Controversy in the caviar
The American paddlefish, named after the long, flat appendage jutting out from its head, is a pretty bizarre-looking creature. But the prehistoric species has made a reputation for itself around the world for another reason: caviar.
In between the rivers and the five-star restaurants, the eggs pass through fish houses run by a unique group of American fishermen who, decades ago, threw out their nets to catch a piece of this lucrative market. But in recent years, these niche fishermen are facing an unexpected challenge to their livelihood from the state of Oklahoma, which is selling the fish eggs at a deep discount.
A family affair
Steve Kahrs runs Osage Catfisheries with his brothers in Osage Beach, Mo., and they grew up in this business.
“This is my dad’s dream. And we’re trying to fulfill it,” Kahrs said.
Steve’s late father Jim got into the caviar business in the 1980s after reading headlines that the sturgeon in the Caspian Sea, where caviar traditionally came from, was nearing extinction, and catching the fish was banned. That’s when the Kahrs then started what they call a paddlefish ranching program.
The “ranchers” are Missouri landowners who have lakes or ponds. They allow Osage Catfisheries to raise paddlefish on their land for free, and in exchange, they get a cut of the revenues from the resulting caviar sales. Business was good, until a few years ago.
“We’re now having to come back to these individuals and say ‘we’re sorry, your fish are ready to go, but we can’t afford to harvest them,’ ” Kahrs said.
The problem, Kahrs and other paddlefish fisherman say, is Oklahoma, where it is illegal for individuals to sell paddlefish eggs. But the state can sell all it can.
In the name of conservation
The paddlefish has been protected by both the Endangered Species Act and the International Convention on Trade of Endangered Species since 1992. Today, paddlefish populations vary from region to region. In Canada, they’re pretty much extinct. But in northeastern Oklahoma, there are more than any other place in the world.
In 2008, the state opened the Paddlefish Research Center, a project run by the Oklahoma Department of Wildlife Conservation.
“The true beauty and purpose of this is to conserve the paddlefish,” said Brent Gordon, the biologist who runs the center in Miami, Okla.
During the couple months the center is open in the spring, recreational anglers that have paid the state for a fishing permit can bring their paddlefish to the research center. There, the program will filet the fish, package the meat, and dispose of the carcass for free. In exchange, Gordon and his team collect data on the fish for research purposes. They also collect the roe – or raw eggs — and turn them into caviar to be sold on the international market. The revenues go back to the Department of Wildlife Conservation.
“The idea was that not only have you created an operation in which it pays for itself to research the paddlefish population, but you’ve also created a way of getting revenue to pay for the toys that law enforcement needs, such as night vision, boats, trailers, and also being able to have money to pay for thermal imaging flying over the lake at night – things like that,” Gordon said.
The caviar, he said, is just a byproduct.
This year, the program sold over 15,000 pounds of the stuff. That’s a pretty average haul for the program that can bring in up to $2 million annually. They sell it anywhere between $65 per pound and $135 per pound, mostly to buyers in Japan.
“Managing the population of paddlefish in Oklahoma is what we are paid to do, and we do it very well,” Gordon said.
Back in Osage Beach, Steve Kahrs says that is where his problems begin.
“There’s no way a private company of our size can compete with that kind of volume and that kind of price,” he said.
To be profitable, Kahrs would have to sell his caviar at $300 per pound. He said Osage Catfisheries would actually lose money if it harvested its paddlefish today.
“We don’t have the luxury of cutting prices, and quite frankly I’m not going to play that game,” Kahrs said. “It’s hard to compete with a cheap product.”
Because Oklahoma anglers fish on their own dime and for fun, the state’s program doesn’t front the costs of raising or catching the fish, which is why their price is so low.
“An individual cannot compete with a state. An individual, simply, cannot contest, with a state,” said Jessie George, a caviar producer in Marvell, Ark.
George said he has seen his prices drop $35 per pound this year alone, or about 30 percent. He said he’s one of the largest producers in the state of Arkansas, but even he can only produce a fraction of Oklahoma’s annual output.
Fishermen from Missouri, Arkansas, Tennessee, Kentucky, and other states share the same frustrations. Some dispute the claim that paddlefish are endangered, and argue that Oklahoma’s program is irrelevant. But they all have the same story: prices are falling, expenses are rising.
An Indiana producer said his fishermen used to make up to $30,000 in one paddlefish season. Now they’re lucky to make it to $15,000. Another said he’s had to let go of 13 fishermen in two years, and now only employs three. Yet another said he had to lower his prices an additional 25 percent below Oklahoma’s just to find a buyer.
While the global recession has certainly had an impact on the market, Oklahoma seems to have changed the economic equation for caviar producers.
“Obviously whenever you have one entity that comes in and has a significantly reduced price, they’re going to drive the price down for everyone that’s in that market,” said Joe Parcell, a professor of agricultural economics at the University of Missouri.
Public vs. private
But at the end of the day, private producers like Steve Kahrs are upset about who they’re competing against, and the unfair advantages they say Oklahoma has.
“It all boils down to the fact that I hate seeing, and I think a lot of people hate, seeing a government agency go up against private industry,” Kahrs said. “I mean, our family has been in this business a long time. We’re not looking for any special favors. We built everything we’ve got. We never got any handouts.”
Back in Oklahoma, Gordon said it was never about competition, and disagrees with claims that his program is significantly affecting the market. For him, the caviar is just a means to an end. His job, first and foremost, is about taking care of Oklahoma’s paddlefish, and he said this program has given him an unprecedented advantage in his research and conservation efforts.
“Our biggest concern has to do with keeping this population healthy, and not only this population, but other population of paddlefish in the state of the Oklahoma,” Gordon said.
Private caviar producers may be catching a break soon. Gordon said the data indicate that Oklahoma’s paddlefish population may need some time to “rest,” so to speak, and that discussions to cap the number of fishing permits issued in 2015 are ongoing.
Click on the markers to learn more about those involved in the paddlefish caviar industry, and what they're saying about the state of their industry.