Economics of the UK Fishing Fleet 2017

Economics of the UK Fishing Fleet 2017

Economics of the UK Fishing Fleet 2017

The authors would like to thank the many people who contributed to this study and report.

We are especially grateful to: •

The several hundred UK vessel owners and skippers who contributed their vessel accounts, completed questionnaires and participated in interviews.

•

The national fishermen’s organisations for their support and the producer organisations, vessel agents and fishermen’s associations throughout the UK who assisted.

•

The UK government fisheries departments, and the Marine Management Organisation, particularly Kevin Williamson, Matt Elliott and their team.

•

The many firms of accountants who supplied accounts on behalf of vessel owners.

•

Euan Mackenzie, Kelly Beatson, Richard Lilley and Sienna Gray who contributed to the data collection phase of the research.

•

The authors would also like to thank Hazel Curtis, Sébastien Metz, Kirsten Milliken, Sadia Ali and Kelly Beatson who helped to create the data set for this report.

November 2018 Seafish Report No. SR728 ISBN No. 978-1-911073-34-5 © Copyright Seafish 2018

Authors: Steve Lawrence Marta Moran Quintana Arina Motova

Seafish Economics Seafish 18 Logie Mill Logie Green Road Edinburgh EH7 4HS

01

Economics of the UK Fishing Fleet 2017

Contents Executive summary

04

Introduction 05 The UK fishing fleet in 2017

06

– Fleet

07

– Landings

08

– Employment and GVA

10

– Financial performance in 2017

11

Home nations analysis

12

– Fleet

12

– Landings

14

– Employment and GVA

16

Fleet size and activity

18

Fleet landings

22

Fish prices

23

Fishing efficiency

24

Annual operating costs

26

Economic performance of the fleet

32

Methods

36

Glossary and list of acronyms

40

Further reading

41

02

03

Economics of the UK Fishing Fleet 2017

Executive summary •

Overall, the performance of the UK fishing fleet in 2017 was largely similar to that of 2016. Particular changes in average prices, income and costs are discussed in the following points.

•

The total number of active fishing vessels increased from 4,637 in 2016 to 4,701 in 2017. Of these active vessels, around 1,500 were classed by Seafish as low activity vessels with a fishing income of less than £10,000.

•

Total fishing income for UK vessels increased from £946million in 2016 to £984million in 2017 (nominal figures). The increase in fishing income was mostly due to higher average prices of shellfish species in 2017, therefore vessels relying on shellfish for income benefitted most.

•

The total operating profit of the UK fishing fleet in 2017 was an estimated £254million. This is a 4% decrease (in nominal terms) from 2016, when it reached £265million. The average operating profit margin of the fleet decreased from 22% in 2016 to 19% in 2017.

•

The decrease in operating profit was largely driven by an increase in the fleet operating costs, which was mainly due to a higher annual average price of fuel in 2017. In nominal terms, the average price of fuel increased by 73% between January 2016 and December 2017. Total spend on fuel of the fleet increased by 26% (in nominal terms) in 2017 to an estimated £119million compared to 2016. Operating costs increased from 78% of total income in 2016 to 81% of total income in 2017.

•

Seafish researchers interviewed around 400 skippers and vessel owners during the summer of 2017. These interviews highlighted issues such as the abundance of fish, access to quota, fuel price, weather and other issues as the main factors impacting the financial performance of businesses. Seafish’s Quay Issues magazine investigates these concerns in more detail, looking at innovative approaches to tackle the challenges faced by the industry.

•

Interviewees reported a mixture of ambitions for the next few years.

Vessel owners and skippers mentioned several factors when discussing business limitations and uncertainty including the future political and trade landscape, abundance of fish, oil price, quota access and the weather.

NB: All financial estimates for 2017 will be revised when vessel accounts for that year are available in early 2019. A new annual report will be published based on updated estimates.

04

Introduction

Economics of the UK Fishing Fleet 2017

This report provides a detailed insight into the financial and operational performance of the UK fishing eet in 2016 and 2017. This is the twelfth edition of this annual report. We hope that accurate fleet economic data and analyses will help inform decisions and help to enhance fisheries management and benefit the UK eet in the long-run.

The report presents economic estimates at UK, home nation and fleet segment level for the years 2016 and 2017. The estimates are calculated based on samples of fishing costs and earnings gathered by Seafish as part of the 2016 Annual Fleet Economic Survey. The data does not include or reveal any individual vessel data, only segment totals and averages.

Estimates for 2016 are based on same year costs and earnings samples, official statistics on landings, capacity and effort, and fuel price. Estimates for 2017 are based on same year landings and effort data, fuel prices and 2016 cost and earning samples. The different estimation methods are due to a time lag in the availability of company accounts. 2017 estimates should therefore be considered early estimates. Seafish will revise those estimates when 2017 vessel accounts become available in early 2019.

The dataset presented in this report is downloadable as an Excel file from the Seafish website. The website also offers access to our full suite of publications covering the economic performance of the UK seafood catching and processing sectors. Bespoke analyses are available upon request and depending on sufficient data being available.

If you have any comments about this report, would like to suggest improvements or would like more detailed information, please contact us at: Seafish Economics Seafish 18 Logie Mill Logie Green Road Edinburgh EH7 4HS Telephone: 0131 524 8663 E-mail: steven.lawrence@seafish.co.uk Production of this report is only possible with the goodwill of vessel owners (and their accountants) who participated in the survey.

05

Economics of the UK Fishing Fleet 2017

The UK fishing fleet in 2017 Summary Total UK Fleet Fishing income 2016

£946 million

2017

£984 million

Total UK Fleet Turnover 2016

£981 million

2017

£1 billion

Total UK Fleet Operating cost 2016

£716 million

2017

£771 million

Total UK Fleet Operating profit 2016 2017

£265 million £254 million

Total UK Fleet GVA 2016 2017

06

£504 million £497 million

Economics of the UK Fishing Fleet 2017

Fleet

4,701

74%

Active Vessels

In 2017 there were 4,701 active registered vessels in the UK fishing fleet. In addition there were 1,565 inactive vessels, most of which were small scale vessels under 10m in length.

¢

ctive vessels (Fishing A income >£10,000 per vessel)

¢

Inactive vessels (Fishing income £0 per vessel)

¢

ow Activity vessels L (Fishing income <£10,000 per vessel)

Of all active vessels are under10m The UK fishing fleet is highly diverse in terms of types of vessels and species targeted. In 2017 three quarters of active vessels (74%) were under 10m in length. These vessels operate mostly in the inshore areas around the UK, while larger vessels tend to operate further from the shore.

36%

40%

Approximately a third (36%) of registered vessels active in 2017 were classed by Seafish as “low activity”. Low activity vessels are defined as those with annual fishing income under £10,000.

UK fishing vessels also vary in the types of gears used. Approximately 40% of active vessels (excluding low activity vessels) used mainly static or passive gear (pots, hooks, drift and fixed nets).

Vessels using mobile (or towed) gears include dredgers, trawlers or seiners.

Low activity vessels

Use static or passive gear

07

Economics of the UK Fishing Fleet 2017

Landings Map of weight of landings by port The UK fishing fleet landed nearly 719,000 tonnes of fish and shellfish in 2017. Most landings were made in UK, with Peterhead, Lerwick and Fraserburgh being the main UK landing ports by weight. Landings abroad were mainly in Norway, Denmark, the Netherlands and Ireland.

UK fleet landings By weight

Over 30% of total landings by weight is made up by Mackerel alone.

Total UK Fleet Landing location UK

08

60% 40%

Abroad

Economics of the UK Fishing Fleet 2017

Average first sale price by species group

Value of landings

The total fishing income of the UK fleet was £984million in 2017. This represents a 4% increase (in nominal terms) from 2016. This increase was mostly due to an increase in the value of shellfish landings, which in turn was due to an increase in average prices.

2000

£ / tonne

£984m

2500

1500 1000 500 0

2009 ¢

2010

2011

Demersal

¢

2012

2013

Pelagic

¢

2014

2015

Shellfish

2016 ¢

2017

Average

Top species landed in 2017 by weight and value

Weight landed (thousand tonnes)

250

226,900 t

200

150

84,100 t

100

66,400 t 38,400 t

36,000 t

Blue Whiting

Cod

Crab

£77.9 m

£74.3 m

Cod

Scallops

50

0

Mackerel

Herring

250

£203.4 m

Value landed (million £)

200

150

£99.2 m

100

£62.1 m

50

0

Mackerel

Nephrops

Crab

09

Economics of the UK Fishing Fleet 2017

Employment and GVA Employment by home nation According to the UK Sea Fisheries Statistics 2017 there were an estimated 9,710 full time fishermen working on UK registered vessels in 2017, a 3% increase compared to 2016.

There was also an estimated 1,982 part-time fishermen.

