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Trade Adjustment Assistance Training

Trade Adjustment Assistance Training. Carole Engle UAPB. Outline:. Economics Options to improve profitability Marketing. Economics:. Price cycles Financial indicators. Catfish Prices & Production Costs. Average Price Paid to Catfish Producers ($/lb).

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Trade Adjustment Assistance Training

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  1. Trade Adjustment Assistance Training Carole Engle UAPB

  2. Outline: • Economics • Options to improve profitability • Marketing

  3. Economics: • Price cycles • Financial indicators

  4. Catfish Prices & Production Costs

  5. Average Price Paid to Catfish Producers ($/lb)

  6. Average Fillet Price Received by Processors ($/lb)

  7. Average Price Paid to Catfish Producers ($/lb)

  8. Total “Catfish” Imports 1990-2003

  9. Sluggish economy/Sept. 11

  10. Strength of U.S. $

  11. Quarterly Retail Sales, 1999-2003

  12. Short & long-term financial decisions: • Is it profitable in the short run? • Is it profitable in the long run? • Can it generate enough cash when needed to pay the bills (liquid)? • Can it generate enough value over time to pay off the debts (solvency)?

  13. Breakeven Prices (based on enterprise budgets)

  14. Breakeven Prices (based on enterprise budgets)

  15. Breakeven Prices (based on enterprise budgets)

  16. Financial Analysis: the 3 key statements • Income Statement • Balance Sheet • Cash Flow Statement

  17. How Are These Calculated? • Floppy disk includes spreadsheets with: exercise balance sheet, income statement, cash flow budgets • The correct versions, the financial ratios, & • Includes a brief interpretation of each ratio and how to improve it.

  18. Short-run profits: from the income statement Gross Revenue “Pie” Payments for feed, seed, fuel, etc. Rent to owner for rented land Interest to lenders for borrowed money Wages to employees Where can I save money? NFI to operator for unpaid labor, equity capital, & management

  19. Monthly Cash Flow Budget

  20. Cash inflow - Cash outflow (Operating expenses) (Fixed cash expenses) (Debt payments) = Cash available + New borrowing = Cash balance

  21. Cash Flow Coverage Ratio (Cash available/interest & principal payments) Cash Flow Coverage Ratio = (0.26)

  22. Debt-Servicing Ratio (interest & principal payments/cash inflow) Total Cash Inflow = $285,849 Debt-Servicing Ratio = 0.21

  23. Cash Flow Scenarios

  24. Liquidity Measures for Two Scenarios

  25. Year 1 Year 2 How much debt is too much?

  26. Year 1 Year 2 How much debt is too much?

  27. Year 1 Year 2 How much debt is too much?

  28. Year 1 Year 2 How much debt is too much?

  29. Questions? Discussion?

  30. Options to Improve Profitability • Maximum production vs. • maximum profit • Stocking densities/strategies • Feeding strategies • -every other day vs. every day • -feed prices • Producing optimal sizes of • fish

  31. Maximum yield Maximum profit Stage I Stage II Stage III Yield Input level

  32. Studies at UAPB Identified Economic Relationship Between Feeding and Stocking • Estimated a production function. • Profit-maximizing stocking rates ranged from 6,500 - 8,500, depending upon feed and fish prices.

  33. What would happen with different feed and catfish prices? To maximize profits: • At low fish prices, feed rates and stocking rates would decrease. • At low feed prices, feed and stocking rates would increase. • At high feed prices, feed and stocking rates would decrease.

  34. How low should you go? • Model results dropped profit- maximizing stocking rates to 5,000/ac at $0.60/lb. • At very low prices, may not be possible to calculate true profit-maximizing stocking rate. • Farmers need to stock at rates that ensure financial payments are met.

  35. Optimal stocking densities with high feed prices • Fish prices have larger effect than varying feed prices. • Fish prices of $0.70/lb (from $0.65/lb) nearly offset $45/ton increase in feed price in terms of optimal stocking density.

  36. Feed Prices

  37. Breakeven prices as feed price increases

  38. Current Feeding Strategies • Every other day feeding • Carryover fish may be small following year • Restricted daily feedings • May equal thin fish • Catfish exhibit compensatory gain • Can gain weight extremely fast, at low FCR when full feeding resumed.

  39. Processing Cost by Size

  40. Factors Impacting Costs • Economies of Scale: higher throughput will help to reduce unit costs by spreading fixed costs over more units. • Technology/processing practices: • Automatic presorting of fish by weight • Chilling/cleaning fish between deheader & fillet line • Reduction in trim operation • Interfacing trim, grading to reduce handling • Online monitoring and control of productivity.

  41. Factors Affecting Costs • Production Impacts • Characteristics of fish received have large impact. • Off-flavor, disease, weight to yield ratios, weight distributions • 2% normal seasonal variation in yield • Distribution of fish sizes received from each pond varies widely.

  42. Big Fish Studies • Big Fish I • 4,500/acre, 0.6 lb • FCR 1.8-2.0 • Survival 83-94% • 32% protein • Big Fish II • 4,500/acre, 0.5 lb • FCR 1.7-1.9 • Survival 87-91% • 32% protein • No impact of fingerlings

  43. Stocker Net Yield

  44. Individual Weight

  45. Management for Larger Mesh Sizes? Fingerlings Yr 1 Single batch 0.8-1.16 lb 4,700-7,900 Multiple batch 0.6-1.01 lb 6,500 lb/yr For stockers 0.25-0.80 lb 10,000 lb/yr Growout 0.5-0.6 lb stockers 1.3-2.6 lb 6,300 lb/yr

  46. Questions? Discussion?

  47. Catfish Markets and Marketing

  48. U.S. per capita consumption seafood, beef, pork, broilers

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