The Gulf shrimp permit moratorium expires in October, and the proposal to run it for another ten years arrives with the permit pool 646 smaller than in 2008 and closing on the 1,072 floor the council set

The fleet is shrinking faster than the rule that limits it.

The National Marine Fisheries Service proposed on Tuesday to extend the moratorium on new federal commercial shrimp permits in the Gulf for a further ten years, to 26 October 2036. The current one expires after 26 October this year. Comments close on 24 September, which is a thirty day window on a rule that would run for a decade.

The service also asks whether five years would be better, and says so in the text rather than burying it in an alternatives table.

Twenty-five years of vessels leaving

Before 2001 roughly 4,000 vessels fished for shrimp in federal Gulf waters, and none of them needed a federal permit to do it.

The permit requirement arrived in 2002, and about 2,951 vessels were licensed under it over the following four years. Then fuel got expensive and shrimp prices fell against imports, boats left, and the fishery was still judged to have more capacity than it needed. The council recommended a ten year moratorium on new permits, which took effect on 26 October 2006. By 2008 there were 1,933 permits in the pool. The moratorium was renewed once, in 2016, for the ten years that end this October.

There were 1,287 permits valid or renewable at the end of 2024. That is 646 fewer than in 2008, and every one of those 646 is gone for good: a permit that goes unrenewed for a year is terminated and removed from the pool permanently.

The floor is 1,072

In 2017 the council set a minimum permit threshold for the fishery at 1,072.

That number is the predicted count of vessels needed to land the aggregate optimum yield, and it was calculated to sit above the point where sea turtle and juvenile red snapper bycatch limits come into play. There are now about 1,200 permits valid or renewable. The gap is a little over a hundred, and the trend that produced it has run in one direction every year of the last decade.

The service says the extension would buy the council time to re-examine whether 1,072 is still the right number in light of new science and the current state of the fishery. That is also its argument for why a shorter extension might be preferable: five years would force the question sooner.

What the boats actually earn

The regulatory flexibility analysis is the part of this document worth reading, because it puts numbers on a fishery that is usually described in adjectives.

An average of 932 vessels actually landed shrimp each year between 2019 and 2023, out of the 1,376 that held valid permits. The average active vessel grossed $332,653 a year. Average net cash flow per vessel across the whole period was $21,249 and average net operating revenue was $4,810, both in 2023 dollars.

Those averages hide a turn. Both measures rose through 2021 and both went negative in 2022 and stayed negative in 2023. In 2023 the average active vessel ran a net cash flow of minus $4,885 and net operating revenue of minus $14,635. The service attributes the deterioration to low shrimp prices, increased foreign competition and rising operating costs. The best year in the sample belonged to one boat, which grossed about $1.51 million in 2020.

Every business the rule would directly regulate is a small entity by the service's own standard, which sets the line at $11 million of combined annual receipts. It counts up to 1,287 of them, and says plainly that the figure overstates the true number because it has no ownership data and has assumed one owner per vessel.

What the service says it is doing

The proposal is candid about who wins.

Extending the moratorium keeps a permit a limited asset, and that value would disappear if the moratorium lapsed. It also keeps a barrier in front of anyone who wants in, and a new entrant pays more for a moratorium permit than an open access permit would cost. The service says the benefit to current holders outweighs the cost to new entrants, and then says the number of prospective new entrants and their operating characteristics are unknown and cannot be estimated with the data it has.

The median price of transferring a permit between 2022 and 2024 was $5,250. The service notes that comparable limited access permits in other fisheries sell for several times that.

Gulf shrimp stocks, it says, are currently healthy.