The state's last fish factory has not died. Its detractors say it just smells that way.

• Author: Latham, Art
• Position: Finis?

When he stands on the wharf of the state's sole surviving menhaden fishing-and-processing operation -- one of only two on the East Coast -- Beaufort Fisheries Inc.'s president and general manager can easily imagine fins circling him. Jule Wheatly believes they belong to real-estate developers, regulators, competitors and union organizers, all ready to rip apart his family-owned business.

What Wheatly, 52, actually sees are condos and a public boat ramp. In his lifetime, Beaufort has morphed from fishing village to ever-so-charming tourist town, with about 100 National Register of Historic Places plaques gleaming in its 12-block downtown. Oak-shaded bed-and-breakfasts cluster in Colonial neighborhoods, and Front Street's refaced shops hug the harbor.

When he was a boy, the town had eight fish factories. "Menhaden was king. It kept Morehead [City] and Beaufort going, and nobody complained about the smell." That smell -- the odor of fish being rendered to oil and ground to meal -- meant money for townsfolk. "In those days, if they didn't smell anything, they got nervous."

Before Europeans arrived in 1709, this was an Indian fishing village. Until 1723, when it was incorporated and named for the Duke of Beaufort, it was known as Fishtowne. Through the centuries, the economy of North Carolina's third-oldest town has always been, in one way or another, seaborne.

Many of the processing plants Wheatly remembers dated from the Southern fishery that Yankee entrepreneurs developed in the 1890s, an industry built on the abundance of Brevoortia tyrannus -- oily, inedible, plankton-feeding fish that max out at barely a pound and under a foot -- in the Chesapeake Bay and off the North Carolina coast. During the 1940s, menhaden's primary use expanded from fertilizer to high-protein animal feeds and oil production. Fish meal was mixed into feeds, and the oil was used in making soap, linoleum, waterproof fabrics and paints.

The industry peaked between 1953 and 1962. In an average year during that period, 112 vessels -- still called "steamers" after the coal-fired ships that began replacing sailing fishing sioops following the Civil War -- landed fish at 20 reduction plants from New York to Florida. Plunging prices and a sharp decline in catch closed nine plants during the '80s alone. In 1990, 33 vessels -- "operating in a more restrictive and regulated environment," an Atlantic States Marine Fisheries Commission report notes -- supplied five plants, including a processing ship. Now, only a dozen steamers unload menhaden here and at Reedville, Va., on the Chesapeake.

Beaufort Fisheries was founded in 1934 when Wheatly's grandfather and businessman Will Potter assumed the note on a Standard Products Co. processing plant. The Wheatly family still owns 75%; the Potters, 25%. "We only closed down once since then, due to low prices in the '80s when a lot of companies went under. But we made it, and we've been...