Most types of seafood are still plentiful, but prices are likely to increase

Already, restaurants in Pennsylvania that sell fresh fish and shrimp from the Gulf are changing their menus to match the volatile pricing and shortages in shrimp, crab, and oysters.

Region — A diminished seafood supply caused by the BP oil spill in the Gulf of Mexico has led to a slight price increases in central Pennsylvania, and the toll will only worsen if the oil continues to flow and spread throughout and beyond the Gulf area.

Previous to the spill, about 40 percent of fish harvested in the lower 48 states originates from the Gulf of Mexico. But the future of the Gulf as a viable source of seafood is still very much in doubt as the ruptured BP well continues to spew oil.

Already, upscale restaurants in Pennsylvania that sell fresh fish and shrimp from the Gulf are changing their menus to match the volatile pricing and shortages in shrimp, crab, and oysters. Some menu items, such as Gulf oysters, could disappear entirely as oyster-shucking facilities in the Gulf Coast states cut back production or close altogether.

Hugh Buckley, an owner of Philadelphia-based seafood distributor E. Frank Hopkins Co., Inc., said shrimp and oyster prices have increased three to four percent so far. His company supplies frozen seafood to fast food and family restaurants and fresh seafood to upscale restaurants throughout the region.

“It’s not that there’s no product available; there are warehouses full of frozen seafood from all over the world, but we’ve seen the prices increase on our shrimp and oysters because other seafood producing areas are taking advantage of the situation in the Gulf,” Buckley said.

The oyster market has been affected the most by the spill, according to Buckley.

Hugh Buckley in front of an E. Frank Hopkins truck

“I know an acquaintance of the one of the owners of The Pearl Reef Oyster Company processing plant in Louisiana that closed last week,” said Buckley. “They had built the new plant three years ago and had $20 million invested in it, and now they can’t operate it since there’s no product, because their oyster beds were shut down as a precautionary measure by state health officials after the BP rig exploded.”

Volatility in the oyster market is not due solely to the Gulf spill, but is also the result of oyster shortages worldwide. The oyster industry has been in trouble for some time – a recent environmental study found 85 percent of oyster reefs worldwide had been destroyed by water pollution, unsustainable fishing practices, and ocean acidification caused by the uptake of “anthropogenic” (manmade) carbon dioxide from the atmosphere. The degradation of oyster habitat in the Gulf has had more of an impact on market prices as a result.

Andrew Ewing is the buyer for his parents’ seafood catering and restaurant business, Reedsville Seafood Company in Mifflin County. He said the price for shucked oysters, which are sourced from the Gulf, have risen 60 to 100 percent.

“They used to cost us around $40 to $50 per gallon, now they are almost $80 per gallon,” Ewing said.

Shrimp prices will see less short-term volatility, but may rise in the future if the spill is not controlled soon, Ewing said. His company’s supplier has 200,000 lbs. of frozen shrimp in its warehouse.

“That supply is going to last us for a while, but once that’s gone, we could run into trouble,” said Ewing. “Already we can’t get some kinds of peeled and pre-veined shrimp.”

Large amounts of stored, frozen seafood will keep restaurants stocked with product for a while, and other markets may be able to make up for what is no longer coming out of the Gulf. in Pennsylvania, nearly 80 percent of the seafood consumed comes from the East Coast or from other countries such as Canada, New Zealand, Vietnam, and Indonesia.

Mark Spinazzola, Vice President of Hoss’s Steak & Seafood House in Duncansville (Blair County), said so far Hoss’s seafood supplies have been sufficient to meet the needs of its 37 restaurants in Pennsylvania and two in West Virginia.

“We haven’t experienced price increases for our seafood yet, because we don’t source any products out of the Gulf, and we have contracts with our seafood suppliers to lock in prices,” said Spinazzola. “However, our costs could go up when we renegotiate our shrimp contract in September, depending on how long the oil spill lasts and how big a dent it makes in the overall seafood market.”

Most of the fish and seafood sold at fast food and family restaurants is farm-raised or imported, which makes lower-priced eateries less vulnerable to the impact of the Gulf oil spill.

“About 60 percent of the world’s shrimp is now farm-raised, and the bulk of that comes from Vietnam, Indonesia, and China,” said Spinazzola. “If there’s enough advance notice, the aquaculture farms can ramp up the production to offset the loss in the Gulf.”

Yet as Gulf seafood supplies dry up, lower-priced eateries could see price hikes, too. Buckley expects that unless BP stops the leak and gets the oil cleaned up quickly, prices will continue to climb.

“Experts have warned that if the oil slick lingers long enough in the Gulf, it could flow around the southern tip of Florida and get carried into the Gulf Stream, which would take it up the East Coast. If that happens, we’re going to see a ripple effect, what we call ‘boat to throat’ – from the fisherman in the Gulf to our local restaurants,” said Buckley. “That’s something we don’t want to see happen, particularly during a recession.”