SIC 0912
FINFISH



This industry classification includes establishments primarily engaged in the commercial catching or taking of finfish, including cod, menhaden, pollack, salmon, and tuna.

NAICS Code(s)

114111 (Finfish Fishing)

Industry Snapshot

The United States has three major shorelines, situated along the Atlantic Ocean, the Gulf of Mexico, and the Pacific Ocean. Together these shores, including those of Alaska and Hawaii, span more than 12,000 miles. As do many other nations, the United States holds economic jurisdiction over waters out to a distance of 200 nautical miles. This area is called the nation's exclusive economic zone (EEZ). The U.S. EEZ contains more than 2.2 million square miles. These waters are estimated to contain about 20 percent of the harvestable seafood in the world.

In 2001 the U.S. commercial fishing industry landed 8.2 billion pounds of finfish, up from 7.6 billion pounds in 2000. The finfish landed in 2001 represented 87 percent of all edible and industrial fish products landed and about 46 percent of the value. Finfish made up 84 percent (6.1 billion pounds) of all edible fishery products landed and more than 96 percent (2.1 billion pounds) of all industrial fishery products landed.

Annual per capita consumption of fishery products rose from 12.7 pounds in 1981 to a high of 16.2 pounds in 1987. From 1987 to 2001, consumption fell and stabilized at approximately 15.0 pounds per person per year. Although the National Fisheries Institute set a goal of increasing annual per capita consumption to 20.0 pounds by the year 2000, the actual per capita consumption that year stood at 15.2 pounds. In 2001 per capita consumption of fish and seafood dropped to 14.8 pounds, down slightly from the previous year. Per capita consumption of fresh and frozen products, however, was 10.3 pounds, up .1 pound over 2000. Finfish, fresh and frozen, made up 5.7 of the 14.9 total pounds, with tuna leading the group at 2.9 pounds per capita consumption. The fresh and frozen finfish category includes approximately 1.1 pounds of farm-raised catfish.

Total export value of edible and nonedible fishery products was $11.8 billion in 2001, up $1.1 billion from the previous year, whereas import values, at $18.5 billion in 2001, decreased $466.3 million over the same period.

Organization and Structure

Historically, independent fishermen caught fish and sold them to local packers or processors who resold them to retail markets. Although the U.S. fishing fleet still contains independent fishermen, large corporations are becoming increasingly involved in all aspects of seafood distribution.

The U.S. fisheries industry is managed by the National Marine Fisheries Service (NMFS), which is responsible for regulating commercial fishing, finding ways to control overfishing of exploited species, collecting data, and publishing reports about commercial landings. The fishing industry, however, remains a lightly regulated one. Critics of the NMFS have at times accused the agency of concentrating efforts on helping fishermen maximize profits at the expense of protecting fish populations.

The NMFS, however, has instituted a number of measures designed to protect fish population. One way in which the NMFS has regulated fishing is through the use of limited seasons for selected species. Because of intense pressure on selected populations, some seasons are short. Pacific halibut, for example, was once fished during a six-month season. By 1991 the season was limited to two 24-hour periods. In September 1991 approximately 6,000 boats landed 23.7 million pounds of halibut in one day.

The NMFS has also tested the use of quotas and limited entry into established fisheries as a means of regulating stressed fish populations. Such programs have included a moratorium on new entrants into the fishery, quotas based on catch histories of the vessel or fisherman, quotas based on a percentage of the total allowable catch, quotas on specific poundage, quotas based on vessel size or gear, and quotas that can be purchased or traded.

Background and Development

Commercial fishing is one of America's oldest industries. The bountiful waters off the continent's East Coast attracted fishermen from Scandinavian countries possibly as early as 1,000 years ago. The ocean also provided employment for many European settlers during the seventeenth and eighteenth centuries. Technological innovations and the institution of regulatory agencies during the 1800s prepared the industry for the modern era.

The techniques of netting, harpooning, and pole-and-line fishing used by early fishermen were eventually replaced by more efficient methods of catching fish. Trawling—pulling a funnel-shaped bag to scoop fish from the ocean floor—was introduced in the middle of the nineteenth century. Purse seines, nets that trap fish by closing in a manner similar to a drawstring purse, were introduced early in the twentieth century. Together, purse seines and trawlers catch more fish worldwide than all other types of fishing gear.

