A US Department of Agriculture (USDA) federal food program is looking to buy Atlantic haddock, pollock, and perch as part of its $1 billion (€936,972) in food purchases for school meal programs and food banks, a move that follows US lawmakers complaining about challenges with the government agency's Section 32 Program.

The funds, provided through USDA’s Commodity Credit Corporation, are used to feed roughly 30 million students who participate in school lunch and 15 million who participate in school breakfast each day, according to the USDA.

New Bedford, Massachusetts-based Blue Harvest is among the companies the USDA awarded with major groundfish contracts in both 2020 and 2022, when the government agency procured seafood from the Atlantic Ocean for the first time in over a decade.

"We hope that this announcement by the USDA of its intent to buy Atlantic haddock, pollock, and ocean perch will ultimately result in a significant purchase," Blue Harvest said Thursday.

"Continued support of our fisheries by the USDA will benefit local fishermen and processing workers, and bring healthy, local, and sustainable seafood to American citizens."

Blue Harvest is capped in terms of it participation in the scallop fishery, restricting its ability to grow through its scallop business. As a result the company has been selling off its scallop harvesting assets, building a new, nine-boat fleet of groundfish trawlers.

Earlier this month, Blue Harvest Fisheries completed the purchase of its newest groundfish vessel, the Nobska, the first of company’s new investments to upgrade its groundfish operations.

Blue Harvest is partly owned by $500 million (€515 million) private equity group Bregal Partners, a subsidiary of Bregal Investments, in turn a subsidiary of Germany-based COFRA Holding. The group's ownership has come under scrutiny in recent months.

Section 32 contract challenges

The Massachusetts congressional delegation that lobbied the USDA to include seafood caught off the northeast portion of the United States in its commodity credit corporation program sent a letter last December to the USDA secretary citing issues with how the Section 32 program appeared to work better for other fisheries.

Section 32 is a permanent appropriation that since 1935 has set aside the equivalent of 30 percent of annual customs receipts to support the farm sector through the purchase of surplus commodities and a variety of other activities, according to the USDA.

From that appropriation, the largest transfer, over $8 billion (€7.5 billion), is for the child nutrition programs that are administered by the USDA.

"Northeast fisheries face ongoing stock surpluses of Atlantic pollock, haddock, and redfish, as well as continued economic instability from market uncertainty," the lawmakers said.

Tracking trends in seafood markets

Fisheries in other parts of the country with similar surpluses and economic conditions have benefited from regular purchases by the USDA, they added

During the last quota year, from May 2021 to the end of April 2022, less than 50 percent of the allowable catch of haddock, redfish, and pollock was harvested, according to the letter.

"Without an additional Section 32 purchase to provide a market for this surplus quota, these percentages are expected to drop even lower, with significant price impacts," the lawmakers explained.

They cited that without USDA Section 32 purchases of Atlantic groundfish, prices of Atlantic pollock will fall from $1.20 (€1.13) per pound to $0.75 (€0.71) and Atlantic haddock will fall from $2.00 (€1.87) per pound to $1.50 (€1.40).

"According to producers, that decline in prices would create economic conditions that would disincentivize Atlantic groundfish producers from fully harvesting this resource and bringing it to domestic markets," they said.