929

Overall Fulll-Time:

9,710

Part-Time:

1,982

Total:

11,692

Scotland 3,932

Fulll-Time:

686

Part-Time:

867

Part-Time:

152

Total:

838

4,799

England

Wales

Fulll-Time:

4,657

Fulll-Time:

435

Part-Time:

642

Part-Time:

321

Total:

756

Total:

The segment with most FTE jobs was the UK under 10m pots and traps segment, which had 929 FTEs spread across 1,156 vessels in 2017. This means less than one full time equivalent job per vessel, reflecting the fact that many of these small vessels do not operate at sea all year round.

Northern Ireland

Fulll-Time:

Total:

FTEs on under 10m pots and traps vessels

5,299

£497m

Gross Value Added (GVA) Gross Value Added (GVA) is used as a measure of the contribution to the economy of an individual industry in the United Kingdom. It is also used for estimating Gross Domestic Product (GDP), a key indicator of the state of the whole economy.

The Gross Value Added (GVA) of the UK fleet in 2017 is estimated at £497million (nominal figures), a 1% decrease compared to 2016. The largest share of GVA corresponded to vessels over 24m length.

10

Economics of the UK Fishing Fleet 2017

Financial performance in 2017

£1 billion 4% Total UK Fleet Turnover

Non-fishing income

Turnover is the sum of fishing income and non-fishing income and can include fees for guard duties of oil facilities, use of vessel for research operations, etc.

An estimated 4% of total UK fleet turnover was nonfishing income in 2017. This figure includes income for leasing out quota as well as activities such as guard duty and tourist trips.

When adjusted for inflation, turnover has risen 3% since 2016 mainly as a result of increased fishing income.

42p

£254m

Average annual price per litre increased from 34p per litre in 2016 to 42p per litre in 2017.

The total operating profit of the UK fleet decreased by 4%, from £265million in 2016 to £254million in 2017. This decrease reflects the increase in operating costs as a proportion of income in 2017, due to higher fuel costs not completely compensated by a higher fishing income.

Average fuel price per litre

The total fuel expenditure of the fleet as estimated by Seafish increased by 26% from £95million in 2016 to £119million in 2017.

Operating Profit

11

Economics of the UK Fishing Fleet 2017

Home nations analysis Fleet Fleet size and activity Of the four home nations, England had the most active vessels in 2017 with 2,300 active fishing vessels (including low activity vessels). English-registered vessels represented nearly half (49%) of all active vessels in the UK ďŹ&#x201A;eet. Scotland had the second largest number of active vessels with 1,713 active vessels (37% of UK active

vessels). Wales and Northern Ireland had a total of 315 and 266 active vessels in 2017 respectively.

Scotland had the largest number of over 10m active vessels in 2017 (564, or 46% of the total number of over 10m active vessels in the UK).

Figure 1a. Number of active fishing vessels by registered home nation of vessels in 2017

UK Fleet Active vessels

England had the most active vessels in 2017.

125

134 124

Under 10m 10m to 24m Over 24m

12

1,175

8

288

Vessel length

439

24 3

76

391

1,833

Economics of the UK Fishing Fleet 2017

Nearly three quarters (74%) of UK active vessels were under 10m in length. Larger vessels, over 10m in length, represented a quarter of the active fishing vessels but half of the total days at sea. This imbalance is because many vessels under 10m have low levels of activity.

Figure 1 shows the composition of the ďŹ&#x201A;eet and days at sea by home nation and size category.

Figure 1b. Days at sea by registered home nation of vessels in 2017

UK Fleet Days at sea

Over 10m vessels represented half of total days at sea.

81,236 74,416 24,100

11,711 16,357

762

7,023 2,824 673

17,554

53,315

91,834

Vessel length Under 10m 10m to 24m Over 24m

13

Economics of the UK Fishing Fleet 2017

Landings Of the four home nations, vessels registered in Scotland landed the highest total weight of fish compared to the rest of the UK in 2017 with nearly 462,000 tonnes.

This figure represents 64% of the total landings of the UK fleet by weight. Vessels registered in England landed nearly 199,000 tonnes, while vessels registered in Northern Ireland and Wales landed just over 43,000 and 10,000 tonnes respectively.

Total fishing income by vessels registered in Scotland was the highest of the four home nations. Vessels registered in Scotland had a total fishing income of nearly ÂŁ561million in 2017, representing 58% of UK fishing income. Vessels registered in England had a fishing income of nearly ÂŁ332million, or 34% of the UK total.

Figure 2a. Weight of landings by registered home nation of vessels in 2017.

UK Fleet Weight of landings

Over 24m vessels generated the largest share of the total weight of landings.

13,475 67,853

380,277

2,970 13,275 26,933

3,068 3,477 4,091

Vessel length Under 10m 10m to 24m Over 24m

14

22,958 53,958 121,532

Economics of the UK Fishing Fleet 2017

In each of the four home nations, over 24m vessels generated the largest share of the total weight of landings in 2017. The proportion of total landings by vessels over 24m varied between 38% of all landings

by Welsh-registered vessels and 82% of all landings by Scottish-registered vessels.

Over 24m vessels generated the largest share of fishing income for vessels registered in England, Scotland and Wales in 2017. Over 24m vessels landed between 51%

and 63% of total fishing income in these three home nations. In Northern Ireland, vessels 10-24m vessels generated the largest share of fishing income, 50% of total fishing income by Northern Ireland-registered vessels.

Figure 2 shows the weight and value of landings by home nation and vessel size.

Figure 2b. Value of landings by registered home nation of fishing vessels in 2017.

UK Fleet Value of landings

Landings from Scottish registered vessels represented 58% of UK fishing income.

45,989

161,108

353,717

4,912 28,665 23,235

5,640 5,560 13,952

53,381 108,079 170,385

Vessel length Under 10m 10m to 24m Over 24m

15

Economics of the UK Fishing Fleet 2017

Employment and GVA Scottish-registered vessels had the highest number of FTEs in 2017 with 4,300 FTEs. This represented half of the total number of FTEs in the UK fishing ďŹ&#x201A;eet. Englishregistered vessels had 3,240 FTEs or 38% of the total number of FTEs.

Northern Irish- and Welsh-registered vessels represented 9% and 2% of total FTEs respectively. The majority of the FTEs across all home nations were on vessels between 10m and 24m in length.

Figure 3a. FTEs by registered home nation of vessels in 2017.

UK Fleet FTEs

The majority of FTEs were on vessels between 10 and 24m in length.

609 1,475

601

94 35

35 68 22

Vessel length Under 10m 10m to 24m Over 24m

16

2,143

708 1,003

1,407

Economics of the UK Fishing Fleet 2017

Scottish-registered vessels had the highest GVA in 2017 at nearly £292million. English-registered vessels had a GVA of £157million, while Northern Irish- and Welshregistered vessels had a GVA of £31million and £12million respectively.

Vessels over 24m contributed the largest share to total GVA in England, Scotland and Wales. In Northern Ireland 10-24m vessels and over 24m vessels represented the same proportion of total GVA (46% each).

Figure 3 shows FTEs and GVA by home nation and vessel size.

Figure 3b. GVA by registered home nation of vessels in 2017.

UK Fleet GVA

Scottish registered vessels had the highest GVA in 2017 at nearly £292 million.

27,027

69,783

195,155

2,522 14,291 14,233

3,620 2,997 5,815

30,956 53,031 73,475

Vessel length Under 10m 10m to 24m Over 24m

17

Economics of the UK Fishing Fleet 2017

Fleet size and activity There were 4,701 active registered vessels in the UK fishing fleet in 2017. This is a 1.5% increase from 2016, when there were 4,637 active vessels in the fleet. In both 2016 and 2017, around a third of the active fleet were classed by Seafish as low activity vessels.

The 32 Seafish-defined fleet segments varied greatly in size. Segments comprising under 10m vessels accounted for 58% of active vessels in 2017 (excluding low activity vessels). The largest segment by a wide margin was the under 10m pots and traps fleet with over 1,150 vessels (38% of active vessels excluding low activity).

Other segments ranged from nine vessels in the North Sea beam trawl over 300kW segment to 235 vessels in the under 10m using hooks segment. Defined Seafish segments do not include vessels classed as “low activity”, which are counted in two separate segments for over 10m and under 10m low activity vessels.

The greatest change in numbers of vessels from 2016 to 2017 occurred in the small scale fleet. The number of under 10m vessels using static gear (pots and hooks) increased by 138 vessels. The number of under 15m scallop dredgers increased by 28. It is possible that the higher prices of shellfish in 2017 encouraged some owners to switch activity, which lead to them being counted in these segments. The number of under 10m demersal trawl vessels and under 10m drift and/or fixed net vessels decreased by 57 in 2017 relative to 2016.