Legislation. In addition to technological innovations, the middle of the nineteenth century also saw some fishery resources dwindle. To protect the resources, the government assumed responsibility for fisheries management. In 1871 Congress created the U.S. Commission on Fish and Fisheries and charged it with the responsibility of investigating food-fish populations and making recommendations. In 1956 Congress passed the Fish and Wildlife Act, which established the Bureau of Commercial Fisheries under the auspices of the Fish and Wildlife Service. The National Environmental Policy Act of 1969 included the requirement that an environmental impact statement be prepared for fishery regulations. Both the Endangered Species Act of 1969 and the Marine Mammal Protection Act of 1972 placed restrictions on allowable catches of threatened species and species that interact with threatened species.

One significant piece of legislation to affect U.S. commercial fishing was the Magnuson Fishery Conservation and Management Act of 1976 (Magnuson Act). The Magnuson Act extended the U.S. coastal jurisdiction from 12 miles to 200 miles from shore and gave the federal government exclusive authority over domestic and foreign fishing operations within the exclusive economic zone.

Depletion of Fish Populations. The U.S. commercial fisheries industry entered the 1990s with promise and problems. Consumer demand was expected to remain stable, total catches were on an upward trend, and increases in sales were expected to be limited only by the availability of preferred species. The problems centered on charges that fish populations were being seriously depleted because of the combined impacts of over harvesting and environmental degradation. According to some experts, marine fisheries are a very highly threatened resource.

At the beginning of the 1990s, catches of many important species were significantly down from their 1980s levels across the lower 48 states. In addition to habitat impairment, conservationists and environmentalists blamed the drops on overfishing. Critics of the fishing industry claimed that nearly half of the U.S. coastal finfish populations was being depleted because the size of harvests outweighed the ability of the populations to reproduce themselves. Some scientists estimated that as many as 14 species faced commercial extinction, a state wherein too few fish of that species would remain to harvest them economically. The New England, Middle Atlantic, South Atlantic, and Gulf regions all saw total catches drop below their 1980 levels, although rising prices helped stabilize the value of the harvest.

One important species of fish cited as an example was menhaden, an oily, bony fish that is related to herring and harvested in the Atlantic and Gulf of Mexico. Large-scale harvesting of menhaden began in the nineteenth century following the discovery that its oil could be used as a substitute for whale oil. Twentieth-century uses for menhaden included the production of fish oil and fish meal and as a bait fish.

Although the Gulf population remained stable, the Atlantic menhaden population saw wide fluctuations. The largest Atlantic landings took place in the mid-1950s. During the middle of the following decade, the larger, older fish disappeared and the number of landings tumbled. During the 1970s the population appeared to make a tentative comeback, but in 1982 the Atlantic States Marine Fisheries Commission found it necessary to recommend protective regulations. In 1985 U.S. fishermen landed 2.7 billion pounds of menhaden, but Atlantic takings declined steadily. As a result, the last meal plant in Maine was shut down in September 1988. By 1995 total landings of menhaden had fallen to 2.0 billion pounds. In 1998 menhaden landings stood at 1.7 billion pounds, down from 2.0 billion in 1997. Atlantic takings stood at 608 million pounds.

Bycatch. "Bycatch" was another problem plaguing the fishing industry during the early 1990s. Bycatch refers to unintentionally caught fish, birds, marine mammals, and turtles that are seriously injured or killed. In 1990 Alaskan trawlers fishing primarily for pollack reported throwing away 550 million pounds of other edible ground fish such as cod and halibut. In the late 1990s, 3.5 million fishing boats around the world were catching about 84 million metric tons of fish, plus 27 million tons of bycatch that was discarded. The practice was condemned by critics as wasteful, and fishermen realized that public concern over real or even perceived threats to nontarget species could have negative consequences. Indeed, concern about the number of dolphins killed as a result of by catching prompted several well-publicized boycotts of leading tuna producers in the 1980s.

In an effort to avoid further legislative involvement, fishermen organized the National Industry Bycatch Coalition in 1992 to discuss possible solutions. The coalition's goals included the development of new technologies for cleaner fishing; promotion of education in how to use bycatch-reduction gear; support of management style changes to reduce throw-away rates; reduction of bycatch of threatened, endangered, and overfished species to the absolute minimum; reduction of the rate of bycatch mortality; and the development of valuable uses for dead bycatch. The coalition also expressed a determination to work with conservation groups rather than adopt an adversarial stance.

In 1996 Congress passed a bill aimed at fish conservation that required the NMFS, along with eight regional fishing councils from across the nation, to formulate plans to eradicate overfishing, minimize bycatch, and reduce the loss of marine habitats—especially on the sea bottom, which is damaged by trawling. But as the 1990s came to an end, many were questioning the outcome of the law and if steps being taken were enough. Fisheries biologist Joshua Sladek-Nowlis of the Center for Marine Conservation told Business Week the reductions were "too little too late." Fishermen called the tougher regulations on fishing overkill.

