Written by Jen Finn
March 6, 2013
Retail demand is driving bull market for upscale product on the half-shell
Virginia oyster growers saw a significant bump in their fledging industry's sales in 2007. It's a sign that cultivated Chesapeake oysters can capture some of the retail revival that's bringing New York City money to eastern Long Island.
"The market is incredibly strong now for farm-raised oysters and quality wild oysters," says Chris Quartuccio, a grower on Long Island's Great South Bay who owns the Blue Island Oyster Farms and Blue Island Seafood Market in Sayville, N.Y.
The half-shell trade is one sector of the market with little foreign competition.
"It's much more difficult to ship a live oyster from China," says Gregg Rivara, an aquaculture specialist with the Cornell Cooperative Extension Service on Long Island.
With fewer than 50 hatchery-based oyster operations, Virginia's industry sold 4.8 million shellfish in 2007, up from 3.14 million in 2006, which almost quadrupled production from a year earlier.
That's still a fraction of the nearly 212 million clams sold from Virginia bay lots in 2007. But continued growth potential is there for oysters because of "strong demand and increasing knowledge among growers," says Thomas J. Murray of the Virginia Sea Grant Program. He and Sea Grant colleague Michael J. Oesterling authored a June 2007 report on Virginia's shellfish aquaculture.
"Virginia is an oyster-eating state," Murray says. Those oysters are moving into upscale Washington-area markets, too, "where we compete with New England product," he adds.
Average dockside prices for farmed Virginia oysters held steady around 30 cents each for the last three years. But in 2007, peak prices edged up to 58 cents from 50 cents in 2005-06, the report notes.
"We've had an oyster farming industry in Virginia since the mid-1800s," says Oesterling, who notes that fishermen practiced a husbandry fishery of moving wild seed oysters to private leased grounds for grow-out.
Now, old-line oyster producers Cowart Seafood Corp. and Bevans Oyster Co. see long-term potential for rebuilding the shucked market using hatchery seed, if they can get enough, says A.J. Erskine, who manages aquaculture development for the Northern Neck companies.
"As more and more oysters go overboard and more people get into boutique and specialty oysters, the industry can grow," Erskine says. "We're in it for the volume, thinking that years down the road... we could have enough to keep the shucking houses busy."
Right now, more hatchery capacity is needed, and with high prices and demand, Erskine says he wouldn't be surprised to see new ventures, or Virginia's hard-clam hatcheries convert some of their production lines to oysters.
Long Island producers are feeding a New York City appetite for oysters not seen since the early 20th century. City steak houses are again serving them as first courses, and boutique raw bars are stocking 30 or more varieties and getting $4 apiece for some.
"Oysters were not big in Manhattan in the 1980s," Quartuccio says. Like others in the business, he credits the arrival of Japanese sushi bars for paving the way for oysters. Sushi got people used to the idea of eating raw seafood.
"In the 1990s we had a huge set of natural oysters on the North Shore of Long Island," says Quartuccio, who started as an oyster diver selling direct to restaurants. "In 1996-97, the dock prices were around 9 cents an oyster. Now that same oyster, I pay 40 cents for. The price has practically quadrupled."
Those prices are what make cultured oysters economically viable in the Northeast, Quartuccio stresses.
"We grow the world's only genuine Blue Point oyster," he says. "The only reason we can do it is we get a really good price for it."
By comparison, Long Island prices for littleneck hard clams have dropped to 16 cents versus 23 cents in past years. Clam prices may be rising soon, Quartuccio says, but overall, "you don't want to be in the clam business. Oysters grow twice as fast here, and you get three times the money for them. And you get brand recognition."
Tom Kehoe of K&B Seafood in East Northport, N.Y., has been in the business since 1975. He says that respect for oysters grew with public health monitoring programs since the 1980s that put "accountability and traceability" into the system.
"That's built confidence among the chefs, the food writers, and the consumer most importantly," Kehoe says.
