Cost-Earnings Study of the American Samoa Longline Fishery: 2009

Abstract

The purpose of this study was to update the cost-earnings information for the longline fishing fleet based in American Samoa and to examine the economic health of the fleet. An in-person survey was conducted in 2010 to collect cost information from the fleet, focusing on the 2009 operating year. This cost-earnings analysis uses both primary and secondary sources of data to provide baseline information needed to support fishery management. This study found that in 2009, the majority of boats suffered net losses from longline operations. Rising fuel costs, which accounted for approximately 27% of total expenditures, coupled with relatively low revenues due to lower albacore catch per unit effort (CPUE), were the major factors leading to poor economic performance. Due to the use of foreign nationals (as opposed to U.S. nationals) as crew members, overall crew compensation was relatively low and accounted for 11% of total expenditures. Compared to unprofitable vessels, profitable vessels were found to generate significantly higher annual revenues while expending less on variable inputs but more on fixed inputs. Results of the study were compared to those of a previous (2001) cost-earnings study of the same fleet, although the results may not be directly comparable due to different sampling methodologies and assumptions.

Sensitivity Analysis

In addition to the cost-earnings study, PIFSC researchers Minling Pan and Keith Bigelow conducted a sensitivity analysis of the longline fleet's profitability in response to changes in the ex-vessel price and CPUE of the fishery's target species, albacore tuna. Using the 2009 cost-earnings data as a baseline, they constructed graphs showing isocurves of profit associated with a range of albacore CPUE values and albacore prices while keeping other economic variables, such as fixed and variable costs, total fishing effort, and non-albacore catches unchanged.

The isocurves shown in the figure below indicate what combinations of albacore CPUE and price result in the same profit and the conditions leading to profit versus economic loss for the fleet. The analysis indicated that profit is highly sensitive to small changes in albacore CPUE and price, and that a marginal change in CPUE or albacore price can render vessels unprofitable.

Isocurves of profit in response to changes in albacore CPUE and price in the American Samoa longline fishery. Color scale indicates 
        profit in $US. Star marks position of the zero-profit curve between profitable and non-profitable conditions.
Isocurves of profit in response to changes in albacore CPUE and price in the American Samoa longline fishery. Color scale indicates profit in $US. Star marks position of the zero-profit curve between profitable and non-profitable conditions.

Reports

Arita S, Pan M
2013. Cost-Earnings Study of the American Samoa Longline Fishery Based on Vessel Operations in 2009. Pacific Islands Fisheries Science Center Working Paper WP-13-009, 29 p. + Appendix.