TETTEY ET AL.: PROFITABILITY OF GULF OF MEXICO SHRIMP VESSELS 



reported by the National Marine 

 Fisheries Service. 



Analyses 



A computer program referred to as a budget 

 generator was devised to organize and assimilate 

 the data for various analyses. The program al- 

 lowed data reports to be produced according to the 

 desired vessel classifications, interest rate, per- 

 cent financed, number of years financed, number 

 of loan payments per year, depreciation method, 

 crew share agreement, rate of packing charges, 

 payroll tax rate, discount rate, and planning hori- 

 zon. The program reported results in the form of 

 annual costs and returns budgets and projected 

 cash flow budgets. 



The following analysis first examines a detailed 

 annual income and cash flow statement for a ves- 

 sel purchased new in 1971. This detailed annual 

 income and cash flow is then compared for the 



TABLE 1. — Number and types of Gulf of Mexico 

 shrimp vessels surveyed operating out of Texas 

 ports. 



1 Coast Guard registered length 



same vessel operated under identical conditions, 

 but purchased in 1977 and 1979. Next, six different 

 types of vessels (three wood and three steel; Table 

 1) are compared by examining their net returns 

 during the three different periods of investment. 

 Finally, investment performance is analyzed 

 through net present value (NPV). 



In all the above analyses three investment 

 periods (1971, 1977, 1979) are considered. A given 

 vessel is assumed to be operated under identical 

 conditions regardless of the investment period. 

 Since the actual sale price of the vessel at the end 

 of the investment period is determined by the 

 economic environment at that time, a comparison 

 is made between the effects of selling the vessel at 

 a salvage value of 35 and 100% of the original 

 price. 



RESULTS 



Detailed Annual Budgets and Cash Flow 



Tables 2 and 3 represent detailed annual income 

 and cash flow budgets for a newly financed 1971 

 steel vessel, 20.1-21.5 m in overall length. Over the 

 10-yr study period, annual revenue doubled al- 

 though it decreased by 18.9% in 1974 and by 7.4% 

 in 1980. The decrease could be attributed, in part, 

 to the decrease in exvessel price for shrimp from 

 $4.23/kg to $3.62 in 1974 and from $8.38 to $7.06 

 in 1980. Another contributing factor was poor 

 landings recorded in those periods (Fig. 1). 



TABLE 2. — Annual income statement for a steel vessel, 20.1-21.5 m. long, operating out of Texas ports, 1971 to 1980. 



'Vessel sold for salvage value. 



2 Vessel sold for original purchase price. 



3 Vessel was purchased for $129,767; 75% financed at 7.1% 



"The difference between net revenue and net return after tax 



interest. 



es includes owner s salary, social security tax for owner, and income tax. 



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