America's booming culinary education schools have produced thousands of chefs "who are eminently qualified to handle food," he adds. "We've been the beneficiaries of that. People want what we have to sell." — Kirk Moore
Gulf/South Atlantic Stone Crab
Cool economy keeps leftover product (and ex-vessel prices) in cold storage
The cooling U.S. economy chilled Florida's stone crab market last season. And the effect on ex-vessel prices will likely continue, at least at the beginning of the 2008-09 season, thanks to leftover product in cold storage.
"I expect to see a soft market," says Gary Graves, executive manager of Keys Fisheries Market & Marina in Marathon.
Several related elements have contributed to a pretty steep price decline. One, overall ex-vessel claw prices — averaging close to $10 a pound the previous two seasons — were due for a market correction. Two, international economic woes that began with the U.S. subprime mortgage debacle began to curtail travel and tourism in Florida. Three, a modest production increase during the 2007-08 season, in the context of the iffy economic environment, was more than the market could bear.
Key West fisherman George Niles, outgoing president of the Florida Keys Commercial Fishermen's Association, sums it up as "plenty of crab, no price."
"After Christmas, nobody wanted to buy anything," Niles says.
"It went down about three times," Graves says. "The production of the stone crabs was too much because of the weak economy. Prices didn't drop quickly enough for the markets to pick up.
"The majority of stone crabs are still eaten in the state of Florida," he continues. "Most [retail outlets] are down 10 to 20 percent. It's a mess."
Stone crab is also a luxury item, Graves says. Restaurant patrons might spring for an $8 fish sandwich, but are far less likely now to pay $35 for a plate of stone crab claws, he says.
Market corrections aside, the fishery overall is recovering from the gear and infrastructure losses of the bad hurricane years of 2004 and 2005. Statewide production for the 2007-08 season increased to 2.8 million pounds of claws versus 2.6 million pounds for 2006-07 and 2.1 million pounds for 2005-06.
Recovery was inconsistent across stone crab harvest areas, however. In the Florida Keys (Monroe County), production actually dropped from the previous season to 2007-08, from 958,237 pounds to 768,492 pounds, while production in Collier County, to the west of the Everglades, increased from 484,816 pounds to 604,399 pounds. In the keys, lower production may have been at least in part a response to the low price.
The current market fluctuations and shifting harvests aren't outside what would be expected. However, diesel fuel price increases are. The $2 drop in average ex-vessel price from 2005-06 to 2007-08 is particularly difficult to absorb for fishermen who were already carrying maximum debt in an effort to replace lost gear.
The off-road diesel price more than doubled in Florida, from about $2 a gallon to roughly $4.60 a gallon (in Key West), between November 2006 and July 2008. The U.S. Energy Information Administration was projecting in mid-July that diesel prices would rise 51 percent overall for 2008 compared to 2007 and rise another 3 percent in 2009. The national on-road average price in mid-July was $4.76 a gallon.
In Marathon, the price of marine diesel was bumping the national average on-road price.
"Right now we're at $4.72, and that's off-road," Graves says. "Fuel is going to be a problem. Sooner or later you will see a change in the way people operate."
Fortunately for fishermen struggling with low claw prices and high fuel prices, stone crab and spiny lobster are virtually conjoined fisheries. Many fishermen who target one, target the other with the same vessels. And the short-term market outlook for spiny lobster is much brighter, in part because of the export market demand.
The stone crab and spiny lobster seasons overlap. Spiny lobster opens Aug. 6 and runs through March 31, while stone crab opens Oct. 15 and runs through May 15.
On the plus side, the weak U.S. economy and correspondingly weak dollar make U.S. lobster exports more attractive to foreign buyers.
"The export side of lobster will be very good... we have a weak dollar," Graves says. "I think we'll have a strong market on lobster."
This trend was already apparent during calendar year 2007, with $7.9 million in overall U.S. exports of spiny lobster to France, the largest buyer, up from $2.6 million in 2006.