Average days at sea per active vessel in 2017 ranged from 62 days at sea for under 10m vessels using hooks to 251 days at sea for Area VIIB-K trawlers between 24 and 40m. In 2017 average days at sea per vessel decreased for around half of the segments (17), particularly North Sea beam trawlers over 300kW, Area 7B-K trawlers between 24-40m and under 10m vessels.

18

Average fishing income per vessel varied greatly across different fleet segments. There is also variation among vessels within the same fleet segment. Average fishing income per vessel increased in 2016 for most fleet segments compared to 2015, but trends in 2017 were mixed. Twelve segments saw an increase in average fishing income per vessel, while for 16 segments it remained the same or decreased. North Sea beam trawlers over 300kW and longline vessels had a 35% decrease in average fishing income per vessel in 2017; while Area 7A demersal trawlers had a 62% increase.

Changes in fishing income are related to effort, weight of landings, prices, fishing opportunities and abundance or stock size. The increase in average fishing income per vessel for Area 7A demersal trawlers is related to a 58% increase in the TAC of their main stock (Haddock 7A) and an increase in fishing effort (days at sea), which resulted in an increase in weight landed per day at sea (see Table 2). The decrease in fishing income for North Sea beam trawlers over 300kW and longliners is related to a decrease in fishing effort (NS beam trawlers over 300kW) and weight landed per day at sea (NS beam trawlers over 300kW and longliners) (see Table 1 and 2).

During our 2017 survey the availability and cost of quota was an issue often noted as impacting on the financial performance of businesses. A few participants were concerned with the methods of distributing the quota, which they felt led to lost fishing opportunities for some vessels.

19

Economics of the UK Fishing Fleet 2017

Fleet size and activity

Table 1. Fleet size, activity, fishing income (nominal figures) and main stocks, 2016-2017

Segment

Number of vessels

2016

Average days at sea

2017

2016

2017

Area VIIA demersal trawl

15

á

13

â

128

á

144

Area VIIA nephrops over 250kW

32

â

30

â

140

â

137

Area VIIA nephrops under 250kW

42

37

â

136

á

Area VIIBCDEFGHK 24-40m

11

â

13

á

289

Area VIIBCDEFGHK trawlers 10-24m

63

â

61

North Sea beam trawl over 300kW

170

Average fishing income (£’000)

á

2016 á

200

2017 á

276

325

á

294

á

124

â

160

á

158

251

â

1,824

á

1,501

â

251

á

290

á

162

9

â

9

247

á

191

â

2,267

á

1,458

â

North Sea beam trawl under 300kW

22

á

20

â

86

â

104

á

108

á

96

â

North Sea nephrops over 300kW

48

á

55

á

203

á

218

á

591

á

691

á

North Sea nephrops under 300kW

64

á

69

á

136

á

131

190

á

184

NSWOS demersal over 24m

44

43

206

213

1,942

á

2,047

á

NSWOS demersal pair trawl seine

25

25

200

212

á

1,737

á

1,980

á

NSWOS demersal seiners

16

17

181

á

1,123

á

1,393

á

NSWOS demersal under 24m over 300kW

33

â

NSWOS demersal under 24m under 300kW

13

â

South West beamers over 250kW

á

158

37

á

191

19

á

124

23

26

á

209

South West beamers under 250kW

23

22

233

á

UK scallop dredge over 15m

92

89

184

á á

95

â â

UK scallop dredge under 15m

180

â

208

á

112

á

á

200

á

955

á

1,101

á

97

â

304

á

240

â

226

á

833

á

991

á

227

651

á

742

á

176

518

á

498

â

157

á

145

Under 10m demersal trawl/seine

192

174

â

109

95

Under 10m drift and/or fixed nets

223

184

â

83

82

125

â

Under 10m pots and traps Under 10m using hooks

1,086

á

1,156

á

167

95

â â

72

á

78

43

á

43

62

á

60

á

á

235

á

72

â

62

40

36

WOS nephrops over 250kW

51

á

41

â

185

á

185

362

á

344

WOS nephrops under 250kW

82

â

77

â

158

á

151

183

á

171

â

Gill netters

30

598

á

474

â

620

â

Longliners Pots and traps 10-12m

30 á

30

186

187

954

á

175

160

154

141

á

145

92

183

á

192

438

á

495

á á

Miscellaneous

17

á

53

á

Pelagic over 40m

á

19

á

146

á

155

á

2,417

á

2,881

44

â

21

à

24

á

4

â

4

1,659

1,625

25

â

19

â

3

á

3

27

26

69

â

76

á

9,244

á

9,537

Trend: â Indicates a decrease of >5% compared to previous year

Indicates a change in the range of +/-5% compared to previous year á Indicates a increase of >5% compared to previous year

20

â

27 93

Low activity under 10m

159

175

Pots and traps over 12m Low activity over 10m

175

â

Economics of the UK Fishing Fleet 2017

Main stock by % of total annual fishing income

Stock status

Stock dependency % of fleet segment revenues

Fleet significance % of stock landings caught by this fleet

2nd main stock by % of total annual fishing income

Stock status

Stock dependency % of fleet segment revenues

Fleet significance % of stock landings caught by this fleet

2017

2017

2017

2017

2017

2017

2017

2017

Haddock VIIa

31%

63%

Nephrops VII

17%

4%

Nephrops VII

83%

44%

WC Nephrops

5%

2%

Nephrops VII

69%

26% WC Nephrops

12%

3%

Anglers VII

42%

37% Megrim VII

30%

69%

Cuttlefish

34%

23%

11%

42%

19%

55%

2%

0%

14%

16%

9%

3%

Lemon Sole

North Sea Plaice

64%

41% North Sea Sole

Brown Shrimps

98%

79% Scallops

North Sea Nephrops

55%

49% NS Anglers IIa(EC),IV(EC)

North Sea Nephrops

71%

25%

North Sea Cod

14%

29% North Sea Haddock

13%

28%

North Sea Haddock

31%

38%

North Sea Cod

30%

35%

North Sea Haddock

24%

17% North Sea Cod

20%

12%

NS Anglers IIa(EC),IV(EC)

23%

30%

North Sea Cod

16%

16%

Squid

27%

8%

NS Anglers IIa(EC),IV(EC)

14%

2%

Cuttlefish

34%

34% Anglers VII

15%

19%

WC Nephrops

Cuttlefish

32%

20% Sole VIIe

20%

41%

Scallops

88%

58% Queen Scallops

10%

80%

Scallops

71%

32% Cockles

14%

95%

North Sea Nephrops

27%

17%

6%

Sole VIId

18%

53% Pollack VII

12%

28%

Lobsters

39%

61% Crabs (C.P.Mixed Sexes)

24%

31%

Razor Clam

27%

64% Bass

22%

40%

WC Nephrops

79%

31% North Sea Nephrops

7%

3%

WC Nephrops

92%

38%

5%

2%

WS Hake incl VII

27%

24% Anglers VII

24%

22%

WS Hake incl VII

42%

56% NS Hake

37%

47%

Crabs (C.P.Mixed Sexes)

31%

14% Lobsters

30%

17%

Crabs (C.P.Mixed Sexes)

67%

52% Whelks

16%

32%

Cod IIb Spitzbergen

27%

99% Patagonian squid

21%

100%

8%

WC Nephrops

North Sea Nephrops

Crabs (C.P.Mixed Sexes)

65%

0%

Lobsters

32%

4% Bass

Lobsters

WC Mackerel

40%

97% Mackerel IVa (flex box)

18%

0%

13%

18%

37%

98%

Stock status (ICES advice): Unknown

Above MSY Btrigger Below MSY Btrigger

Not assessed by ICES

21

Economics of the UK Fishing Fleet 2017

Fleet landings UK vessels landed 719,000 tonnes of fish and shellfish in 2017. This figure represents a 3% increase from 2016, when landings were 699,000 tonnes. Pelagic species represent just over half of the total weight of landings by UK vessels (54% in 2017).

Total fishing income of UK vessels was £984million in 2017, a 2% increase from 2016. This was largely due to an increase in the value of shellfish landings, even though weight of shellfish landings decreased slightly in 2017. Both demersal and pelagic species represented approximately 37% of total fishing income each in 2017.

Figure 4. Weight and value of landings by the UK fishing fleet in the UK and abroad by species type, 2009-2017

800 700

Thousand tonnes

600 500 400 300 200 100 0

2009

2010

2011 ¢

2012

Demersal

2013 ¢

2014

Pelagic

2015 ¢

2016

2017

2016

2017

Shellfish

1200

Million pounds (nominal)

1000

800

600

400

200

0

2009

2010

2011 ¢

22

Demersal

2012

2013 ¢

Pelagic

2014

2015 ¢

Shellfish

Economics of the UK Fishing Fleet 2017

Fish prices Shellfish and demersal species are the most valuable species, reaching average prices approximately three times higher than pelagic species.

Average nominal (not adjusted for inflation) prices of shellfish species increased between 2015 and 2017.

