North Carolina Waterman

CURRENT SURVEY QUESTION:
Should gamefish status be given to striped bass & red drum?
...PLACE YOUR VOTE NOW

More Feature Article links at the bottom of this page...

TUESDAY, APRIL 19, 2011

Economic Value of Spotted Seatrout, Red Drum, and Striped Bass to NC

By Gentner
CCANC

This is the species specific socio-economic data you may have been waiting for.

ARTICLE -
Comparison of the Economic Impact of the Striped Bass, Red Drum and Spotted Seatrout Fisheries by Sector in North Carolina
Prepared by Gentner Consulting Group, Incorporated

April 8th, 2011

The fisheries for striped bass, spotted seatrout and red drum are very economically important to the state of North Carolina (NC). Collectively, these three species account for a large proportion of all recreational fishing trips taken in NC. Currently House Bill 353, Designation of Coastal Gamefish, seeks to reallocate 100% of the allowed harvest of these three stocks to the recreational sector. This short analysis examines the current economic impacts of each sector.

In 2009 anglers in the NC took 154,730 striped bass fishing trips, 476,866 spotted seatrout fishing trips and 414,950 red drum fishing trips for a total of 1.1 million trips across all three species (Table 1).[1] This total effort includes trips where anglers caught and/or targeted these three species. Expenditure estimates, taken from NMFS estimates from 2006, were inflated to 2009 dollars using the consumer price index and applied to the effort estimates.[2] Spending across all three species totals $81.0 million in the state of NC. This level of expenditures supports $120.8 million in total sales, $38.5 million in income and 1,536 jobs. Clearly, recreational fishing for these species is very important economically to the state of NC. While not counted here, recreational striped bass fishing on the east coast for the same striped bass caught in the NC fishery is an even larger economic engine. NC has a strong tackle manufacturing and boat building industry that benefits from a strong and healthy striped bass stock, east coast wide.

Table 1. Recreational Effort, Expenditures and Economic Impacts, in Thousands of 2009 Dollars.

Species
Fishing Mode
Directed Effort
Expenditures
Impact

Non-Resident
Resident
Total
Output
Income
Jobs

Striped Bass
Charter Boat
2,600
1,221
$978.5
$1,458.4
$464.4
19

Private Boat
20,489
82,553
$5,198.8
$7,748.1
$2,467.3
99

Shore
24,735
23,132
$5,987.9
$8,924.1
$2,841.8
114

Spotted Seatrout
Charter Boat
4,296
2,017
$1,616.7
$2,409.5
$767.3
31

Private Boat
70,066
282,298
$17,777.9
$26,495.4
$8,437.1
337

Shore
61,072
57,117
$14,784.8
$22,034.6
$7,016.6
280

Red Drum
Charter Boat
10,235
4,804
$3,851.4
$5,739.9
$1,827.8
73

Private Boat
51,154
206,101
$12,979.3
$19,343.9
$6,159.8
246

Shore
73,715
68,941
$17,845.4
$26,596.1
$8,469.2
338

Total
318,362
728,184
$81,020.8
$120,750.0
$38,451.2
1,536

In comparison to commercial fisheries for these species, recreational fishing for striped bass alone generates more economic activity ($12.1 million in expenditures) than commercial fishing for all three species combined ($1.6 million in landings) (Table 2). The commercial fishery lands 194,348 pounds of red drum, 320,336 pounds of spotted seatrout and 310,613 pounds of striped bass. The $1.6 million in landings across these species generates $1.5 million in sales, $722,700 in income and 29 jobs across the harvesting sector. This represents only 1.2% of the activity generated by recreational fishing for these same species.[3] Additionally, income impacts have been used as a proxy for economic value, although a proxy that typically overestimates true economic value.[4] Using income as a proxy for economic value, the recreational fishery supports over 51 times more value that the commercial harvesting sector.

Table 2. Commercial Landings and Harvester Economic Impacts, 2009 (thousands of dollars).[5]

Species
Landings
Harvesting Impacts

Pounds
Value
Sales
Income
Jobs

Red Drum
194,348
$316.1
$289.6
$143.4
6

Spotted Seatrout
320,336
$529.0
$484.8
$240.1
10

Striped Bass
310,613
$747.3
$684.8
$339.2
13

Total
825,297
$1,592.4
$1,459
$723
29

From a commercial fisheries standpoint, these species do not appear to be very important to the viability of commercial fishing communities. There is no directed fishery for red drum and red drum constitutes a small portion of overall commercial landings.[6] Currently landings are bycatch in the southern flounder estuarine gill net fishery. In 2005, only 691 commercial fishermen landed a red drum and only 216 of those make more than $200 from red drum harvest. For striped bass, the highest value commercial fishery of the three, only 614 fishermen landed striped bass in the estuary fishery and only 201 fishermen landed fish in the ocean fishery. Across both fisheries, only 68 fishermen earned more than $2,000 a year selling striped bass in 2004.[7] Finally for spotted seatrout, only 921 fishermen landed spotted seatrout and only 105 landed more than $1,000 worth of spotted seatrout in 2008. This suggests that very few, if any, commercial fishermen are dependent on harvests of these three species. Because data on landings by an individual fisherman are not available, it is impossible to tell if the passage of this bill will cause any one fisherman to go out of business.

