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Developing An Economic Profile Of Texas Shrimp Fishing Operations In The Gulf Of Mexico

By Michael G. Haby, Lawrence L. Falconer, Russell J. Miget, and Gary L. Graham

ABSTRACT

The annual assessment of shrimp fishing performance is important to three interrelated audiences: the regulatory community which defines the policy arena in which fishermen operate, financial institutions which extend credit, and producers. Understanding historic, economic performance enables policy makers to estimate the ability of producers to absorb production losses or increased expenses that resource management measures may mandate. Likewise, commercial lenders are accustomed to using industry benchmarks to compare the performance of a loan applicant against his peers. If key measures of competitiveness like production costs, profitability, and return on assets are to be managed, producers must know how their performance compares against the larger industry.

This paper describes a project to develop an information base that meets the needs of these three audiences. Annual economic, financial, and physical data are provided by cooperating vessel owners. Accrual-adjusted financial statements are the primary source of financial and economic information while settlement sheets highlight physical measures like days fished, gallons of fuel used, pounds harvested, etc. Settlement sheet data are essential in developing various efficiency ratios that relate an economic measure to a physical parameter.

To identify trends in production costs, revenues, and equity changes, the authors have developed a standardized set of ratios that measure the financial position and performance of trawlers over eleven years. With this information, the economic impacts of proposed regulations can be economically and financially assessed, and communicated to policy makers. Similarly, such ratios allow cooperators and commercial lenders to compare individual performance against the entire database.

KEYWORDS: financial performance analysis, costs and returns, economic analysis, shrimp fishing


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