In 2017 the average first sale price of shellfish species increased by 14% compared to 2016 reaching £2,540

per tonne. The average price of demersal species has increased from 2013. In 2017 it was £1,966 per tonne, a 2% increase from 2016. The average price of pelagic species peaked in 2011 at £885, and was £651 in 2017 (an 8% decrease from 2016).

Figure 5. Average price of landings in the UK and abroad by species type, 2009-2017 (not adjusted for inflation)

3000

2500

£ / tonne

2000

1500

1000

500

0

2009

2010

2011 ¢

Demersal

2012

2013 ¢

Pelagic

2014

2015 ¢

2016

2017

Shellfish

23

Economics of the UK Fishing Fleet 2017

Fishing efficiency Fishing efficiency refers to the average weight and value of landings and average fishing costs per vessel per day spent at sea.

Weight of landings per day at sea varied significantly depending on the vessel’s carrying capacity and type of fishing. On average, under 10m vessels using hooks landed around 0.2 tonnes per day at sea in 2017, while NSWoS demersal vessels over 24m landed an average of 5.2 tonnes per day at sea.

Weight of landings per day at sea decreased in 2017 by an average of 2% across the whole fleet compared to 2016. Landings per day at sea increased in just seven segments in 2017 with a wide range of variation between fleet segments. Weight of landings per day at sea for North Sea beam trawlers under 300kW declined by 47% while for Area 7A beam trawlers it increased by 39%.

Area 7A beam trawlers benefitted in 2017 from a quota increase and a higher number of days at sea, see Table 1.

Average fishing income per vessel per day at sea increased for all segments in 2016. This was a result of the higher average prices for all species types in 2016, as seen in Figure 5. Prices increased again in 2017, but not to the same extent. Overall, in 2017, average fishing income per day increased by 5% and most fleet segments saw their average fishing income per day at sea increase or remain the same as in 2016.

24

The average price of shellfish species increased by 14% (in nominal terms) in 2017, see Figure 5. Segments more reliant on shellfish species for income saw the higher annual increases in fishing income per day: Area 7B-K trawlers 10-24m (heavily reliant on cuttlefish), South West beamers (cuttlefish) or under 10m pots and traps (lobsters). By contrast, the average income per day at sea for gill netters, longline vessels and North Sea beam trawlers decreased by between 13% and 36%.

Fishing expenditure per day at sea also varied greatly between segments. Under 10m vessels using drift and/or fixed nets had the lowest average expenditure estimated at £269 per day at sea in 2017, while NS beam trawlers over 300kW had the highest, at £7,025 per day at sea.

Trends in fishing expenditure per day at sea largely mirror trends in fishing income per day. In 2017 fishing expenditure per day at sea increased on average by 6% across all segments.

Economics of the UK Fishing Fleet 2017

Table 2. Landings per day at sea, fishing income and expenditure per day at sea (nominal figures), 2016-2017

Segment

Landings per day (tonnes) 2016

Fishing income per day (£)

2017

2016

Fishing expenditure per day (£)

2017

2016

Area VIIA demersal trawl

0.78

á

1.08

â

1,561

á

2,262

Area VIIA nephrops over 250kW

0.93

â

0.96

â

1,970

â

2,147

Area VIIA nephrops under 250kW

0.57

0.62

â

1,171

á

1,277

â

626

á

696

á

6,311

5,987

â

3,338

á

4,465

â

778

á

944

á

â

6,933

á

7,025

â

á

641

2017 á

1,090

1,087

á

1,217

á

Area VIIBCDEFGHK 24-40m

1.99

â

1.99

Area VIIBCDEFGHK trawlers 10-24m

0.90

â

0.85

1,476

á

1,788

North Sea beam trawl over 300kW

4.86

â

4.18

9,196

á

7,618

North Sea beam trawl under 300kW

0.43

á

0.23

â

1,255

â

924

á

1,092

á

882

â

North Sea nephrops over 300kW

1.12

á

1.21

á

2,906

á

3,163

á

1,956

á

2,179

á

North Sea nephrops under 300kW

0.54

á

0.52

á

1,399

á

1,407

950

á

980

NSWOS demersal over 24m

5.48

5.15

9,411

9,630

6,353

á

6,633

á

NSWOS demersal pair trawl seine

5.44

5.20

8,691

9,338

á

5,849

á

6,333

á

NSWOS demersal seiners

4.57

4.60

á

7,107

7,676

á

4,560

á

4,980

á

NSWOS demersal under 24m over 300kW

2.41

â

2.44

á

5,008

5,494

á

3,352

á

3,747

á

NSWOS demersal under 24m under 300kW

1.05

â

0.88

á

2,444

2,468

â

1,507

á

1,541

â

WOS nephrops over 250kW

0.92

0.83

á

1,957

1,863

á

1,184

á

1,168

á

WOS nephrops under 250kW

0.45

0.43

659

á

668

á â

South West beamers over 250kW

1.35

South West beamers under 250kW

0.90

1.32

UK scallop dredge over 15m

1.57

UK scallop dredge under 15m

0.80

Under 10m demersal trawl/seine

0.27

á

Under 10m drift and/or fixed nets

0.22

Under 10m pots and traps Under 10m using hooks Gill netters

1.53

á

á

1,156

á

1,135

3,985

á

4,391

2,416

á

2,734

0.91

á

2,790

á

3,265

â

1,571

á

1,862

1.30

â

2,816

2,833

â

1,560

á

1,618

0.84

â

1,395

821

á

915

0.31

á

659

â

826

â

324

á

405

á

0.19

á

515

â

521

â

262

0.20

á

0.24

â

497

á

637

265

á

338

0.18

â

0.19

â

553

á

578

277

á

289

â

1,963

á

1,751

â

2,195

â

â

1.66

1,533

3,415

2,984

â

269

Longliners

1.93

á

1.56

5,144

3,316

3,079

Pots and traps 10-12m

0.41

á

0.40

880

943

469

á

508

Pots and traps over 12m

1.46

1.39

2,389

2,580

1,367

á

1,495

á

á

á

â

á

Trend: â Indicates a decrease of >5% compared to previous year

Indicates a change in the range of +/-5% compared to previous year á Indicates a increase of >5% compared to previous year

25

Economics of the UK Fishing Fleet 2017

Annual operating costs Definitions Fishing vessels incur a range of operating costs which are split into two groups: fishing costs and vessel costs.

Fishing costs vary depending on the amount of vessel activity and the value and weight of landings. Fishing costs cover several elements, of which crew share (wages), and fuel and oil are the most significant. Other items listed under fishing costs include boxes, ice, food and stores, sales commissions, harbour dues, subscriptions and levies, shore labour, travel costs and quota leasing.

Vessel costs are independent of, or not directly related to, the level of vessel activity during the year. These vessel costs include gear and vessel repairs, insurance, administration and the purchase, hire and maintenance of electronic equipment.

Operating costs Average annual operating costs per vessel vary widely between fleet segments depending on vessel size and level of activity among other factors. Average annual operating costs in 2017 ranged from approximately ÂŁ23,700 for under 10m vessels using hooks to ÂŁ1.8million for NSWoS demersal vessels over 24m. In 2017 average annual operating costs per vessel increased or remained stable for all segments but six, compared to 2016, see Table 3.

Operating costs represented a higher percentage of total income in 2017 than in 2016. In 2017 operating costs represented on average 81% of total income across all segments. This higher percentage was a result of a less pronounced increase in fishing income and an increase in average fishing expenditure as seen in Table 2. In 2016 operating costs represented on average 78% of total income across all segments. This percentage was a decrease from the previous year, thanks to the increase in fishing income across the majority of segments seen in Table 1.

Two segments, North Sea beam trawlers under and over 300kW, made a loss in 2017 as their operating costs were 106% of total income.

Fuel is a significant part of operating costs. Fuel costs expressed as a percentage of total income1 increased in 2017 across nearly all segments. Across the whole UK fleet, fuel costs represented 12% of total income in 2016 but 15% in 2017. The increase in fuel costs as a percentage of income was particularly high for North Sea beam trawlers with engine power over and under 300kW, with increases of 12 and 17 percentage points respectively. These two segments also experienced a decline in average fishing income per vessel.

In responses to the annual fleet economic survey, vessel owners highlighted fluctuations in the price of fuel as one of the factors that made forward planning difficult for them. Vessel owners also mentioned the costs of purchasing quota and of vessel maintenance as important costs.

1. Total income is the sum of fishing income and non-fishing income. Non-fishing income can include fees for guard duties of oil facilities, use of vessel for research operations, etc.