For fishermen who are hoping a strong lobster market will carry them through what is likely to be another slow stone crab season, the big unknown is the size of the lobster harvest.
"The one thing we have no idea of is production," Graves says.
— Hoyt Childers
North Pacific Crab
Bering Sea harvest, optimism rise, but Russian imports hold down king prices
More crab and higher ex-vessel prices renewed optimism on the Bering Sea last year, but cheaper Russian imports continue to hold prices below $5 per pound for the king crab fleet.
Red king crabbers saw a boost in the total allowable catch from 18.3 million pounds in the 2006-07 season to around 20.4 million pounds last year. The harvest was right on track, with 18.3 million pounds divided among IFQ shareholders and the other 2.1 million pounds taken up by community development quota shares.
Ex-vessel prices averaged $4.19 per pound, according to preliminary information from the Alaska Department of Fish and Game, which manages the Bering Sea crab fisheries. That's up from the $3.84 processors paid during the '06-07 season, but shy of the $5 per pound crabbers were hoping for during negotiations with processors in the advent of last year's season.
When it comes to better prices, increasing volumes of imported Russian king crab — a substantial portion of which has been caught illegally in the Barents Sea — aren't doing Alaska fishermen any good.
Last year's import volumes of 62 million pounds from Russia rose by 10 percent over the 56.2 million pounds imported in 2006 and represented a 65 percent gain over the 37.5 million pounds sent to the United States in 2005.
"It affects the market picture for sure, particularly for Alaska king crab," says Arni Thomson, executive director of the Alaska Crab Coalition in Seattle.
Industry groups are pushing Congress to tighten laws that would track shipments from foreign territorial waters into the United States. Meanwhile, a crackdown by Russian patrols on illegal fishing last year has reportedly crimped supplies going from the Russian Far East to Japan. That could reinvigorate Japan's interest in U.S. king crab this coming season.
"They like our king crab for its quality and its size," Thomson says.
The harvest volume for Bering Sea opilio crab remains a far cry from the record catch of 243 million pounds of a decade ago. But the 63 million pound catch during the '07-08 season, up substantially from the '06-07 landings of 36.6 million pounds, has renewed optimism within the industry.
Forrest Bowers, area shellfish management biologist with the Department of Fish and Game in Dutch Harbor, says too many environmental variables go into the fate of king and opilio crab populations to single out one as the chief component that led to increased abundance. At the same time, the crab rebuilding strategy incorporated into the management plan since 2000 hasn't hurt the health of the crab populations.
"I think the conservative approach has finally paid off," Bowers says. "The TACs are designed to promote increased abundance."
Opilio ex-vessel prices are rebounding, too. Last year's dockside offers averaged $1.40 per pound, and there have been reports of up to $1.88 per pound for some deliveries at Dutch Harbor.
Those offers are still shy of the $2.05 average crabbers saw back in 2004. But the combination of the larger harvest and an increase in ex-vessel prices from the low of $1.16 crabbers saw in 2006 produced fleet revenues of $111 million last year.
With the actual harvest coming within a couple tons of the TAC, the '07-08 opie season opened on Oct. 15, closing in some areas on May 15 while others closed on May 31. Most opie boats, however, were done fishing their shares before the end of the season. Crabbers were hoping to get the Bering Sea catch to market before Eastern Canada opened its snow crab season in April and started flooding markets with harvests of up to 200 million pounds.
"The bulk of the fleet began fishing opies in mid-to-late January," Bowers says. "By about the third week in March the fishery had pretty much concluded."
As for crab harvest quotas in the coming years, Bowers says the relative maturity at a harvestable size makes the abundance of male king crab harder to predict.
"The immediate future looks stable," Bowers says. "But three or four years out, we're not seeing significant signs" of an increase in legal male biomass.
When it comes to the health of the opie population, Bowers says trawl surveys and analysis of the male crab weights during the fishery are leaning toward quota increases.
