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Global Shrimp Crisis Is Hitting Menus Everywhere


DEC. 27, 2013, 5:54 PM 

Paula Bronstein / Getty

In October, Jamie’s Italian, a British restaurant chain owned by celebrity chef Jamie Oliver, pulled shrimp linguine from its menu. 

In the U.S., Red Lobster scrimped too: Its all-you-can-eat "Endless Shrimp" special lasted just six weeks this year instead of three months.

And some items were missing.

"Bring back the Parmesan shrimp, please," wrote Carolyn Quivers of Virginia Beach, Va., one of many dismayed diners to post on Red Lobster’s Facebook page. 

"My husband says we aren’t coming to Endless Shrimp again until you do!"

Red Lobster declined several requests for comment. 

But the apparent reason for the missing shrimp: Prices have soared to a 12-year high since a deadly illness called Early Mortality Syndrome (EMS) swept through shrimp farms in Thailand.

Shrimp has become Exhibit A in how the globalization of the food-supply chain has expanded to include not just commodities like coffee, sugar and beef, but virtually everything on the table. 

Once a local delicacy prized for freshness, shrimp is now produced at farms in Asia, South America and Mexico, and sucked up by distributors wherever the price is cheapest.

Shrimp reproduce quickly, can be frozen easily and have a freezer life of 12 months. 

That has spawned a multibillion-dollar global shrimp farming business and made the crustacean a popular item on menus at chains like Red Lobster, Olive Garden, Outback Steakhouse and Panda Express.

But the shrimp trade also illustrates how volatile that global supply chain can be.

A restaurant in Los Angeles can feel the effects of changing weather patterns, natural disasters, or disease on the other side of the world. 

These days, Santa Monica Seafood, the Southwest’s largest seafood distributor, says the Asian shortage has sent prices soaring for Mexican shrimp it buys. 

And, even with an upscale wholesale and restaurant clientele, Santa Monica Seafood isn’t passing along that extra cost, for now. 

Other restaurants, like Sizzler, don’t dare either.

"Most restaurants are cautious about menu price increases in this challenging economy,"
says Don Henry, vice president of purchasing and distribution at Sizzler.

"And I know retailers are just as competitive - but seem to have some more flexibility in pricing."

In their own intense price competition, shrimp growers may have disregarded health and safety issues to cut costs, according to seafood buyers like Casey Hartnett.

"In Asia, the ponds are disgusting,"
he says.

"Of course, if you have tons of shrimp [in a single pond], there’s going to be disease."

Hartnett, 32, is part of the global infrastructure that has emerged to help expand the shrimp trade. His three-person company, Global Seafood Brokers, sources shrimp and snow crab from around the world for U.S. distributors. He says EMS has roughly doubled Asian shrimp prices in a year. A pound of jumbo white shrimp from Asia cost $8.40 a pound in October, according to the National Oceanic and Atmospheric Administration’s weekly report on frozen seafood coming into New York. Prices have subsequently dipped a bit.

EMS first appeared in 2009, when an outbreak in China spread to Vietnam, Malaysia, and now Thailand. The bacterial infection produces toxins that slow growth, prevent reproduction, and eventually kill the shrimp. Infected farms have reported losses of up to 70 percent. Many farms have had to shut down, and Thailand's shrimp exports to the U.S. in July declined 58 percent, from a year earlier.

In May, researchers at the University of Arizona identified the cause of EMS: bacteria whose growth is fostered by overcrowding in ponds. 

But because farmers are reluctant to move to lower-density farming, shrimp production isn’t likely to return to pre-epidemic levels without significant increases in farmed area. 

Experts estimate it will be several years before Southeast Asia can eradicate the disease.

Shortages in Asia sent buyers to Latin America to fill the void. 

However, Mexico and Ecuador couldn't produce enough to make up for the losses.

That has created tension for businesses, such as Sizzler and Santa Monica Seafood, which have shouldered the extra costs.

"We [buy] three-quarters of a million pounds of wild Mexican shrimp,"
says Logan Kock, head of sourcing for Santa Monica Seafood.

"EMS, which kills farmed shrimp, has caused this wild shrimp to move up more than 50 percent over the last year."

The company continues paying for a product its customers expect it to carry.

Shrimp is a big part of the menu at Sizzler, where it accompanies the steakhouse’s surf and turf entrees. 

Henry, the vice president of purchasing, says given the increased prices, the chain is buying shrimp from distributors in six-month intervals, instead of the usual year-long contracts.

As for Red Lobster, the EMS epidemic that likely prompted the quick end to its "Endless Shrimp" promotion this year compounded other financial woes.

 Parent company Darden Restaurants said in December it plans to sell the 705-restaurant Red Lobster chain or spin it off into a separate company.

Alexandra Barker is a graduate student at USC’s Annenberg School for Communication and Journalism.

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