26

Economics of the UK Fishing Fleet 2017

Table 3. Average annual operating costs, 2016-2017 (nominal figures)

Segment

Average annual operating costs (£) 2016

Operating costs as % of income

2017

2016

Fuel costs as % of income

2017

2016

2017

Area VIIA demersal trawl

151,150

á

255,127

á

75%

79%

14%

â

14%

á

Area VIIA nephrops over 250kW

193,688

â

210,747

á

70%

71%

13%

â

16%

á

Area VIIA nephrops under 250kW

123,794

á

124,362

78%

79%

10%

â

11%

á

1,222,277

â

Area VIIBCDEFGHK 24-40m Area VIIBCDEFGHK trawlers 10-24m North Sea beam trawl over 300kW

â

1,437,784

á

67%

â

96%

170,859

197,738

á

67%

â

67%

2,023,387

1,549,901

â

89%

â

106%

99%

106%

86%

88%

North Sea beam trawl under 300kW

118,831

á

113,729

North Sea nephrops over 300kW

542,447

á

645,391

North Sea nephrops under 300kW

170,719

á

168,490

NSWOS demersal over 24m

1,661,627

á

1,778,991

NSWOS demersal pair trawl seine

1,442,031

á

1,654,635

NSWOS demersal seiners

938,232

á

1,173,830

NSWOS demersal under 24m over 300kW

813,754

á

NSWOS demersal under 24m under 300kW

255,953

WOS nephrops over 250kW

299,977

WOS nephrops under 250kW

á

13%

â

16%

á

10%

â

10%

á

á

24%

â

35%

á

á

27%

â

44%

á

18%

â

20%

á

á

84%

â

86%

17%

â

20%

á

á

82%

â

83%

13%

â

16%

á

á

77%

â

78%

6%

â

7%

á

á

78%

79%

6%

7%

á

951,566

á

82%

83%

12%

14%

á

á

203,826

â

84%

85%

10%

â

11%

á

á

292,989

81%

83%

13%

â

17%

á

151,042

á

144,447

80%

81%

11%

â

14%

á

â

843,300

á

84%

â

85%

22%

25%

á

568,911

á

76%

â

77%

14%

â

15%

á

88%

á

90%

13%

â

16%

á á

South West beamers over 250kW

695,335

South West beamers under 250kW

494,320

UK scallop dredge over 15m

455,393

UK scallop dredge under 15m

á

446,622

â

134,467

á

125,750

â

82%

á

83%

12%

â

14%

Under 10m demersal trawl/seine

52,100

á

56,857

á

71%

â

71%

10%

â

10%

Under 10m drift and/or fixed nets

29,931

69%

â

70%

7%

â

8%

Under 10m pots and traps

45,025

69%

â

69%

9%

â

9%

Under 10m using hooks

25,398

64%

5%

â

5%

81%

5%

â

7%

á

Gill netters

475,222

Longliners

674,635

Pots and traps 10-12m Pots and traps over 12m

30,336 á

á

43,706 23,174

â

64%

382,197

â

80%

477,684

â

97,383

á

101,304

348,146

á

396,898

á

á

71%

77%

17%

á

67%

67%

6%

â

6%

á

78%

78%

9%

â

10%

á

á

9%

á

Trend: â Indicates a decrease of >5% compared to previous year

Indicates a change in the range of +/-5% compared to previous year á Indicates a increase of >5% compared to previous year

27

Economics of the UK Fishing Fleet 2017

Annual operating costs

Fuel The prices of Brent crude oil and marine diesel have varied substantially over the last 10 years, as seen in Figure 6.

The price of Brent crude oil decreased between late 2013 and early 2016, when it fell to $26 per barrel (a 76% decrease).

This large drop led to the price of marine diesel halving in the same period, falling to 26p per litre in January 2016. The price of Brent crude increased again in mid to late 2016 and 2017 reaching $67 by December 2017.

The price of marine diesel subsequently increased in the same period to 45p per litre.

The fuel costs of the UK fishing fleet reflected the development in Brent crude prices. Total fuel expenditure of the fleet as estimated by Seafish increased by 26% from £95million in 2016 to £119million in 2017. Annual average fuel costs per day at sea increased by 18% across all segments in 2017 compared to 2016.

The average amount of fuel consumed per vessel varied greatly between segments due to their different characteristics and activities. Fuel consumption in 2017 ranged from 75 litres per day for under 10m vessels using hooks to 6,500 litres per day at sea for North Sea beam trawlers over 300kW.

Figure 6: Oil price and marine fuel price (source: Seafish, U.S. Energy Information Administration) 160 140

60

120 50

$ per barrel

100 80

40

60

30

40 20

20 0

2006

0 2007

2008

2009 ¢

28

2010

2011

Crude oil – Brent

2012 ¢

2013

2014

Seafish UK Average

2015

2016

2017

Seafish UK average (pence per litre)

70

Economics of the UK Fishing Fleet 2017

Table 4. Average annual and daily fuel costs per vessel (nominal figures), 2016-2017

Segment

Average annual fuel costs (£) 2016

Average fuel cost per day at sea (£)

2017

2016

Litres per day

2017

2016

2017

Area VIIA demersal trawl

27,006

á

45,911

á

210

320

á

629

Area VIIA nephrops over 250kW

36,776

â

46,239

á

263

â

337

á

798

817

Area VIIA nephrops under 250kW

15,302

17,904

á

112

â

145

á

337

351

969

á

2,439

2,328

187

á

450

449

2,701

á

6,500

6,500

Area VIIBCDEFGHK 24-40m Area VIIBCDEFGHK trawlers 10-24m North Sea beam trawl over 300kW North Sea beam trawl under 300kW

236,137 25,778

242,947 á

537,577

30,298

817 á

517,024

152

â

2,180

á

769

32,497

â

46,964

á

377

451

á

1,067

â

1,065

North Sea nephrops over 300kW

110,314

á

148,391

á

543

680

á

1,609

á

1,635

North Sea nephrops under 300kW

34,848

á

39,584

á

257

303

á

761

727

NSWOS demersal over 24m

271,109

336,737

á

1,314

1,584

á

3,897

3,805

NSWOS demersal pair trawl seine

104,266

137,389

á

522

648

á

1,542

1,557

111,109

á

479

612

á

1,425

1,468

165,419

á

641

â

826

á

1,916

1,984

â

NSWOS demersal seiners NSWOS demersal under 24m over 300kW

75,656

á

122,305

NSWOS demersal under 24m under 300kW

29,013

26,139

â

233

269

á

689

649

WOS nephrops over 250kW

48,504

59,569

á

262

322

á

781

778

WOS nephrops under 250kW

21,594

25,560

á

137

170

á

407

410

South West beamers over 250kW

á

183,176

246,080

á

876

1,091

á

2,617

2,619

South West beamers under 250kW

88,937

110,067

á

381

â

484

á

1,132

1,159

UK scallop dredge over 15m

66,482

78,582

á

361

â

447

á

1,073

1,074

UK scallop dredge under 15m

20,227

180

219

á

533

527

Under 10m demersal trawl/seine

7,194

7,756

á

66

82

á

197

197

Under 10m drift and/or fixed nets

3,026

3,525

á

36

43

á

107

103

Under 10m pots and traps

5,864

â

5,487

â

47

58

á

139

Under 10m using hooks

2,135

â

1,936

â

30

â

31

Gill netters

30,218

â

33,931

á

173

â

214

Longliners

82,858

104,312

á

447

8,152

9,635

á

51

39,683

51,146

á

216

Pots and traps 10-12m Pots and traps over 12m

á

20,750

87

á

â

140 â

75

á

520

514

558

á

1,309

1,341

63

á

151

151

267

á

638

642

â

Trend: â Indicates a decrease of >5% compared to previous year

Indicates a change in the range of +/-5% compared to previous year á Indicates a increase of >5% compared to previous year

29

Economics of the UK Fishing Fleet 2017

Annual operating costs

Employment and crew costs An estimated 11,757 people were employed on board vessels in the UK fishing fleet in 2016. Of these, 2,361 were engaged in the low activity segments. Another 3,101 people worked in the fully active under 10m segments, the majority of these (2,025) in the under 10m pots and traps segment.

In 2017 the UK fishing fleet had a total estimated 8,851 FTEs on board vessels. The number of FTEs per fleet segment varied depending on vessel size and vessel numbers. The segment with the most FTE jobs was the UK under 10m pots and traps segment, which had 929 FTEs spread across 1,156 vessels in 2017. This means less than one full time equivalent job per vessel, reflecting the fact that many of these small vessels do not operate at sea all year round. The average effort of vessels in this fleet segment in 2017 was 95 days at sea. As an example of jobs on larger vessels with similar effort, the NSWoS demersal trawlers under 24m under 300kW segment generated 45 FTEs across 19 vessels.

There was a wide range of fleet segment change in FTEs from 2016 to 2017. Roughly half of fleet segments increased the number of FTEs and half had fewer FTEs. The greatest change occurred in the NSWoS demersal seine trawl segment, which saw a 38% increase in FTEs from 2016 to 2017. The North Sea beam trawl over 300kW segment, on the other hand, had 24% fewer FTEs (from 230 in 2016 to 175 in 2017). FTEs in under 10m vessels decreased on average by 18%. These changes from one year to the next can arise if there is a difference in estimated number of hours worked, and do not necessarily imply that jobs were created or lost. For example, days at sea in under 10m vessels decreased by 13% on average from 2016 to 2017, which could explain the decrease in FTEs.