Fishermen are often in agreement with conservationists and environmentalists in discussing ominous environmental trends in the areas of breeding-ground pollution, shoreline development, and loss of wetlands. Approximately 75 percent of U.S.-produced seafood need bays and estuaries for breeding grounds; both types of marine environments have suffered from pollution. Several states have been particularly hard hit in this regard. For example, Louisiana loses about 50 square miles of breeding ground every year. California has lost more than 90 percent of its original coastal wetlands.

According to a 1998 report by the National Academy of Sciences, overexploitation was responsible for a 30 percent decline of fish stocks worldwide. Also, 44 percent were nearing exploitation, the report said. It was also noted that in U.S. waters, 80 percent of commercial fish stocks were disappearing.

Current Conditions

One of the most important issues facing the aquaculture industry in the early 2000s was law reform. In November of 2000, the National Marine Fisheries Service imposed restrictions on finfish and other fish for 20 miles around the shore off Alaska's western Aleutian Islands to protect endangered sea lion populations. Local government officials argued that their $1 billion annual business of harvesting fish was threatened by such rules. In response, an agreement was made with the federal government that any new fishing restrictions be executed in phases and that allowed some fishing around the sea lion habitat.

In Maine, the future of the fish-farming industry was being scrutinized during an early 2003 Board of Environmental Protection hearing to debate how the state's 27 existing fish farming operations could avoid polluting the Atlantic Ocean. The goal was to draft a permit to legalize all of Maine's commercial fish farming operations under the federal Clean Water Act. The resulting permit would set the precedent for environmental standards for any projected fish farming operations, including how much excess feed, feces, and antibiotics could be discharged into public waters.

Although the federal government continued to create tough new fishing laws that threatened thousands of jobs in the fishing industry, the debate over the science used in creating these laws was flamed by a federal report in December 2002 that reflected a dramatic increase in the fish count, especially cod, haddock, and pollock, off New England's coast. The report came from the National Marine Fisheries Service fall trawl, which also admitted to the fact that its gear was miscalibrated for the previous two years. With the science used to make such estimates about fish populations in question—dividing fisherman, regulators, and environmentalists—a federal judge ruled to postpone stringent new fishing restrictions from August 2003 until May 2004.

In 2000, Alaska led the nation with the most fishing vessels and boats, with 15,606. Louisiana was second with 13,864, and Florida a distant third with 7,816.

Industry Leaders

In the early 2000s, leading companies in the industry included Zapata Corporation, through its 60 percent ownership in Omega Protein Corporation. Zapata, of Houston, Texas, had 2001 sales of $98.8 million, an increase of 17.5 percent from 2000, and employed 992. Omega Protein, with four processing plants in the United States and a fleet of 40 fishing vessels, was the country's leading producer of fish meal and fish oil.

America and the World

Prior to World War II, Japan, which has a long history of relying on sea resources, had the largest fishing operations in the world. By the 1930s the Japanese fleet fished many areas of the Pacific, including Bristol Bay, Alaska. World War II interrupted commercial fishing, but the following years saw an explosion of fishing fleets. In 1948 Japan maintained its position as the world's leading fishing nation in terms of number of pounds caught. The U.S. fishing fleet landed the second largest catch, followed by Norway, the Soviet Union, the United Kingdom, and Canada. Competition increased during the late 1950s and early 1960s as Soviet factory vessels began operating off the eastern coast of the United States and in Alaskan waters. During 1966 the combined Soviet and Japanese fleets took approximately 3 billion pounds of fish from the Bering Sea and the Gulf of Alaska. U.S. harvests, however, entered a state of decline, and by the mid-1960s the United States ranked only sixth in the world. Japan had fallen to second, and Peru, with massive catches of Peruvian anchovies, had assumed the top position.

In 1974 a new international law of the sea was agreed upon, although it was not officially ratified until 1982. Under its terms, many countries declared exclusive economic zones (EEZs) that extended 200 miles from their shores. In a similar move, the United States adopted the Magnuson Act in 1976, legislation that created a 200-mile U.S. EEZ. Under the Magnuson Act the only foreign fishing allowable within the EEZ was that portion of the allowable catch not taken by U.S. vessels. The Magnuson Act, however, did permit joint ventures in which foreign vessels were permitted to receive fish from U.S. vessels. The fish were considered part of the U.S. harvest in such instances.

