Written by Jen Finn
December 4, 2012
Easy winter brings bug boom and early shed, which causes prices to plummet
Low prices caused by the great lobster glut of 2012 echoed into the fall. Dockside lobster values remained far below pre-recession norms, and some fishermen pulled their gear early as Hurricane Sandy sounded a menacing finale to the season.
Prices in 2012 "were all over the board. It hasn't rebounded that much," says Bill Adler, the Massachusetts Lobstermen's Association's executive director, who compiles weekly market reports that combine price points from Maine to Maryland. By late October, there was "not much going on, even in the European market," he says.
Lobster quality was quite good in the fall, with lots of hard-shells that in better times domestic and export buyers snapped up. But the mild 2011-12 winter triggered an early shed in New England lobsters and a bombshell of big catches of low-quality bugs.
"Normally they shed in June down here," Adler says. In 2012 "they shed in May."
With more lobsters than fishermen and dealers could sell, prices hit $2.50 a pound — as they did in the depths of the recession in 2009 — and there were even reports of $1.25 in Maine's smallest ports during early July. Some harbors shut down when it wasn't worth the cost of fuel to fish.
Then again, some lobstermen tried compensating for prices by moving more volume.
"We were telling some of these guys, 'You're driving down the price by bringing in junk,'" Adler says. When costs of fuel, crew, dockage, insurance and the rest are figured in, he says, lobstermen "can't make money under $4."
October hard-shell prices in Boston returned to $3.25 and $3.50 on Massachusetts' South Shore, and $5 to $6 for larger offshore lobsters. But processors were still getting the odd soft-shells for $2.50 to $3.
In August a New Brunswick lobster processor purchased a former newspaper printing press building in a Rockland, Maine, industrial park and began converting it for lobster holding and processing.
The project was inspired by the summer's blockade of Maine lobster by New Brunswick and Prince Edward Island lobstermen who sought to prevent shipments from reaching Canadian plants, reported the Free Press in Rockland. Maine's lobster glut drove down prices paid to Canadian fishermen. In October, reported prices ranged from $2.75 on Prince Edward Island to an anticipated $4 in the Bay of Fundy with new area openings.
The Canadian industry seeks changes in the season to work around warmer months, times when high supply and slow demand make it harder to manage inventory even without higher water temperatures stressing the stock. After the Cape Breton Cooperative Fisheries group lost more than 50,000 pounds of lobster last summer it asked the provincial government for aid to build new onshore chilled holding tanks.
"Normally the Maine catch comes in when we're not fishing. So it's not an issue in most years," says Geoff Irvine of the Lobster Council of Canada.
Canada's spring and fall seasons are focused on hard-shell. "We want to catch lobsters at best quality, that's why we do it this way," Irvine says.
But the summertime conflict arose when Maine lobsters were still flooding Canadian companies at the same time one Northumberland Strait lobster area opened Aug. 10, Irvine says. Canadian lobstermen enjoyed good spring prices. But at one late October area opening price was down to around $3.50, "so it hasn't been back that much," Irvine says.
Climate change, already a huge issue for groundfish, could affect lobsters next; NMFS scientists think warmer water temperatures are already extinguishing traditional nearshore lobster spots off New Jersey.
This summer NMFS admitted environmental factors are frustrating the 20-year effort to rebuild Gulf of Maine cod, and a new scientific report suggested a major shift north of the Gulf Stream is funneling in warmer water. — Kirk Moore
Alaska & Pacific Petrale Sole
Quota trades, wholesale connections help skippers feed the fresh market
Petrale sole fishermen made adjustments to their fishing practices to reach their 2012 season harvest allocations in year two of the West Coast bottomfish individual fishing quota system. Prices in 2013 should remain strong as fishermen peg their trips and deliveries to sync with steady demand for fresh product in San Francisco.
In 2011, the IFQ program's first year, trawlers had an annual catch limit of 1.9 million pounds of petrale and harvested approximately 1.8 million pounds worth $1.4 million, according to Pacific Fisheries Information Network data. The data also indicates that the 2012 season, which stretches through the calendar year, has been better all the way around.
With a 2012 catch limit of 2.3 million pounds, the fleet had caught 1.7 million pounds worth more than $2.2 million as of mid-October 2012, and it was very likely that this year's higher limit would be reached by season's end.
"Based upon the data at hand, and looking at January through July, we're about 40 percent ahead of last year's pace [of petrale landings]," says Steve Freese, regional economist with NMFS in Seattle.
Other groundfish species sport a similar harvest pace: Last year, the fleet caught 35 percent of its annual Dover sole catch limit of 49 million pounds by year's end. This year's harvest already stood at 26 percent of an identical harvest limit in October.
"I think the increased catch reflects increased confidence in how they use the IFQ system," says Gretchen Hanshew, fisheries management specialist with the NMFS Seattle office. "I think it's very much a function of how comfortable they are feeling in the new system."
Under the new regime, fishermen have been taking their respective shares of bottomfish species and trading them cooperatively to amalgamate quota of the species they prefer to target. An important distinction is that the shares are not trading permanently, as will likely occur after a moratorium against permanent trading dissolves in another year.
For example, some fishermen traded blackcod quota or quota of other species to another boat in exchange for petrale quota. Those who acquired petrale then concentrated their fishing efforts through the summer, which changed the delivery dynamics, according to Scott Adams, operations and production manager with Hallmark Fisheries, in Charleston, Ore.
"Before the IFQs you had a lot more winter product coming in, and it really messes the market up," Adams says. The typical winter deliveries by bigger boats outstripped petrale demand in markets that prefer fresh fish in the round, meaning more fish hit the freezers, Adams says, thus diminishing their value.
Additionally, Adams says, smaller boats — around 50 feet long — are fishing at a slower pace, and delivering better quality fish to San Francisco, which accounts for 99 percent of the petrale coming through his processing plant.
"These guys are fishing short tows and taking good care of their fish. These deliveries are coming in at around 4,000 pounds, 8,000 pounds, max. So, you don't have those huge volumes."
Moreover, small boat skippers are timing their fishing to coincide with demand. "Our boats check the market to make sure that there isn't too much product coming down," Adams says.
The base ex-vessel price to the boats has been around $1.50 per pound, Adams says, with sliding scale adjustments to fishermen based on wholesale prices the company receives. PacFIN data lists the 2012 average ex-vessel price at $1.44.
By comparison in 2011, when low initial IFQ allocations diminished interest in catching petrale, the ex-vessel price averaged $1.39. — Charlie Ess
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