30

Crew share is strongly linked with fishing income as many fishermen are paid a share of the value landed.

Crew costs (i.e., the total expenditure in crew, including crew shares, salaries and agency payments of all crew) across segments therefore reflect the variability in fishing income. Crew costs increased across most segments in 2016 as fishing income increased that year. Crew costs increased again in 2017 albeit in a smaller magnitude (4% on average). Segments that experienced significant increases in fishing income in 2017 saw corresponding increases in crew costs (area 7A demersal trawlers increased their average crew costs by 251% in 2017).

On the other hand, segments for which fishing income decreased in 2017 (longliners, gillnetters, North Sea beam trawlers) saw their crew costs decrease as well.

Employment is typically a main topic of discussion during the interview stage of the survey, with many participants concerned about the lack of young people entering the industry. From 2018, Seafish is carrying out surveys of employment in the UK fishing fleet with results published annually.

Economics of the UK Fishing Fleet 2017

Table 5. Average annual crew costs (nominal figures) and FTEs, 2016-2017

Segment

Average crew cost per vessel (£) 2016

2017

FTE (total) 2016

Crew cost per FTE (£)

2017

2016

2017

Area VIIA demersal trawl

21,801

â

76,485

63

á

71

á

5,162

â

14,095

á

Area VIIA nephrops over 250kW

89,020

á

92,060

214

â

198

â

13,336

á

13,952

á

Area VIIA nephrops under 250kW

50,010

á

48,480

189

á

153

â

11,112

á

11,736

á

293,353

â

339,381

á

162

â

150

â

19,917

â

29,386

á

52,914

á

60,967

á

224

á

201

â

14,886

â

18,513

á

627,072

á

276,548

â

230

175

â

24,571

á

14,214

Area VIIBCDEFGHK 24-40m Area VIIBCDEFGHK trawlers 10-24m North Sea beam trawl over 300kW North Sea beam trawl under 300kW

á

17,248

á

5,350

â

50

á

56

á

7,664

á

1,927

145,584

á

161,912

á

393

á

493

á

17,772

â

18,060

48,103

á

43,969

â

183

á

184

16,833

á

16,453

NSWOS demersal over 24m

517,966

á

522,796

643

á

649

35,425

á

34,625

NSWOS demersal pair trawl seine

451,561

á

506,718

á

322

á

358

á

35,011

á

35,426

NSWOS demersal seiners

299,224

á

363,848

á

91

â

126

á

52,517

á

49,276

NSWOS demersal under 24m over 300kW

241,340

á

267,488

á

243

â

306

á

32,774

á

32,371

â

North Sea nephrops over 300kW North Sea nephrops under 300kW

NSWOS demersal under 24m under 300kW WOS nephrops over 250kW WOS nephrops under 250kW

79,579

á

61,451

â

42

114,485

á

103,019

â

320

57,278

á

51,347

â

310

â

â

45

á

24,618

á

26,009

á

253

â

18,264

á

16,685

â

278

â

15,157

á

14,202

â

á

36,535

á

38,510

á

36,794

á

41,510

á

24,430

á

23,800

South West beamers over 250kW

246,312

á

280,949

á

155

á

190

South West beamers under 250kW

178,539

á

200,215

á

112

â

106

UK scallop dredge over 15m

161,460

á

149,275

â

608

UK scallop dredge under 15m

38,461

á

34,849

â

462

á

440

14,988

â

16,461

á

Under 10m demersal trawl/seine

14,941

16,357

á

348

á

278

â

8,253

â

10,232

á

Under 10m drift and/or fixed nets

12,383

á

12,242

164

á

133

â

16,873

Under 10m pots and traps

17,649

á

17,271

Under 10m using hooks

7,409

Gill netters

191,768

á

Longliners

108,416

â

Pots and traps 10-12m Pots and traps over 12m

35,190 135,216

â

16,951

1,123

á

929

â

17,075

á

21,488

á

6,766

â

81

â

86

á

15,361

á

18,535

á

147,635

â

349

304

â

16,492

á

14,591

â

59,310

â

309

á

10,341

5,752

â

14,109

14,830

á

19,542

á

35,894 á

558

150,074

á

283 436

á

424

673

á

707

á

18,680

â

Trend: â Indicates a decrease of >5% compared to previous year

Indicates a change in the range of +/-5% compared to previous year á Indicates a increase of >5% compared to previous year

31

Economics of the UK Fishing Fleet 2017

Economic performance of the fleet Gross Value Added (GVA) Average GVA per vessel increased among most fleet segments in 2016, reflecting the low fuel prices and higher fish prices experienced that year. GVA per vessel in 2017 then decreased on average by 7% across all segments. This change is primarily due to the increase in fuel costs and the smaller increase in fishing income that occurred in 2017.

Average GVA per vessel varied between -£1,323 for North Sea beam trawlers under 300kW to around £982,000 for North Sea and West of Scotland demersal pair trawl seiners in 2017.

Average GVA expressed as a percentage of total income decreased from 47% in 2016 to 43% in 2017.

32

GVA per FTE is a measure of labour productivity, an indicator of how efficiently labour is used in the production process. GVA per FTE in 2017 ranged from -£476 per FTE for North Sea beam trawlers under 300kW to £93,000 per FTE for North Sea and West of Scotland demersal seiners.

Overall, estimates of GVA per FTE for the entire fleet decreased by 4% from 2016 to 2017.

Economics of the UK Fishing Fleet 2017

Table 6. Average annual GVA per vessel and GVA per FTE (nominal figures), 2016-2017

Segment

Gross value added (£) 2016

Area VIIA demersal trawl

GVA as % of total income

2017

2016

2017

GVA per FTE (£ per FTE) 2016

2017

71,007

á

146,064

35%

â

45%

16,812

â

26,917

172,650

á

177,240

62%

á

60%

25,865

á

26,860

85,756

á

82,285

54%

á

52%

19,055

á

19,919

Area VIIBCDEFGHK 24-40m

900,001

á

407,172

â

49%

á

27%

Area VIIBCDEFGHK trawlers 10-24m

136,279

á

156,914

á

54%

á

53%

North Sea beam trawl over 300kW

871,459

á

185,510

â

38%

á

13%

â

Area VIIA nephrops over 250kW Area VIIA nephrops under 250kW

North Sea beam trawl under 300kW

á

á

â

á

á

61,104

á

35,256

â

38,340

á

47,649

á

34,147

á

9,534

â â

18,845

á

-1,323

â

16%

á

-1%

â

8,374

á

-476

232,072

á

251,993

á

37%

á

34%

â

28,329

á

28,107

79,809

á

71,376

â

39%

á

36%

â

27,928

á

26,708

NSWOS demersal over 24m

880,583

á

876,864

44%

á

41%

â

60,226

á

58,075

NSWOS demersal pair trawl seine

877,328

á

981,912

á

47%

á

46%

68,023

á

68,648

NSWOS demersal seiners

565,175

á

683,881

á

47%

á

46%

99,194

á

92,618

NSWOS demersal under 24m over 300kW

422,833

á

462,742

á

43%

á

40%

57,420

á

56,000

NSWOS demersal under 24m under 300kW

128,875

á

98,401

â

42%

á

41%

39,868

á

41,648

WOS nephrops over 250kW

183,465

á

161,244

â

50%

á

46%

â

29,268

á

26,115

â

96,189

á

84,666

â

51%

á

48%

â

25,454

á

23,418

â

â

56,928

á

58,726

69,107

á

77,467

á

32,158

â

North Sea nephrops over 300kW North Sea nephrops under 300kW

WOS nephrops under 250kW South West beamers over 250kW

383,795

á

428,428

á

46%

á

43%

South West beamers under 250kW

335,333

á

373,651

á

52%

á

50%

UK scallop dredge over 15m

224,924

201,696

â

43%

â

40%

â

34,033

â

UK scallop dredge under 15m

67,136

á

60,125

â

41%

40%

26,163

á

28,401

á

Under 10m demersal trawl/seine

36,575

á

40,072

á

50%

á

50%

20,203

á

25,068

á

Under 10m drift and/or fixed nets

25,981

á

25,578

60%

á

59%

35,403

á

35,417

Under 10m pots and traps

38,124

á

37,347

58%

á

59%

36,884

á

46,467

á

Under 10m using hooks

21,896

á

20,000

â

55%

á

55%

45,398

á

54,786

á

Gill netters

314,297

â

239,016

â

53%

â

51%

27,029

â

23,623

â

Longliners

390,619

203,328

â

37,260

á

â

57%

33,567

51%

32,638

Pots and traps 10-12m Pots and traps over 12m

83,721

á

85,188

236,249

á

260,512

41% 57%

á

53%

33%

â

â

19,718

â

35,197

á

33,923

Trend: â Indicates a decrease of >5% compared to previous year

Indicates a change in the range of +/-5% compared to previous year á Indicates a increase of >5% compared to previous year

33

Economics of the UK Fishing Fleet 2017

Economic performance of the fleet

Profit The total operating profit2 of the UK fleet decreased by 4%, from ÂŁ265million in 2016 to ÂŁ254million in 2017. This decrease reflects the increase in operating costs as a proportion of income in 2017, due to higher fuel costs not completely compensated by a higher fishing income.