Overfishing remains a serious problem internationally, with stocks of food fish dropping severely in Southeastern Asian waters, the North Sea, and the Mediterranean Sea. The reduced fish stocks threaten U.S. and European industries and the economies of some developing countries. Part of the problem lies in the fact that western-style management techniques out-compete traditional Third World country industries. Between 1989 and the mid-1990s, fishing catches worldwide increased from approximately 100 million metric tons to 109 million metric tons. According to a report in International Agricultural Development, 7.5 million people in India relied directly on commercial or personal fishing for their livelihoods, whereas in the Philippines 38,000 fishermen were put out of work because of overfishing and competition each year. Exports of fish made up a significant proportion of the gross national product of Thailand. Western countries have taken some steps to address these concerns. The European Union, for example, adopted a strategy that called for a 20 percent cut in its fishing fleet between 1993 and 1996, but most fisheries management experts believed that this might not be enough.

The quality of fish taken by both western and other fleets also declined precipitously in the late twentieth century. Takes of many of the most profitable species—sea shrimp, Atlantic Ocean cod, herring and mackerel, Pacific Ocean perch, tuna, and halibut—were cut in half in the 20 years between 1970 and 1989. Most of the increase since 1989, according to International Agricultural Development, was in less lucrative species, especially Alaskan pollack, jack mackerel from Chile, Japanese and South American pilchards, anchoveta, and shark. These species were also considered less nutritious than the more profitable kinds.

Overall, the United States was successful in the finfish industry throughout the 1990s and into the 2000s. In 2001 U.S. imports totaled 5.8 billion pounds, whereas exports totaled 6.6 billion pounds. Imports in 2000 stood at 5.8 billion pounds and exports at 5.2 billion pounds.

Research and Technology

The two essential ingredients in the fishing industry are detecting fish (hunting) and catching fish (gathering). Until the modern era, fish detection was done primarily by the eye. The twentieth century introduced new methods of looking for fish. Aircraft scouting, satellite data, echo sounders, and other electronic equipment enabled fishermen to search more efficiently. Innovations were also made in catching fish. Nets made of new materials were rot resistant, less susceptible to abrasion, and more elastic. Larger purse seines became possible when better methods of hauling them were developed. Trawling became more efficient and diverse when faster and lighter trawls were made.

The Redmond, Washington, Marine Conservation Biology Institute estimated that in 1998, there were 89,000 trawling vessels in operation across the globe that fished an area larger than the lower 48 states. Many equate trawling with clearcutting forests. But industry spokesmen declared that the analogy was nothing more than a public relations spiel and said that they were striving to make changes to minimize impact on fish habitats in order to protect the resources that provided their livelihood.

Research continued during the 1990s on ways to improve on the various aspects of finfish harvesting. Areas under exploration included the introduction of electrical devices to herd fish into nets; the use of acoustical devices to hear noises characteristic of particular species; the development of more sophisticated methods of determining detailed water conditions; and determination of the applicability of luring fish with light, sound, chemicals, and electricity.

In addition to the technical aspects of finding and catching fish, researchers continued looking at ways to ameliorate the social, political, and economic problems of the industry. Promoters researched fish species not previously used commercially and worked on finding processing methods to make underexploited stocks more acceptable to American consumers. New versions of bycatch-reduction gear were developed and tested. Scientists continued their endeavors to understand interspecies relationships in an effort to make fisheries management more successful.

Also, the advent of global positioning systems and depth sounders made it easier for fishermen to find stocks. Likewise, the development of "rockhoppers," which rolled along the bottom, allowed sea bottoms, including coral reefs, to be fished. At one time this was impossible to do.

Despite modern innovations, commercial fishing at the dawn of the twenty-first century was still basically a hunting and gathering operation. As research efforts continued, modern technological advances aimed at improving the livelihood of fishermen often seemed to run at cross purposes with regulatory efforts to preserve fish stocks.

Further Reading

"Hearing Hammers Out Details of Draft for Fish-Farming Rules." Bangor Daily News, 12 February 2003.

"Hook, Line, and Extinction." Business Week, 14 December 1998.

Lazar, Kay. "New Fish Count Raises Flap; Results Fuel Debate Over New Restrictions." Boston Herald, 12 December 2002.

National Marine Fisheries Service. Fisheries of the United States 2001. Silver Springs, MD: September 2002. Available from http://www.st.nmfs.gov .

"Omega Protein Corporation." Hoover's Online, 7 March 2003. Available from http://www.hoovers.com .

Williams, Rochelle. "Trends in the Region: Putting a Human Face on the Alaskan Fishing Squabble." The Bond Buyer, 22 December 2000.

"Zapata Corporation." Hoover's Online, 7 March 2003. Available from http://www.hoovers.com .



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