"We could see some modest increases in 2009 and 2010," Bowers says. "But it could go down after that." — Charlie Ess
Prices, demand, product quality rise as industry gears up for MPA battle
Prices and demand are up, and sea urchin quality is better — in Northern California, at least — than it's been in quite awhile.
What does a sea urchin diver have to worry about?
Well, Southern California divers have had to fight bad weather. And now, harvesters are fighting simply for access as the state's Marine Life Protection Act mandates to create marine protected areas sweep through California.
Still, market conditions are promising. "What I'm hearing is that the market actually is fairly good," says Vern Goehring, executive director of the California Sea Urchin Commission.
Fort Bragg divers in particular have had a good year with landings and quality both showing improvement.
Ex-vessel prices this year in California have hovered around 54 cents a pound. That's up from the 48 cents a pound prevalent during the past two years but down from the 70-plus cents just five years ago.
Santa Barbara area fishermen haven't been as fortunate as their Northern California counterparts, Goehring says. Landings this year have been lower in Santa Barbara — California's leading urchin port — mostly because of unfishable weather.
"Quality, too, has been erratic," Goehring says.
Still, in 2007, Southern California landings far surpassed Northern California's. Southern California's worst total landings for a month, 401,174 pounds, in April, nearly doubled Northern California's best month of fishing, March, when divers caught 219,606 pounds.
Santa Barbara Fish Market owner Brian Colgate, quoted in a June online media story, affirmed Goehring's observations about quality. Channel Islands uni normally is of a good grade, thanks to the high quality of kelp in the area. But this year, the Channel Islands are in a low kelp cycle.
The size, roe color and consistency are such that wholesale prices have dropped for uni from the Channel Islands — and much of Southern California. It's led to a dearth of Grade A uni — "California Gold" as it's now known —on the domestic market.
The commission, seeking to standardize the uni grades, adopted three new ones to replace grades A, B and C.
California Gold uni has bright yellow or orange pieces and a firm, buttery texture; it's used in top-quality sushi. Premium California uni is less brilliant in color but still has a firm, buttery texture and sections that are whole but smaller; they're often used for sushi, soups, salads or combination dishes. Select California uni has a medium color with a tendency toward brown, a softer texture and may have some broken pieces.
The only problem is the Grade A-B- C-system is ingrained in processors' minds.
"We're trying to be a bit more user-friendly," Goehring says. "We're having a hard time getting processors to shift over."
Still, he's optimistic that once retailers and customers begin recognizing the new standards, the shift will come more quickly.
Marketing ideas like this take time, Goehring says. The commission doesn't plan to track the new standards' use, but he's heard anecdotal evidence there's been some effect just within the past year and a half.
The commission is trying to "ensure a good product by setting industry standards for temperature, diver handling, processor handling, grade standards and names," wrote Tom Trumper, a Fort Bragg diver, in a recent urchin commission newsletter.
In July, the California Department of Fish and Game agreed to let urchin divers fish more days during the summer. In the past, summer fishing has been significantly restricted, Goehring says — down to two days a week — thus lowering supply in the market.
"Now, divers can harvest four days a week," Goehring says. "We expect to be able to supply urchin throughout the summer months."
Urchin divers, like all fishermen, have been hit by higher fuel costs.
Still, the urchin commission, which is made up of harvesters, felt it necessary to establish a three-fold increase in its assessment on urchin landings. The January vote formalized the assessment of 3 cents a pound.
"Included in the increase is a dedication for not less than one-third of the assessment to activities seeking to protect access to sea urchin resources," Goehring said in a statement.
The commission has ramped up its visibility since it first formed in 2004, fostering more communication both within the industry and between the industry and consumers. Now it's also tackling the political issues, primarily marine protected areas. In April, roughly 20 percent of California's territorial sea in Northern California was proposed for MPA protections.
The commission expects the next two years to be tough, as the state will begin looking at the north central region that straddles San Francisco Bay and Southern California.
"[Southern California] is by far the most significant sea urchin harvesting area," Goehring says. — Susan Chambers
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