Red Tide Causes Economic Losses to Southwest Florida Industry

Red tide events are somewhat common to the Southwest (SW) Florida coastal environment. Evidence of such periodic red tides extends many years into the past. Fish kills and disrupted water-dependent activities have been the historic hallmarks of these events, but more recently … a new and growing industry has felt the impact of red tides. Commercial molluscan shellfish culture within the region is often closed, as are natural shellfish beds, when red tides occur within SW Florida.

An extended red tide event occurred during the period from November 2015 through April 2016. The harvest of cultured shellfish (hard clams and sunray venus clams) was significantly disrupted during this period, with the Charlotte Harbor region being closed almost 40% of that time period, while harvest in Tampa Bay region was closed almost 80% of the time. Such closures disrupt business activities for hatcheries, growers and dealers, as well as the other businesses that rely on regional shellfish culture for a large part of their sales and revenue.  At the request of the SW Florida shellfish culture industry, the University of Florida conducted an assessment of the economic consequences to the industry of the 2015-16 red tide event. The industry provided the information and data needed to conduct a formal economic impact analysis that would provide some insight into the negative impact the red tide event had on the SW Florida molluscan shellfish culture industry.

A brief questionnaire was developed by Florida Sea Grant for a survey that gathered the necessary data from cultured clam wholesale dealers in the SW Florida region. The information requested was designed reflect not only the changes due to red tides experienced by the dealers, but also that experienced by hatcheries, growers, and other related businesses. This inter-connected analysis is possibly through the use of an economic impact model, IMPLAN, which is used frequently by the University of Florida to measure the economic contribution of local, regional, and statewide industries and institutions within Florida. A recent study found that the hard clam culture industry generates almost $40 million in economic impact to the Florida economy.

However, the most recent study focused on the hard clam culture industry in SW Florida region and attempted to isolate the negative economic impacts associated with the 2015-16 red tide event. The survey solicited the information necessary to create a baseline period characterized by a “typical” closure pattern, and then gather the information for the 2015-16 period that would allow a determination of the difference between the two periods (i.e., baseline versus 2015-16 period).

The analysis found that the extended red tide event of 2015-16 resulted in a sales loss of $1.33 million. This reduction in sales generated a negative economic impact of $3.25 million to the Florida economy, as well as tax generation loss of almost $90,000. In addition, approximately 30 jobs were lost due to the sales reductions associated with the red tide event. These negative impacts were distributed across hatcheries, growers, seafood dealers, supply dealers, seafood retailers, restaurants, and other business that are connected with the molluscan shellfish culture industry.

In summary, the SW Florida shellfish culture industry is an important contributor to the coastal economy in the region. Red tide events, though a common occurrence in the region, can be costly to local industries. This recent study by UF provides strong evidence of that negative impact. Those Florida agencies involved in coastal resource management may wish to carefully consider the economic consequences of red tide events, and other natural events, so as to allow the commercial shellfish industry to better mitigate such losses and business disruptions, while continuing to provide the safe and high quality seafood for which they are known.

Chuck Adams, a marine economics specialist with UF/IFAS/Florida Sea Grant is the author of this article. If you have any questions, contact Chuck by phone at 352-294-7667, or by email at cmadams@ufl.edu.

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