MISSISSIPPI STATE -- Catfish producers saw actual profits last year after two years of losses, and are hoping feed prices in 2004 won't put their operations back into red ink.

Jim Steeby, Extension aquaculture specialist with the National Warmwater Aquaculture Center in Belzoni, said feed prices have made it difficult to see a profit in the catfish industry.

"Last year, our average feed price was $230 a ton," Steeby said. "This year's feed prices are going to be at least $50 a ton above that price."

Feed, which is primarily made of soybean meal, accounts for half the cost of catfish production. According to Mississippi State University's Department of Agricultural Economics, producers can continue to make a profit if they get 75 cents a pound or more for their fish and feed doesn't rise above $280 a ton.

Soybean prices had been low in recent years, but last fall they began to rise. As of early May, feed costs about $300 a ton.

Terry Hanson, MSU agricultural economist, said the cost of production in Mississippi is typically between 60 and 70 cents a pound.

"They've been losing money for about three years," Hanson said of producers.

Prices hit a recent low in January 2003 of 52.9 cents a pound, well below the cost of production. By early May, prices had rebounded to about 75 cents a pound, Hanson said.

"Farmers have been trying to stay alive by feeding less and stocking less. A few years of doing this created lower numbers in the ponds, so processors are having to bid up the numbers to get the fish they need," Hanson said.

Since more than half the catfish are sold in restaurants, Hanson said the improved economy means more people are eating out, which also is helping prices.

"The industry will survive because they have a good product and there's a large quantity being sold, but prices need to go up more to enable producers to survive the short-term squeeze," Hanson said. "It's going to be rough and some more folks will probably go out of business."

The Delta aquaculture specialist said there was an oversupply of catfish in 2001 and 2002, but catfish acreage in Mississippi dropped from 113,000 acres in 2001 to 101,000 acres when tallied in February.

Acreage leaving catfish is going into timber, wetland programs or soybeans. Most of the lost acreage has been older ponds in need of repair, and Steeby said he doesn't expect the acreage leaving catfish production to return.

Cool spring temperatures mean spawning was on track at 3 percent to 4 percent under way by the first of May and should conclude by mid-July. Producers have not yet started to feed heavily, and the only concerns have been off-flavor problems lingering from winter.