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Shrimp Giant

At 60, Domingo R. Moreira looks at the future of shrimp and sees something that looks a lot like chicken.

Moreira's family has been in the shrimp business since 1960. His father, Domingo A. Moreira, ran 25 fried chicken restaurants in Cuba until concerns about Castro led him to move to Guatemala, where he branched out from poultry by buying shrimp boats. Moreira joined his father in business after graduating from Florida Southern College in 1967, and the family, from a South Miami headquarters, exported shrimp from Guatemala and expanded into a broad range of business and political activities.


BIG DEAL:The Moreiras are building margins with value-added products like grill-ready shrimp on bamboo skewers."We don't want to compete on price," says son Domingo A. Moreira (with father Domingo R. Moreira). "The mission is geting highest value on the shrimp possible.

Meanwhile, shrimp was evolving from a luxury item gathered by boat to a commodity harvested from farm ponds. A little more than a decade after the Moreiras got into shrimp farming in 1990, shrimp became America's most-consumed seafood per capita. Today, most of the shrimp consumed in the U.S. -- 4.2 pounds per capita -- is farm-raised, and the Moreiras have become, as producer, marketer and distributor, the largest single source of shrimp coming out of Central and South America.

"I think wild shrimping is probably a dead end sooner or later," Moreira says. "Very few people go out hunting for wild berries anymore." Today, the industry is consolidating. Production is up, but prices to farmers have plummeted -- a pound of imported shrimp sold for 28% less in 2005 than it did in 1996, according to the National Marine Fisheries Service. "Shrimp farms are going out of business all over the world," says Bob Rosenberry, editor and publisher of Shrimp News International in San Diego. The industry in Thailand is seeking government aid, he says, and banks no longer will lend to Vietnamese farms.

Moreira isn't immune from the competitive pressures. "It used to be a seller's market," he says. But the lament comes with the confidence of someone who's taken a long view of the business and likes his chances.

In part, the Moreiras are banking that shrimp production will follow the trend line of the poultry business. Years ago, he says, it took his father 80 days to raise a 2.5-pound chicken; now it takes 46 days to raise a five-pound chicken. Poultry mortality before harvest runs 4% to 5%, while shrimp mortality is 35% to 40%. "You're learning every day what makes it grow better quicker so you can turn around and provide more product at a cheaper price," he says. More important, the Moreiras have built a vertically integrated operation that allows them to capture several layers of margins. They have interests in two of Guatemala's six large shrimp farms, a shrimp hatchery, feed mills and a processing plant in Guatemala to handle theirs and other growers' harvest, and they have built brands of processed shrimp, Maya and Sunday's Best. All told, the Moreiras market about 60 million pounds of shrimp a year.

A critical piece of their operation is their marketing arm, Ladex, which offers shrimp producers in Mexico, Belize, Guatemala, Honduras, Nicaragua, Panama and Venezuela a way to band together to sell to U.S. and European grocers and distributors. Ladex's 400 customers include retailers like Costco and Albertsons and food distributors servicing hotels and restaurants.

Ladex does $100 million in annual volume, receiving a fixed commission of 5% to 7%. It markets just a small slice of the estimated 8-billion-pound global shrimp market but has the largest single share -- though only 7% -- of the Central and South American market.


SOUTH OF THE BORDER: The Moreiras own shrimping operations in Central and South America, including this plant in Guatemala.

The Moreiras' own farming operations have withstood allegations of pollution and harm to local fishing-based economies. In 2001, according to the New York Times, protests emerged around a Moreira farm in Champerico over its effect on local fishermen, water quality and a fence. Police killed a protester while they tried to protect a farm company lawyer at one public meeting. A second man was killed at the plant weeks later by farm company guards during another protest. The company subsequently moved the fence on its property. Moreira defends the business's environmental record and says the difficulties were caused by thieves in a settlement near the farm and plant who instigated trouble among locals because their attempts to steal shrimp were being thwarted. The company lawyer was attacked while showing that the fence was on company property, and in the second incident, the "same group" broke its way through a door into the plant, Moreira says.Elmer Lopez, a former Greenpeace representative in Guatemala, says local people tell him the farm and its managers have become more positive in trying to help the community and regenerated the mangrove ecosystem. "The company hasn't (had) more problems with communities," Lopez reports. The Moreiras' processing plant provides a free school and medical care in the town.

In February, Ladex announced a deal with Sea Farms International, the largest shrimp farmer in Honduras, pooling resources to have a combined, larger processing capability, plus 10,000 hectares of shrimp farms, two hatcheries, a feed mill, 33 trawlers and the capacity to cold-store 10 million pounds of shrimp. Terms weren't disclosed.