The majority of segments had a lower or similar average operating profit per vessel in 2017 than in 2016. Two segments (North Sea beam trawlers over and under 300kW) made a loss in 2017, with negative operating profits. These segments experienced significant declines in landings per day at sea in 2017 (Table 2), with subsequent declines in fishing income. Some individual vessels within other segments may also have made a loss, even if the overall segment has made a profit on average.

Attitudes of skippers and vessel owners toward business success in the future were strongly influenced by the current performance of their business. Business owners who had experienced a strong performance in recent years were generally optimistic, whereas owners who had struggled in recent years tended to be more pessimistic.

There is continued uncertainty about regulation and political developments, combined with issues around quota availability and affordability, market prices, fish abundance, crew recruitment and the weather. In general terms, younger skippers and owners tended to be more optimistic about the future.

Across the fleet, operating profit margins (operating profit as percent of total income) decreased from an average 22% in 2016 to 19% in 2017, see Table 7.

Net profit is an estimate of profit remaining after deducing cost of finance from operating profit. Net profit is the amount that would be subject to taxation and profits after tax would be the amount that could be retained by the company and / or distributed as dividends to shareholders in the company. For smaller businesses that operate as sole traders, ownerâ&#x20AC;&#x2122;s drawings often reflect a combination of wages for their labour and return on their capital invested in the business, with no formal difference between these two returns noted.

2. Operating profit is calculated as total income minus total operating costs.

34

Economics of the UK Fishing Fleet 2017

Table 7. Average annual operating profit per vessel and net profit margin (nominal figures), 2016-2017

Segment

Operating profit (£) 2016

Operating profit margin

2017

2016

2017

Net profit margin 2016

Area VIIA demersal trawl

49,207

á

69,579

25%

á

21%

â

19%

á

Area VIIA nephrops over 250kW

83,630

á

85,180

30%

á

29%

â

26%

á

Area VIIA nephrops under 250kW

35,745

á

33,805

22%

á

21%

â

17%

â

606,648

á

67,792

â

33%

á

5%

â

32%

á

83,366

á

95,947

á

33%

á

33%

â

30%

á

244,388

á

-91,039

â

11%

á

-6%

â

4%

á

â

Area VIIBCDEFGHK 24-40m Area VIIBCDEFGHK trawlers 10-24m North Sea beam trawl over 300kW North Sea beam trawl under 300kW

1,598

á

-6,673

North Sea nephrops over 300kW

86,488

á

90,081

North Sea nephrops under 300kW

31,706

á

27,407

NSWOS demersal over 24m

362,617

á

NSWOS demersal pair trawl seine

425,767

NSWOS demersal seiners

265,951

NSWOS demersal under 24m over 300kW

á

1%

á

-6%

â

-1%

á

14%

á

12%

â

8%

á

â

16%

á

14%

â

11%

á

354,068

18%

á

17%

â

15%

á

á

475,194

á

23%

á

22%

â

21%

á

á

320,033

á

22%

á

21%

â

18%

á

181,493

á

195,254

á

18%

á

17%

â

15%

á

NSWOS demersal under 24m under 300kW

49,296

á

36,950

â

16%

á

15%

â

12%

á

WOS nephrops over 250kW

68,980

á

58,225

â

19%

á

17%

â

13%

á

WOS nephrops under 250kW

38,911

á

33,320

â

21%

á

19%

â

15%

á

South West beamers over 250kW

137,483

á

147,480

á

17%

á

15%

â

13%

á

South West beamers under 250kW

156,793

á

173,437

á

24%

á

23%

â

18%

á

63,464

â

52,421

â

12%

â

11%

â

6%

â

UK scallop dredge over 15m UK scallop dredge under 15m

28,674

á

25,276

â

18%

â

17%

â

9%

â

Under 10m demersal trawl/seine

21,634

á

23,715

á

29%

á

29%

á

24%

á

Under 10m drift and/or fixed nets

13,598

á

13,336

31%

á

31%

â

22%

á

Under 10m pots and traps

20,475

á

20,077

31%

á

32%

á

Under 10m using hooks

14,488

á

13,234

â

36%

á

36%

Gill netters

122,530

â

91,381

â

21%

â

19%

â

Longliners

282,203

144,018

â

Pots and traps 10-12m Pots and traps over 12m

48,532

á

49,294

101,033

á

110,439

á

27%

á

33%

á

11%

â

30%

á

23%

â

28%

á

33%

â

33%

â

29%

á

23%

á

22%

â

18%

á

Trend: â Indicates a decrease of >5% compared to previous year

Indicates a change in the range of +/-5% compared to previous year á Indicates a increase of >5% compared to previous year

35

Economics of the UK Fishing Fleet 2017

Methods

The collection of economic data on the UK fishing fleet is a staged process involving government administrations, vessel owners, accountancy firms and Seafish field researchers, data analysts and economists.

Government administrations data collection Government administrations gather data on vessel numbers and characteristics, catch, landings, sales, gear type and fishing effort (days at sea). This information is transmitted to a central UK database which keeps logbook, sales note and fleet register data.

Field research Every year Seafish researchers visit ports around the UK, interviewing fishing business owners about their fishing businesses and obtaining their permission to get copies of their financial data. Although we have fishing income data for every UK vessel, we also gather a sample of other financial data for each fleet segment.

To ensure an adequate sample size for other financial data we use a self-selecting stratified sampling approach, i.e., we interview a sufficient number of vessel owners from each segment who choose to participate in the survey when our researchers visit the ports. During this stage, researchers collect data on employment, fuel use and capital value indicators as well as the contact details of vessel ownersâ&#x20AC;&#x2122; accountancy firms. In addition, researchers gather qualitative data on matters relating to fishing businesses.

We collect financial data from accountants and owners after the interview phase, with the objective of gathering a large sample of vessel accounts. In late 2017 and early 2018, Seafish Economics collected 528 sets of 2016 financial accounts (11% of the active UK fleet). It is not possible to collect an adequate sample for 2016 any earlier than this because vessel owners do not finish their annual accounts until around 10 months after the end of year being reported.

36

Fleet segmentation The Seafish economic database includes all vessels recorded in the UK fishing fleet register that are active during the year considered. This includes all vessel types, gear types and activity levels. Therefore, we define groups or fleet segments of relatively similar vessels so we can provide information on the operational and financial performance of groups of comparable vessels.

Each fleet segment has a set of mutually exclusive criteria that define which vessels are included in it for each year. Every single active vessel will fit into only one segment each year. Criteria are based on the physical characteristics of the vessels, activity level, the gear used, species targeted and areas fished. For this report we have defined 32 Seafish segments to categorise the UK fleet as shown in the Segmentation Criteria table. Some segments have a large number of vessels, such as the under 10m pots and traps segment (approximately 1,150 vessels), while others have very few, such as North Sea beam trawl over 300kW (9 vessels in 2017). Individual vessels may be included in different segments in different years depending on their activity and gear use. Segments must contain at least five vessels so that reliable data can be collected, robust estimates of costs and profits can be produced, and confidentiality is protected. If fewer than five vessels fit into one segment in a given year, they are instead included in the â&#x20AC;&#x2DC;Miscellaneousâ&#x20AC;&#x2122; fleet segment.

Costs and earnings estimation Declared fishing income is available from the government data set for every active vessel in the fleet, so fishing income is the most reliable financial figure we produce.

We allocate costs structure and non-fishing income data from the sampled vessel accounts to particular fleet segments. We then extrapolate costs and nonfishing income to all vessels in the segment using official statistics on effort and fishing income covering every vessel in the fleet.

Economics of the UK Fishing Fleet 2017

Within each fleet segment we add together the individual costs items from the collected vessel financial accounts (the segment sample) to create a ‘combined segment sample cost structure’.

We then calculate, for all vessels in a segment, the sum of each cost item in the ‘combined segment sample cost structure’ as a proportion of the sum of fishing income.

For example: a) The sum of gear costs is 10% of the sum of fishing income for this group of vessels; b) The sum of sales commission is 3% of the sum of fishing income, etc.