Table 3 includes business downstream from the harvester in the calculation of commercial economic impacts. NMFS’s commercial economic impact model used here is currently being updated.[8] Since that model was first developed, the country’s reliance on imports has increased and the processing and wholesaling sectors have shrunk. As a result the multipliers used to generate Table 3 are likely too optimistic. Additionally, some of the impacts from seafood sales occur in other states as some of this seafood is sold out of state. As a result, the impacts overstate the total activity generated in NC from the commercial harvest of these three species. Regardless, even including the processing, wholesaling and retail sectors, recreational fishing generates 6.5 times more jobs and 12.5 times more sales than the entire commercial industry from the harvester to the plate.

Table 3. Commercial Economic Impact from Harvesting, Processing, Wholesaling and Retail, 2009.

(thousands of dollars)

Species
Industry Impact

Sales
Income
Jobs

Red Drum
$1,864.1
$1,003.4
46

Spotted Trout
$3,120.0
$1,679.4
76

Striped Bass
$4,407.6
$2,372.4
108

Total
$9,392
$5,055
229

The estimates of recreational economic impact present in Table 1 are conservative. The NC DMF has estimated higher effort and expenditures for each of these species in fishery management plans produced in previous years. Recreational effort in NC fell dramatically from 2008 to 2009 with 1.5 million less trips in 2009 than 2008 (20.7% drop). Additionally, the per trip expenditure estimate presented in the NC DMF fishery management plans are higher than the expenditure means produced by NMFS as NMFS tends to be very conservative when estimating recreational expenditures (footnote 2 and 6). It is a common analytical procedure to conduct a least-most conservative analysis (footnote 4). Here the most conservative recreational estimates are presented alongside the least conservative commercial estimates. Even still, the results of this comparison are compelling; recreational economic activity dwarfs commercial economic activity in these three fisheries.

Just comparing recreational trip expenditures to commercial landings shows that recreational fishing produces far more economic activity in the state of NC that commercial fishing by a wide margin. While not directly tied to these three species, durable goods expenditures in NC totaled $1.14 billion in 2009 supporting $1.7 billion in total sales and 13,214 jobs. In addition, 72 boatbuilding businesses in NC generated $556.8 million in sales supporting 2,903 employees in 2008.[9] Clearly, recreational fishing and the businesses that support recreational fishing are very important to the NC economy. Additionally, NC has the real potential to become an economic powerhouse for inshore fishing, like Florida (FL). By creating gamefish status for some of the same inshore species with their net ban, FL has created a state where fishing generates $16.6 billion in recreational expenditures annually, supporting 130,900 jobs. NC already has a strong tourism industry and giving these three species gamefish status has the potential to increase recreational fishing effort. Increasing recreational fishing effort will create more jobs at no expense to the state of NC.

--------------------------------------------------------------------------------

[1] Directed effort estimates were calculated using raw MRFSS data and effort estimates with code developed by GCG.

[2] Gentner, B. and S. Steinback. 2008. The Economic Contribution of Marine Angler Expenditures in the United States, 2006. US DOC. NOAA Technical Memorandum NMFS/-F/SPO-94 http://www.st.nmfs.noaa.gov/st5/publication/marine_angler.html

[3] It is important to point out that economic impacts are not the appropriate metric for establishing allocations, but can be an important tool to examine the potential distributional impacts of potential shifts in allocation. Economic impacts are a good indicator of potential value in each fishery and can indicate which direction allocations should move.

[4] Edwards, S.F. 1990. An Economics Guide to Allocation of Fish Stocks between Commercial and Recreational Fisheries. NOAA Technical Report NMFS 94. November; and Kirkley, J.E., K.E. McConnell, and W. Ryan. 2000. Economic Aspects of Allocating Striped Bass among Competing User Groups in Virginia. Virginia Sea Grant Technical Report VSG-00-08

[5] NMFS online landings queries - http://www.st.nmfs.noaa.gov/st1/commercial/index.html

[6] NC Red Drum Fishery Management Plan http://www.ncdmf.net/download/RDFMP-FINAL11-24-08.pdf

[7]NC Fishery Management Plan: Estuarine Striped Bass. http://www.ncdmf.net/download/StrBassFMP2004.pdf

[8] Fisheries Economics and Sociocultural Status & Trends Series. http://www.st.nmfs.noaa.gov/st5/publication/index.html

[9] National Marine Manufacturer’s Association. 2008. Recreational Boating Statistical Abstract. http://www.nmma.org/statistics/publications/statisticalabstract.aspx