Meanwhile, the family is building margins with value-added products. "We don't want to compete on price," says Moreira's son, Domingo A. Moreira, Ladex's president. "The mission is getting the highest value on the shrimp possible." He brings out a packet of grill-ready shrimp on bamboo skewers, marinated in a butter glaze of fresh garlic and olive oil and vacuum-packed. Producers throughout agriculture follow a similar value-added plan because "people who come up with a little niche can get rewarded for that," says Chuck Adams, marine economist with the Florida Sea Grant program at the University of Florida. "The question is, does that niche market have enough volume?"

The answer to falling producer prices, the Moreiras say, is to lower prices -- to the consumer -- further. Consumers still perceive shrimp as a premium product rather than a staple protein, and as such retailers and restaurants enjoy 200% to 300% margins on it, they say. In parts of Europe around Christmas, some shrimp was cheaper than poultry, Moreira says. When U.S. consumers get to share in the lower prices, "consumption will go right through the roof," and producers will "make it up on volume like we make it up in poultry," he says.

Beginning of the End?


GROWING PROBLEM: Until Asian shrimp farmers began flooding the U.S. market, "We were very profitable," says shrimp boat owner John Williams. now, "A lot of people have dropped out," says the executive director of the Southern Shrimp Alliance.

Florida's best-known shrimp are the pinks, but the future for shrimpers and growers here is anything but in the pink. The business is "not looking good," concedes John Williams, 55, a Tarpon Springs owner of four shrimp vessels and executive director of the Southern Shrimp Alliance, an industry group.

Prices have been in a free fall, he says, since 2002 when Asian growers, shut out of some world markets because of concerns about their use of illegal antibiotics, began dumping their shrimp in the U.S. market, driving down the price the boat owner received for medium shrimp to as low as 80 cents per pound.

Until then, "we were very profitable. We never were overfished. We never were overcapitalized," Williams says, but now, "a lot of people dropped out. A lot of people lost their boats."

National and state marketing campaigns to differentiate wild shrimp from farm-raised to consumers have helped demand for wild shrimp, but more needs to be done, Williams says. "It's the beginning of the end for the commercial shrimp fishermen in the United States," says Bob Rosenberry, editor and publisher of Shrimp News International in San Diego. "They are hunters and gatherers, and hunters and gatherers have always lost the battle to agriculture. I've been saying this now for 30 years. It's just been coming true for 30 years."

Land, labor and production costs, meanwhile, make the outlook for Florida farm-raised shrimp doubtful as well. The state aquaculture division has 24 entities on its shrimp-grower list but most are university-related or experimental. "I can only think of three that might possibly be producing," says the division's chief, Mark Berrigan. "The economics of it have just not proven out here."

OceanBoy Farms, a Clewiston company, has found a way to grow marine shrimp with well water inland, rather than on pricey coastal land. Its shrimp sells at a 30% premium to imported, farm-raised shrimp and is marketed to supermarkets, exporters and distributors as well as direct to consumers through Costco.com, where it sells at around $10 to $12 per pound, including shipping and handling. OceanBoy Chief Operating Officer Steve Walton says the company expects to produce 3 million pounds this year. The shrimp is pathogen free and organic, and the company uses natural feed to improve taste, appearance and nutritional value, lowering cholesterol and raising Omega 3 and Omega 6 content, Walton says. "I think that's why we have an edge," he says. "The way we're trying to beat (farm-raised imports) is value added."

A Quiet Empire

Since coming to the U.S. in 1965, the Moreira family has accumulated real estate holdings in Colorado and Florida, and, overseas, in feed mills, poultry operations and plantain plantations in addition to shrimp. Led by Domingo R. Moreira, the family operation includes his U.S.-born son, Domingo A. Moreira, and sons-in-law Rafael I. Bru, chief operating officer, and Roberto E. Lopez-Ibañez, chief engineer.

Moreira has become known as a political donor and exile leader as well as a businessman, making $370,000 in political contributions from 1980 to 2000, third among Cuban-Americans, according to a Center for Responsive Politics study. He donated to a diverse mix -- 42% to Republicans, 26% to Democrats and 32% to the Free Cuba political action committee -- that included former U.S. Sen. Jesse Helms, R-N.C., and Sen. Joe Biden, D-Del. He became a founding member and a director of the Cuban American National Foundation, the exile group that rose to prominence under the late Jorge Mas Canosa.

Moreira also has funded private-school educations in Miami for underprivileged children and a cancer philanthropy group. He has met with former Russian President Boris Yeltsin and other world leaders to press the exile view. His wife, Brenda, co-hosted Entre Cubanos, a CANF foundation radio broadcast to Cuba.

Moreira says that aside from helping longtime friends such as Republican U.S. Sen. Mel Martinez and Democratic U.S. Sens. Bill Nelson and Joe Lieberman, he is winding down his political involvement. In fact, he says, his most recent political contacts were made not on Cuban matters but on shrimp issues.