Although most firms were small, two of them represented substantial recent investment by Boston companies. A third, which processes most of the redfish landed in the port, is connected with a large Midwestern fish wholesaler which handles its products. Few figures are available to indicate the profitability of the Portland fishing industry, but there is some evidence that Maine's future redfish operations will be concentrated in Rockland rather than in Portland. In 1949, one of the larger Portland companies opened a modern icing plant in Rockland. A Boston concern which has had a redfish plant in Rockland since 1946 is said to be planning to expand its facilities there. THE PROBLEMS OF THE NEW ENGLAND FISHING INDUSTRY Decline in fish population Three of the most important food fish in the New England catch have become increasingly difficult to secure in recent years. They are haddock, the area's most valuable groundfish; redfish, the mainstay of the fresh- and frozen-fish industry at Gloucester and Portland; and yellowtail flounder, a highly valuable specialty of New Bedford. While the fishery biologists of the United States Fish and Wildlife Service have not yet determined definitely the reasons for the scarcity of these species, much of the evidence uncovered to date indicates that overfishing is an important factor in their declining numbers. From the industry's standpoint, the problem is most serious. Scarcity of these fish on New England banks means higher unit costs of production, because supplies can be obtained only by fishing more intensively in New England waters or by making much longer trips to more distant banks. Haddock. The haddock fishery of New England has been a source of grave concern to federal fishery biologists since about 1931, when landings at the principal ports dropped to 118 million pounds from an all-time high of 180 million pounds in 1930. As early as 1936, United States Fish and Wildlife Service biologists suggested that overfishing was largely responsible for the decline in haddock abundance on Georges Bank, the nearest and most prolific New England fishing ground. As haddock became scarcer on Georges Bank, the industry stepped up landings from Canadian waters and concentrated on scrod (baby haddock) from the New England banks. Unfortunately, both policies worsened the industry's predicament. Haddock have become scarce on the nearer Canadian banks. The destruction of baby haddock on Georges Bank through heavy scrod fishing has reduced the haddock population on that fishing ground by 62 percent since World War I, according to the United States Fisheries Laboratory at Woods Hole. Boston, New England's haddock center, suffered most severly because of the scarcity. A Fish and Wildlife Service official estimated in 1934 that during that year alone the longer trips to the Nova Scotian banks added more than 2600 days to the running time of Boston trawlers, at $250 a day. Since present costs are two or three times greater than those in 1934 and Nova Scotian trips are even more common, Boston owners and crews today face a substantially greater disadvantage. Fish and Wildlife scientists have advocated several specific moves since 1936 to alleviate the acute haddock shortage. They have recommended that larger mesh nets be adopted by the industry to allow baby haddock to escape capture until they mature. Haddock grow most rapidly during their first 3 years of life, and extensive tests indicate that about half the baby fish now destroyed might be spared if the larger mesh were used. The Service has suggested that a minimum legal length and weight be set for haddock landings to discourage the catching, of immature fish. The Service has also advocated the negotiation and adoption of an international treaty by the several countries, including the United States, which are engaged in exploiting North Atlantic fishery resources. The treaty would provide for further study of the problem and the adoption of practicable conservation regulations. Although the industry has so far spurned the first two recommendations, implementation of the third began in 1949. The countries primarily concerned negotiated a conservation treaty, though up to January 1, 1950, only the United States had ratified it. Since it cannot become operative until ratified by at least four of the signatory nations, it appears that effective action under the treaty is still a distant prospect. Redfish.-Scarcity of redfish in New England and adjacent Canadian waters is a comparatively recent phenomenon. Intensive exploitation of the resource has existed for only about 10 years. Nevertheless, the situation is potentially more threatening than that in the haddock fishery. The tremendous expansion in catch of the last few years could not have occurred without the help of longer trips to northerly Canadian banks. The redfish caught in New England waters seem to have become smaller and smaller in size. 1935 36 37 38 39 40 41 42 43 44 45 46 47 1948 The critical factor in the dismal outlook for redfish supplies is their slow rate of growth. Biologists estimate that these fish take at least 9 years to reach maturity. The indications are that redfish are being captured on the New England banks at a faster rate than they can reproduce and grow to salable size. There has been an absolute decline in supplies from this source since 1941 despite increased fishing effort. When the more distant grounds have been exploited to the fullest and total production begins to decline, it will take considerable time for the redfish fishery to recover. Redfish vessels encounter cost difficulties similar to those cited for Boston haddock vessels as they push farther afield in search for new stocks. Unfortunately, research on the redfish scarcity has not proceeded as far as the study of the haddock shortage. There are no official recommendations for alleviating the potential decline of redfish. Thorough investigation of the problem will probably have to await adoption of the international conservation treaty. Yellowtail flounder.-Fishermen have sought yellowtail flounder intensively only since the opening of the New Bedford market and the discovery that yellowtail makes an excellent filleted product. Landings reached a peak of 36.7 million pounds in 1942 and then dropped to lower levels from which they have never fully recovered. Only more intensive fishing on southern New England banks and the discovery of additional stocks on Georges Bank kept production from further decline after 1944. The average daily catch of yellowtail flounders by small trawlers on the southern New England banks declined from 9,600 pounds in 1942 to 4,800 pounds in 1948. Landings from Georges Bank increased from 10 percent of New Bedford's yellowtail catch in 1946 to 62 percent during the first 8 months of last year. Fish and Wildlife Service biologists began a study of yellowtail flounder early in World War II. By the middle of 1951 initial findings on all phases of the fishery may be completed. Marketing Difficulties New England fishing interests must surmount formidable barriers to maximize the sales value of their fresh and frozen fish in American markets. The competition of other protein foods, principally meat, and the