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



and high vessel costs, resulting in higher annual 

 principal and interest payments. 



SUMMARY AND CONCLUSIONS 



Due to the inflationary trend in recent years, 

 investments made in the early part of the last 

 decade performed better than those made in the 

 latter part. Steel vessels generally showed higher 

 economic profits than wooden ones, and medium- 

 sized vessels (18.6-20.0 m in overall length) were 

 the most efficient vessels to operate in the Gulf of 

 Mexico. 



Shrimp production in the Gulf of Mexico has 



1971 1972 1973 197M 



Investment Period: 



1975 1976 

 TIME (TERRS) 



1971 TO 1980  1977 TO 1980 ' 1979 TO 1980 

 ZERO LINE RDDEO FOR REFERENCE 



FIGURE 5. — Net revenue for a wooden vessel 20.1 to 21.5 m long 

 operating out of Texas ports by investment period. 



-50- 



1971 1972 1973 1974 1975 



Investment Period: time iyer^si 



1971 TO 1SE • 1977 TO 1980 m 1979 TO 1980 

 ZERO LINE RODEO FOR REFEF I 



FIGURE 6. — Net revenue for a steel vessel 18.6 to 20.0 m long 

 operating out of Texas ports by investment period. 



significant seasonal variations — periods of low 

 shrimp landings and periods of abundant catch. 

 Although the general trend in real prices was 

 upward, high variability has created short-run 

 uncertainty for shrimp producers. In general, 

 after-tax net revenue was lowest in 1974; 1978 was 

 the most favorable year of operation. 



Vessel terminal value plays a major role in de- 

 termining overall returns to investment. The NPV 

 for the investment increased when the terminal 

 value rose from 35 to 100% of the original vessel 

 cost (Table 6). Based on the net present value 

 criterion, the 18.6-20.0 m steel vessels once again 

 proved to be the most feasible investment. Inves- 



TABLE 6. — Net present value for each investment period, salvage value, and vessel type 

 for vessels operating out of Texas ports 



371 



