Written by Michelle Gayton
September 4, 2012
ALASKA & PACIFIC KING CRAB
Fleet hopes royal prices will keep the fishery flush despite a declining catch
A strong yen, fleet and processor consolidation, and prospects of a smaller total allowable catch could drive ex-vessel prices for red king crab north of $10 per pound when the Bristol Bay season kicks off in October.
Last season’s TAC of around 7.8 million pounds was drastically lower than 2010-11’s 13.3 million pounds and 14.4 million pounds in ’09-10. Though the Alaska Department of Fish and Game hadn’t announced this year’s TAC by press time, the industry consensus was that it might be further reduced.
That should trigger buyer increased demand, says Jake Jacobsen, executive director of the Seattle-based Inter-Cooperative Exchange, a crab harvester group.
“There are so many people that want crab that there’s no shortage of buyers,” he says.
Most of the red king crab demand comes from Japan, which takes up to 65 percent of Alaska’s harvest. Last year’s strong yen gave Japanese buyers an edge. And this year’s exchange rates are setting the stage for a repeat performance.
“I anticipate that [Japanese buyers] will take most of the product over there,” Jacobsen says.
According to the University of British Columbia’s Sauder School of Business, the monthly average value of the yen against the dollar during crab season strengthened from around 82 in 2010 to about 77 to the dollar last year. This year in July, the yen hovered at around 79. If it follows the trend of the past two years, it could strengthen slightly by October. That and the lower harvest quota will “have a big effect on price,” Jacobsen says.
Determining ex-vessel prices that each boat might receive for its catch has become complicated, since the red king crab fishery was rationalized in 2005, Jacobsen says. The most recent Fish and Game data shows average ex-vessel prices ratcheting up from $4.98 per pound in ’08-09 to $8.96 in ’11-12.
Fish and Game price data now includes the Community Development Quota fishery, and doesn’t reflect post-season adjustments. But the Alaska Department of Revenue lists last year’s price at $10.80 per pound. Some fishermen got even more for their catch last year, says Jacobsen. He explains that crabbers who hold “A” shares of individual quota, which are committed to delivering to specific processors, received the $10.80 per pound. Vessel owners holding “B” shares, meanwhile, can sell to any processors, and last year, the competing processors paid $11.30.
The strong prices haven’t quite offset the TAC decline, though. Fish and Game data shows that the value increased from $70.1 million for the ’09-10 season to $92.5 million for ’10-11, but receded to $69.9 million in ’11-12.
Discussions between regulators and the industry last March at an Alaska Board of Fisheries meeting resulted in eliminating a regulation from the fishery’s open access days that called for closing the red king crab season when the TAC was 4 million pounds or less, says Heather Fitch, area management biologist with Fish and Game in Dutch Harbor.
“It was just a relic of the old management system,” Fitch says.
The Bering Sea king crab season was closed in 1994 and 1995 when the TAC (then called a guideline harvest level) for the open access fishery fell below 4 million pounds. Under the present management program with individual shares and self-reporting, the fleet could conceivably fish on a TAC of even less than a million pounds.
Meanwhile, consolidation over the past seven years has whittled the fleet from around 250 vessels to 65, according to the NMFS Bering Sea and Aleutian Islands Crab Rationalization Report for 2010-11. During that same time period the average vessel has fished roughly the same number of registered pots (212 per vessel last year) but skippers are doubling the number of times they pull pots during the season from an average of 1,119 in 2005 to 2,025 last year.
— Charlie Ess
Farming out the Chesapeake proves lucrative for Virginia oyster growers
Virginia oyster growers expect another huge sales surge in 2012, as the industry eyes bigger plantings that could bring more shucked product to market, along with single-shell plantings that supply the high-paying half-shell market.
Oyster sales of 23 million shellfish were worth an estimated $6.7 million in 2011. That represents a 38 percent increase from 2010’s 16.9 million shellfish, which were worth an estimated $5.2 million. A Virginia Institute of Marine Science survey reports growers think they can get another 44 percent growth in numbers sold this year, even as the average market price hovers around 30 cents per oyster.
The federal government put in a lot of subsidies for oyster planting to compensate for past Chesapeake Bay fishery failures. And now the industry is splitting private investment efforts between the half-shell and shucked trade, says shellfish aquaculture specialist Karen Hudson, co-author of the institute’s report.
“There’s certainly interest among the larger growers in that spat-on-shell” and how it could bolster the market for shucked oysters, Hudson says.
Also called remote setting, that method introduces oyster larvae with oyster or surf clam shells in circulating tanks on land. With the babies anchored on shells, growers transport the whole assembly to a growing site.
“Historically Virginia has had a very strong market for shucked product, and we still have large shucking companies,” says Mike Oesterling, executive director of the Gloucester, Va.-based trade group Shellfish Growers of Virginia.
The problem has been single-shell oysters can be too expensive — up to 60 cents apiece, according to the institute. But “with the spat-on-shell, growers believe they can get enough,” Oesterling says.
Another advantage is that the volume and clumpy nature of those oysters afford growers some protection against depredations by cownose rays, the scourge of Chesapeake growers, he says.
The mild 2010-11 winter had oyster growers “all waiting for the shoe to drop,” Hudson says, expecting more parasites and pests surviving the winter. But growers reported normal spring and summer conditions, she says.
Virginia oyster plantings declined 14 percent during 2011, but institute researchers say that simply reflects the shift away from single-shell planting to using the spat-on-shell method. Those plantings could be up 10 percent this year according to information growers provided to the institute.
The Northeast industry was rattled in July when the U.S. Food and Drug Administration issued a warning against oysters from New York’s Oyster Bay Harbor on Long Island’s north shore, after an outbreak of the Vibrio parahaemolyticus bacteria.
The oysters were linked to cases of gastrointestinal illness in several states, FDA officials say. Long associated with warmer southern waters, vibrio is becoming an issue in the Mid-Atlantic region as average water temperatures rise. Delaware Bay oystermen now follow protocols for keeping shellfish shaded and cool in transit on the boats, and state health officials monitor for the bacteria.
The Delaware Bay industry got its own shock with the federal criminal convictions of several watermen for violating the Lacey Act by falsifying landings records for $750,000 worth of oysters.
Brothers Tom and Todd Reeves and their company, Shellrock of Port Norris, N.J., were convicted after a weeks-long jury trial. Guilty verdicts came in, too, for Shellrock employee Renee Reeves, the wife of Todd Reeves; Heislerville, N.J., oyster captain Kenneth Bailey; and Mark Bryan, owner of Harbor House Seafood in Seaford, Del.
Bryan’s reopening of a Port Norris shucking house was a boost to the Delaware industry, which is seeing a revival from a massive shell-planting effort to reinvigorate eroded oyster beds. Federal prosecutors last year touted the oyster criminal case as the first in a drive against environmental crimes, and illegal fishing charges were brought in other cases in the South.
— Kirk Moore
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