AP: Fishing Industry Reeling from Leaping Fuel Prices

We touched a few weeks ago on all the protests going on in Europe due to high fuel prices - especially prevalent were truckers and fishermen in country after country. Yet here in the U.S. - nothing. We are good soldiers who take our pain quietly I guess. Or maybe we accept the slow growth (but no recession), low unemployment, low inflation reports shoved down our throats constantly and pundits who blame the media for "creating angst among the public, where there is none to be had". Anyhow it's all an interesting farce and I continue to wonder how much longer it can go on.

I repeat weekly, and have for months on end, inflation is a tax on all things - producers and consumers. The 2nd and 3rd wave effects are many and not considered by most, certainly not in the hallowed halls of NYC. The irony is how vicious it can be in certain subsectors.... inflation in one item will cause pullbacks, which in turn will cause 2nd and 3rd wave inflation in another area. For example, inflation in energy costs cause fishermen to go out of business, which causes shortages of fish, which ultimately leads to ... inflation in fish. Or less fish on the market which leads to more demand for meats which drives up prices for a limited amount of meats. It is a vicious cycle.

Yet Wall Street cheered and clapped every Fed cut all fall and winter (flood us with cheap money, flood us - ohhhhh feels so good) so they could get that crack like high from seeing their accounts bounce up 1.2% that day. And they cheered $90 oil, $100 oil, $110 oil, $120 oil, $130 oil - it's all good I mean it's just a bunch of numbers on my trading screen anyhow. The real economy does not matter to us - we live in a parallel universe! Then finally around crude $135 they seemed to realize ever higher oil is not a great thing after all... but now we have this Frankenstein let loose on the world. Sadly, oil is truly the grease for the world economy - and as it sprints ever higher the ultimate effect is very clear --> global slowdown - the only "cure". And even then it will be a temprorary one as creditor nations, post slowdown, ramp up demand for fuels to grow their economies... while we sit in 5th gear sueing OPEC, and fighting off solar and wind legislation.

But back to the fishermen, and why I say food will be the next wave of inflation - because even if/when oil does begin to drop in response to global slowdown it will be too late for many small truckers put out of business, many fishermen, many ranchers, etc - and the shortages left in their wake will be causing agflation far after crude begins to drop. Inflation is indeed, the cruelest tax.

• Leaping fuel prices are sinking the fortunes of America's commercial fishermen, some of whom may soon call it quits for good.
• In Alaska, boats that typically haul in rockfish and perch sit docked for prolonged periods. In Texas, shrimpers are traveling to Mexico just to buy cheaper diesel. And along the East Coast, lobstermen are making fewer trips to their traps.
• Unlike shippers, commercial airlines and other industries that pass higher fuel costs along to customers, fishermen don't have the same flexibility. Not only does fresh fish have a short shelf life, but U.S. families can easily substitute their diets with less expensive chicken, pork and beef -- even at time when the cost of meat is on the rise.
• "Fishermen can't come in and say, 'My costs just went up, so you're going to have to pay me more,'" said Bill Adler, executive director for the Massachusetts Lobstermen's Association. Instead, the dealer offers a price and it's "take it or leave it. He knows you got a product that has to be alive. He knows you've got to get rid of them."
• U.S. fishermen have in recent years faced increasing pressure to keep prices down because of low-cost imports and farmed fish. The 64 percent rise in the cost of diesel over the past year -- with spikes of as much as 75 percent in some parts of Alaska -- means already-tight profit margins are being stretched even further, leaving less take-home pay for captains and crews.
• "It's as bad as I've ever seen, and I've been at it 45 years," said Jimmie Ruhle, president of the trade group Commercial Fishermen of America and a third generation fisherman out of Wanchese, N.C
• While fishermen in Europe and Asia have staged disruptive protests over the financial damage high fuel prices are causing, their counterparts in the U.S. are hopeful that communications with Congress will lead lawmakers to take action. (ah such an idealistic bunch - relying on this era of Congress for real solutions... a noble thought - but it's not the 1950s fellas)
• "We haven't resorted to blocking our ports in protest like France and Spain. We're not asking for handouts," said Sara Stoner, a Petersburg, Alaska, boat captain who sent a petition to Congress seeking federal assistance with tax relief or low-interest loans.
• ... "in the short-run people will go out of business," said Knapp.
• ...fisherman Jeff Scott. Instead of being out on the sea gathering perch or rockfish, a 42 percent increase in the cost of diesel in the last six months prompted him to tie up his boat for nearly two months. "We are rapidly coming up on breaking point," said Scott, who sounded desperate after a brief trip to sea this week.
• There's very little wiggle room for this federally regulated industry. Boat owners and captains say they are already hamstrung by rules aimed at keeping the fish stocks healthy: mandated quotas, trip limits, even prescribed seasons.
• "It won't take much more of this to put a lot of people out of business."

The first part of tackling a problem is admitting you have one. We amazingly remain the only country in the globe with little inflation. Lucky us.