11 Discussion

11.1 Applications

These profit profiles are intended to support the management of commercial fisheries in the Northeast U.S. These data and analyses offer a number of different applications, including:

  1. Cost summaries* and shares
  2. Operating and total profit estimates
  3. Profits margins

*Additional years of data exist on the Cost Data Visualization Tool for these categories

  1. Cost summaries and shares
    1. These summaries allow end-users to gain a foundational understanding of costs incurred and shares by fishing fleet which can be used in economic analyses to support management, operating profit/net revenue is most often calculated. Across FMPs, operating costs account for varying levels of total costs. It can also demonstrate the impact of policies if they are expected to increase a specific cost category.
  2. Operating and total profit estimates
    1. Information on total payments to crew provide an additional component to operating profit
    2. Operating profits are currently estimated using cost information collected by at-sea observers
    3. Total profits have not previously been estimated for Northeast region commercial fisheries
  3. Profits margins
    1. Allow end-users to gain a better understanding of how gross revenues translate to operating profit and total profit by fishing fleet.
    2. Profit margins calculations can support research into the viability of fishing operations.

Given these analyses, we recommend using these data for analyses and summaries for management frameworks and amendments. Information from this site can be used within the following management action sections

  1. Affected Environment: Human Communities
    1. This section has frequently focused on trends in gross revenue and fishery effort. Profit provides additional information in capturing the recent economic performance of the fishery.
  2. NEPA: Economic Impacts
  3. Executive Order 12866

By examining the economic health of commercial vessels, the implications of management actions on fisheries can be better understood. For example, profit margins provide a baseline understanding of how changes in estimated landings translate to profits. Cost shares provide an overview of which costs are more/less substantial by fishing fleet. Potential management actions include, but are not limited to:

  1. Changes in fishing quotas/days-at-sea
  2. Re-allocation of quota among sectors (e.g. commercial vs. recreational)
  3. Establishment or modification of accumulation limits
  4. Changes in costs faced by fishing vessels (e.g. monitoring)

Until additional cost data is collected, processed and analyzed or cost models have been conducted, these estimates are recommended for generating baseline analyses.

11.2 Data Limitations and Future Work

Though many of these metrics presented on this site are suggested to be used given they are the best information available, there are a number of important data limitations and caveats. First, the Commercial Fishing Business Cost Survey is conducted within the Northeast region every few years, such that a contiguous data time series is not feasible. For some vessel owners, 2022 may have been an unusually profitable year, either through increased revenues, decreased costs, or a combination. In contrast, other vessels likely experienced a less profitable year than normal in 2022. A vessel owner may have been more/less likely to respond based on their economic situation during 2022. It is difficult to assess this effect since the individuals that respond to the survey vary over time and the survey is not conducted annually. Second, a couple of survey cost questions do not directly translate to the income statement presented in Kitts et al. (2022). Mainly, vessel repairs/maintenance cannot be separated from vessel improvements and the principal paid on loans cannot be separated from the interest paid. The results presented include combined repair/maintenance and upgrade/improvement potentially biasing profits low. The amount paid on loans is not included, potentially biasing profits high. Third, when using information from this site, attention should be placed on the number of respondents and the response rate associated with each gear or fishery group. Though efforts are ongoing to understand the representativeness of the data, there can still be caveats at the unit of observation (i.e., gear and species level may be sparse for creating fleet-wide inferences). Fourth, end users should be aware of other fishery metric data sources. For example, while revenue data is provided for all vessels highlighted on this site, revenue information for all commercial fishing vessels in the Northeast is readily available to all NOAA Fisheries staff in the region. For industry members and other interested stakeholders outside of NOAA Fisheries, the NEFSC Performance Measures site provides average revenue by vessel as well. Lastly, as a general caveat, there is currently no model to estimate the costs across survey non-respondent such that means and weighting are the only method of estimating costs for vessels outside the snapshots. This can cause issues in applying a mean to a single vessel as results vary greatly from vessel to vessel.

In terms of future developments, as more years of data become available, we can enhance our understanding of the economic performance of fishing fleets in the region. As time and resources permits, future survey data will feed into the profit calculations presented on this site. Similar to the gear/FMP dropdown function, the end-user will be able to query the year of interest.