competition of imported fish limit the sales and prices of New England fish. The overwhelming preference of consumers for meat severely restricts the total demand for fish. Moreover, recent increases in fish imports threaten to absorb a substantial por tion of the total American market. In addition, the distribution system for fish absorbs a very high percentage of the retail price. This allocation has held the industry's share of the retail sales dollar for fish to a minimum. Fish have been called "the bottom rung of the economic ladder of meat." In June 1947, average weekly family expenditures in the United States for meat and poultry were $2.36; for fish they were only 20 cents. Annual per capita consumption of meat products in 1947 was 155 pounds in contrast to 6.2 pounds per person for fresh and frozen fish. American fish consumption has been confined largely to Fridays and to the Lenten season. The seasonality in cold stor age holdings of fish, shown in an accompanying chart, tends to indicate that the industry has been dependent on the Lenten season to move stocks of frozen fish. The principal marketing problem of the fish industry is to increase and stabilize the demand for fresh and frozen fish by smoothing out its weekly and annual sales curve. It must make fresh and frozen fish a matter of everyday consumption in every month. To increase per capita consumption, the industry must encourge the sale of fish at prices low in relation to those for meat. Per capita fish consumption declined from 1930 to 1933, for example, despite lower fish prices. A study of available data for the period 1930 to 1937 indicates that per capita consumption of fresh and frozen fish was highest when fish was cheapest in relation to meat prices. The fishing industry must also convince the public of the desirability of eating fish and publicize the varied ways in which it may be served. Tests have shown that fish is equal to meat in nutrition, although housewives have traditionally classified fish as an inferior food to be served only when they could not purchase meat. Many homemakers have never become acquainted with most of the interesting and palatable methods of preparing fish. A study made in 1946 revealed that more than 70 percent of the women interviewed served only fried fish; 85 percent asked for instructions on how to thaw frozen fish. The industry might obtain large returns if it could meet the challenge to educate the housewife. Fishery products move through a variety of market channels from the New England fishing centers to the final consumer. Dealers and chain stores are the principal purchasers of fish at the ports. They may process the fish into fillets or sell them whole. The larger dealers distribute fish through their own brokers in key cities to jobbers who supply the retail trade. Others sell through independent brokers to wholesalers and retailers. Some dealers ship directly to institutional buyers and retail stores, occasionally on a cash and carry basis. They also supply secondary wholesalers and processors who move the fish to the retail dealer. Some chain stores handle the fish from the pier to their own retail outlets. The available evidence indicates that "charge what the traffic will bear" is the only price policy adopted by the fish dealers. Companies in the major ports typically aim at a gross profit of 1 to 2 cents a pound on whole fish and a 10 to 20 percent markup on fillets. These margins are only "rules of thumb" and are frequently not realized. In actual practice, dealers sell at the highest markup obtainable under existing market conditions in the hope that the average margin over time will approximate the "ideal" level. Much larger markups have occurred later in the distribution process. Traditionally, the large wholesalers have received markups of 30 to 40 percent, and retail stores have operated on margins of 50 to 100 percent. A price of fish to the consumer double that received by the major-port dealer has not been unusual. Wholesalers have defended their markups by citing the cost of handling and financing the product: retailers have blamed the danger of loss due to perishability and one-day-a-week markets. Nevertheless, trade markup practices have held down the flow of income to the New England fishing centers. Although wholesale and retail markups seem to have shrunk in some areas during the last year, there is little evidence of uniform reductions. Only a few of the chain stores, which have fully integrated facilities from the nort to the retail level, can maintain control over wholesale and retail markups. Independent wholesalers and retailers have the greatest bargaining power in the chain of markets from the ports to the consumer. Wholesalers, who receive detailed information daily on prices paid for fish by the dealers, can take advantage of the high degree of price competition among dealers. Retailers have enstomarily received substantial margins as an inducement to handle fresh and frozen fish. Many are still unaccustomed to handling it. Fresh and Frozen Fish Questionnaire, Parents' magazine, March and April 1946. The power of the New England fishing industry to eflect reductions in distributive margins is severely restricted by the lack of effective controls over the latter stages of the marketing process. Nevertheless, steps taken to encourage greater competition among wholesalers and retailers who handle fishery products might pay substantial dividends to the industry. Foreign competition Foreign competition is not a new problem for the New England fisheries. New England lost its salt-fish trade to Canada and other northern countries before the first World War. New England interests have continuously had a tariffconscious attitude. Wartime and postwar developments, however, have made the challenge from foreign fisheries more acute. Tariff regulations have protected fillets ever since they became a major fishing product. Under the Tariff Act of 1922 the import duty on all fillets was 2.5 cents a pound. The Tariff Act of 1930 continued that rate until the second trade agreement with Canada, effective January 1939, reduced the duty on groundfish fillets to 1.875 cents a pound. The reduced rates applied to annual imports of 15 million pounds or 15 percent of the average annual United States consumption of fillets in the 3 preceding years, whichever was the greater. Imports of groundfish fillets in excess of the quota and imports of all other fillets remained subject to duty at 2.5 cents a pound. An indication of the potential threat to New England interests from foreign fillet producers came in 1939. Imports rose 64 percent above the 1938 level. The largest New England filleting concern made an unsuccessful attempt to establish a new plant in Newfoundland and ship fillets into the United States duty free. It failed only because Congress redefined "American Fishery" to make the products of such a venture subject to the American tariff. These events not only emphasized the importance of the tariff for the maintenance of New England's position under existing cost and market conditions, they also made clear the potentialities in the development of fresh- and frozen-fish facilities in the countries to the north. |