Fuel costs and crew share costs are calculated differently from other costs. To calculate fuel costs, we use the vessel capacity (VCUs) and days at sea for the year of each vessel to estimate its fuel consumption in litres, which is then multiplied by the average annual red diesel price (excluding duty) to estimate total annual fuel cost for each vessel. To calculate crew share costs, we use a system similar to how crew share is estimated in practice, where fishing costs are deducted from fishing income and then the remainder is split between the crew and the vessel business. We allocate a minimum of £100 per day in instances where the actual observed amount within the ‘combined segment sample cost structure’ is lower, in order to reflect the market value of the labour.

Employment data The estimation of employment is based on the survey data collected from vessel owners during the first stage of data collection, combined with MMO employment data. This process provides details of the number of engaged crew, both full-time and part-time. With this sample information we then estimate total engaged crew based on the physical characteristics of each individual vessel and the vessel’s level of activity. Once the total engaged crew is estimated for all types of vessel in the UK fleet, we estimate Full Time Equivalent (FTE) jobs based on hours worked by crew as reported by skippers (one full time job is assumed to be 2,000 hours worked a year).

2017 estimates Figures presented for the years 2008-2016 are estimates based on Government data and data collected by Seafish. Figures for 2017 are estimates using provisional official statistics on landings, numbers of vessels and effort, along with actual annual average 2017 fuel prices and previous years’ cost structures. Therefore, the 2017 values should be considered robust preliminary estimates. Seafish will revise these estimates when final government data and 2017 vessel accounts are available.

Following the calculation of fuel cost and crew share, we apply the proportions from all the other costs within the ‘combined segment sample cost structure’ to the official declared fishing income for each vessel within each fleet segment. This enables us to calculate Gross Value Added, operating profit and net profit for all vessels in each fleet segment.

37

Economics of the UK Fishing Fleet 2017

Methods

Table 7. Segmentation Criteria Table

Seafish Segments

Main Area

Main DAS Gear

Main Species by value

Main Gear Power Main Type Engine

Vessel Length

Area VIIA demersal trawl over 10m

VIIA

Demersal trawls and seines

Area VIIA nephrops over 250kW

VIIA

Demersal trawls and seines

Nephrops

>= 250 kW

>= 10m

Area VIIA nephrops under 250kW

VIIA

Demersal trawls and seines

Nephrops

<250 kW

>= 10m

Area VIIb-k trawlers 10-24m

VIIDE, VIIFG, VII other

Demersal trawls and seines

Not Nephrops

>= 10m & <24m

Area VIIb-k trawlers 24-40m

VIIDE, VIIFG, VII other

Demersal trawls and seines

Not Nephrops

>= 24m & <40m

UK Gill netters over 10m

Drift Nets and Fixed Nets

Not Nephrops

>= 10m

UK Longliners over 10m

Gears using hooks

Not Nephrops

>= 10m

Value of landings

>= 10m

Low activity vessels over 10m

>= 10m

< ÂŁ10,000

Low activity vessels under 10m

< 10m

< ÂŁ10,000

Miscellaneous vessels over 10m

>= 10m

North Sea beam trawl over 300kW

NS

Beam Trawl

Not Nephrops

>= 300 kW

>= 10m

North Sea beam trawl under 300kW

NS

Beam Trawl

Not Nephrops

< 300 kW

>= 10m

North Sea nephrops trawl over 300kW

NS

Demersal trawls and seines

Nephrops

>= 300 kW

>= 10m

North Sea nephrops trawl under 300kW

NS

Demersal trawls and seines

Nephrops

< 300 kW

>= 10m

North Sea and West of Scotland demersal trawl over 24m

NS, WoS

North Sea and West of Scotland demersal pair trawls and seines

NS, WoS

Demersal trawls and seines

Not Nephrops

Paired Trawl

>= 10m

North Sea and West of Scotland demersal seiners

NS, WoS

Demersal trawls and seines

Not Nephrops

Scottish Seiner

>= 10m

North Sea and West of Scotland demersal trawl under 24m, over 300kW

NS, WoS

Demersal trawls and seines

Not Nephrops

>= 300 kW

>= 10m & <24m

North Sea and West of Scotland demersal trawl under 24m, under 300kW

NS, WoS

Demersal trawls and seines

Not Nephrops

< 300 kW

>= 10m & <24m

Pelagic: Trawl, Seiner / Purse Seiner

Mackerel

UK pelagic trawl over 40m

38

Not Nephrops

>= 24m

>= 40m

Economics of the UK Fishing Fleet 2017

Seafish Segments

Main Area

Main DAS Gear

Main Species by value

Main Gear Power Main Type Engine

Vessel Length

South West beam trawl under 250kW

VIIDE, VIIFG, VII other

Beam Trawl

< 250 kW

>= 10m

South West beam trawl over 250kW

VIIDE, VIIFG, VII other

Beam Trawl

>= 250 kW

>= 10m

UK demersal trawls and seines under 10m

Demersal trawls and seines

< 10m

UK drift and fixed nets under 10m

Drift Nets and Fixed Nets

< 10m

UK hooks under 10m

Gears using hooks

< 10m

UK pots and traps under 10m

Pots and Traps

< 10m

UK pots and traps 10m-12m

Pots and Traps

>= 10m & <12m

UK Pots and traps over 12m

Pots and Traps

Value of landings

>= 12m

West of Scotland nephrops trawl over 250kW

WoS

Demersal trawls and seines

Nephrops

>= 250 kW

>= 10m

West of Scotland nephrops trawl under 250kW

WoS

Demersal trawls and seines

Nephrops

< 250 kW

>= 10m

UK scallop dredge over 15m

Dredges

Scallops, queen scallops, cockles

>= 15m

UK scallop dredge under 15m

Dredges

Scallops, queen scallops, cockles

<= 15m

39

Economics of the UK Fishing Fleet 2017

Glossary and list of acronyms Glossary

Acronyms

Active vessel. Any UK registered fishing vessel that recorded any amount of landings in the year considered.

FTE. Full-Time Equivalent

Fishing costs. Costs incurred by vessel owners as a result of their fishing activity. Fishing costs include fuel costs, crew shares, ice and boxes, sales commissions, harbour dues, subscriptions and levies, quota leasing, days at sea purchases, food and stores, travel costs and shore labour.

Fleet segment. A group comprising vessels of similar characteristics in terms of level of activity, main gear used and/or area of operation.

FTE (Full-Time Equivalent). A standardised measure of employment, based on an employee working 37 hours per week, 52 weeks a year.

GDP (Gross Domestic Product). An indicator of the economic performance of a country.

GVA (Gross Value Added). A measure of the value of goods and services produced by an industry. In this report, GVA is calculated as the sum of operating profit and crew share.

Low activity vessel. Any vessel that recorded a total value of landings under ÂŁ10,000 in the year considered.

Net profit. The result of subtracting finance costs, depreciation and interest costs from operating profit.

Operating costs. Costs incurred by vessel owners.

Operating costs comprise fishing costs, which are dependent on the level of fishing activity; and vessel costs, which tend to be fixed regardless of the level of activity.

Operating profit. The difference between total income and operating costs.

Vessel costs. Costs incurred by vessel owners regardless of the level of fishing activity. Vessel costs include gear and vessel repairs, insurance, electronic equipment and administration costs.

40

GDP. Gross Domestic Product GVA. Gross Value Added MMO. Marine Management Organisation NS. North Sea NSWoS. North Sea and West of Scotland TAC. Total Allowable Catch VCU. Vessel Capacity Unit WC. Western Channel WoS. West of Scotland

Economics of the UK Fishing Fleet 2017

Further reading Scottish Sea Fisheries Statistics 2017 UK Sea Fisheries

Statistics 2017

Fisheries statistics

Marine Scotland

Marine Management Organisation – UK Sea Fisheries Statistics 2017

Scottish Sea Fisheries Statistics 2017

UK Sea Fisheries Statistics 2017 provides a broad picture of the UK fishing industry. This publication includes data on the structure, activity and landings of the UK fleet along with additional information on overseas trade, exploitation of stocks and the world’s fishing industry.

This report uses the same underlying dataset.

A detailed overview of landings of sea fish, the Scottish fishing fleet and the number of fishermen employed in 2017.

Employment

Fish price

Quay Issues – 2017 Pilot Survey of Employment in the UK Fishing Fleet

Quay Issues (Vol. 4) pp. 14-20, ‘Fish size and sales price’

This report summarises the findings of the 2017 pilot survey of employment in the UK fishing fleet carried out

by Seafish: gender, age, nationality and remuneration of workers among other factors.

Fish price is a significant factor influencing the financial performance of UK fishing businesses. This article looks at the effect of increasing gear selectivity on fish price and analyses the links between vessel reputation and price.

41

November 2018 Seafish Report No. SR728 ISBN No. 978-1-911073-34-5 © Copyright Seafish 2018 Seafish Economics Seafish 18 Logie Mill Logie Green Road Edinburgh EH7 4HS