Economic Impacts of Hurricane Katrina

Project Duration: October 10, 2005 to September 30, 2006


An assessment of seafood processing plants and seafood dealers, livebait boats and dealers, marinas, commercial fishing, for-hire charter and recreational boating fleets was undertaken in Mississippi to determine the level of damage sustained as a result of Hurricane Katrina and Hurricane Rita. The devastation by these hurricanes has created an urgent and compelling need to complete damage assessments in the affected areas in as short a period as possible. Congress will be developing damage assistance programs for the Gulf region in the near future. An accurate assessment of the damage created by these storms is needed to ensure that federal funds are both adequate and allocated to the appropriate sectors and recipients. The assessment, to the extent possible, identified all facilities and boats in the affected areas that existed prior to the hurricanes, identified original physical characteristics (number of buildings,boats, and facilities, types and quantity of equipment) and production levels for these operations, and provided an estimate of the cost of rebuilding or repairing the facilities structure and equipment to their pre-hurricane state so that harvesting and processing of seafood products can resume.

Ocean SpringsThe commercial seafood industry which includes the harvesting, processing and distribution of all seafood products created a total economic impact of $900 million in 2003. The total ex-vessel value of commercial landings amounted to $46 million while the total plant-gate value of commercial seafood production was $338 million in 2003. The recreational fishing industry which includes saltwater and freshwater fishing produced a total economic impact of $463 million in 2001 and $1,306 million in 1996. The economic impacts of recreational saltwater fishing in 1996 and 2001 were $293 and $98 million, respectively (ASA).

The assessment of the impacts of this natural catastrophic event on the state commercial and recreational fisheries and charter boat industries covered the following instate boats/vessels and facilities (net of double-counting due to multiple licenses in some boats and plants):

MeetingData were collected from surveys mailed to all the boats/vessels and facilities (items 1-3) and a sample of the recreational boats (item 4) in the three coastal counties of Hancock, Harrison and Jackson. Complementary personal interviews and site visits of facilities were conducted by personnel of the Mississippi Department of Marine Resources-Office of Marine Fisheries and the Mississippi State University-Coastal Research and Extension Center.

A total of 510 interviews with resident Mississippi commercial fishermen were completed between November 2005 and February 2006, representing an average response rate of 49.6%. Of the 1,030 questionnaires mailed to these fishing establishments, 62 mails were returned since they were undeliverable to the last known or forwarding addresses, with one commercial fisherman reported as deceased. Excluding the 62 returned mails, the net response rate to the mail and personal survey was 53%.

Eighty interviews with seafood processing plants (32), seafood dealers (43) and land-based support facilities (5) were completed between November 2005 and February 2006, representing an average response rate of 37.2%. Of the 215 questionnaires mailed to these business establishments, 40 mails were returned since they were undeliverable to the last known or forwarding addresses. Excluding the 40 returned mails, the net response rate to the mail, personal and telephone survey was 46%.

Forty-two charter boat operators participated in the mail survey and personal interviews between November 2005 and February 2006, representing a response rate of 42%. There were 37 marinas in the three coastal counties when Hurricane Katrina landed in the Mississippi Gulf Coast. All of these facilities were damaged by the hurricane. A sample of 10 marinas responded to the survey representing a response rate of 27%. Eleven livebait dealers out of the 30 listed responded to the survey representing a 36.7% response rate. All of the livebait dealers were damaged by the hurricane.Rec

The total estimated damages on the resident Mississippi commercial fishing fleet amounted to $35.3 million. These damages represent 26.8% of the total initial investment on the commercial fishing fleet. The damages to boats, fishing gear and other accessories contributed 97% of all reported damages. Damages reported by commercial fishermen ranged from $0 to $600,000. Only 13% of all commercial boats/vessels did not receive any damages associated with Hurricane Katrina.

The total estimated damages for the 69 seafood processing plants, 141 seafood dealers and 5 land-based support facilities amounted to $101.3 million. These damages consisted of $77.8 million for processing plants, $21.3 million for seafood dealers and $2.1 million for land-based support facilities. Among the processing plants, damages to buildings, equipment and accessories comprised of 72% of total damages, while cleaning and disposal added 2% and inventory losses added 26%. Among seafood dealers, the distribution of total damages was as follows: damages to buildings, equipment and accessories - 90%, cleaning and disposal - 4%, and inventory losses - 6%.

The total estimated damages on the resident Mississippi ‘charter boat for hire’ fleet amounted to $2.2 million. The damages to boats and engines accounted for more than three-fourth of total damages to the charter fleet. The reported damages ranged from $0 to $111,000 per boat with an average of $22,523 per boat. Thirty-one percent of the operators interviewed reported no damages on their boats, engines, fishing gear and other accessories. The total damages to the Mississippi marinas located in the three coastal counties reached $41.38 million. The individual damages reported by the participating marinas ranged from $8,000 to $5,392,000 with an average of $1.11 million per marina. Approximately 80% of the reported damages involved damages on buildings, slips and storage. The total damages to livebait dealers ranged from $35,700 to $415,000 which averaged $139,028 per facility or totaled $4.17 million

The tasks involved in estimating the economic damages to the Mississippi seafood establishments, and commercial and recreational fisheries associated with Hurricane Katrina had been extremely difficult and very time-consuming. Majority of the operators and/or owners of the boats/vessels and facilities, however, had been extremely cooperative in providing the economic information required in conducting a fairly exhaustive assessment. The results of the assessment indicated massive devastation of all the sectors included in the survey.

This information on hurricane damages had been transmitted to local, state and federal agencies responsible for managing, regulating and assisting these industries. The primary short-term needs would include the removal of debris in fishing grounds and waterways, rebuilding of docking, repair, fuel and ice facilities, and creation of storm shelters for boats/vessels in safe inland waters. The future of these industries would depend on the timing and magnitude of the response of these agencies and the private sector to the devastation.

*To View Publications on the Economic Impacts of Hurricane Katrina, Click Here.