because they are beyond the control of the 

 fishermen and the Bureau. 



PRODUCTION COSTS 



Over the years, boat owners and fish- 

 ermen have constantly considered how to 

 reduce costs of production. The events 

 of the past seven or eight years have made 

 such efforts increasingly urgent. Under 

 existing circumstances, reducing the cost 

 of catching tuna appears to be the best, 

 if not the only, means of improving our 

 fishermen's competitive position and there- 

 by obtaining for them a larger share of the 

 American market. At any rate, the cost of 

 catching tuna is the central problem, and 

 it will be defined in terms of 1) net in- 

 come of tuna boat operation, and 2) cost 

 factors in boat operation. 



Profit and Loss Experience 



The tuna boat owners expenses conven- 

 iently fall into four categories: 



1. Fixed expenses which include de- 

 preciation and property taxes; 



2. Semifixed expenses which include 

 insurance and repairs; 



3. Crew's share which is subject to 

 negotiation; 



U. Variable expenses which for the 

 most part cover the trip expenses 

 for fuel, provisions, licenses, 

 gear, etc. 



Depreciation and property taxes are 

 fixed because there is little that can be 

 done to reduce them. Insurance and repairs 

 are considered semifixed because the owner 

 is able to minimize them and they vary with 

 the amount of time spent at sea and other 

 factors. The crew's share is subject to 

 negotiation and agreement with the fisher- 

 men's unions, at least for the large 

 vessels. The truly variable expenses are 

 the trip expenses for fuel, provisions, 

 licenses, gear, and so forth, which in some 

 segments of the fleet are shared by owner 

 and crew. Trip expenses are directly re- 

 lated to the time spent at sea - the longer 

 the trip the heavier the expenses and the 

 greater the cost of catching a load of tuna. 



The United States Tariff Commission 

 report (1953) on tuna fish provides data 

 on income and expenses for recent years. 

 They were obtained by circulating ques- 

 tionnaires to boat owners. Included is 

 information for over 100 large bait boats, 

 about 20 purse seiners, and over 200 alba- 

 core boats, which operated in 1953 through 

 195^« Similar material for 35 clippers 

 fishing in 1957 is also provided. 



Figure 1 and table 1 show, for the 

 large clippers and seiners, expenses as 



DISTRIBUTION OF TUNA SALES DOLLAR 

 .37 IN PERCENT 



1953 54 55 56 57 AVERAGE 

 BAIT BOATS 



1953 54 55 56 AVERAGE 

 PURSE SEMRS 



Figure 1. — Average expenses and profit or 

 loss experience of large bait boats and 

 purse seiners responding to U.S. Tariff 

 Commission questionnaires. Expenses and 

 profit or loss are given as a percent of 

 net sales. 



percentages of average annual sales ac- 

 cording to the four categories mentioned. 

 Over the period, sales averaged -Jl83,000 

 annually for the bait boats and $111,000 

 for the purse seiners. From profits or 

 losses as shown, it is apparent that the 

 average owner continues to operate by 

 depreciating his capital investment. The 

 fisherman is not doing much better; the 

 average bait boat crew's share of 35.8 

 percent of sales in 1957 represents less 

 than $5000 per fisherman which is less 



48 



