Northeast: Oysters
Drought conditions still plaguing Chesapeake Bay harvests, profits
Even if the three-year drought that's hammered watermen on Chesapeake Bay were to end tomorrow, it probably wouldn't have a positive impact on oyster harvest for three years. In other words, even if the region were to be struck with regular rainfall for the next several weeks, the upcoming harvest season, which begins in October and runs until March, will likely see a repeat of what happened last year.
In other words, oystermen on the Chesapeake can expect low production and low prices along with it. That's the opinion of Russell Dize, a waterman who operates a skipjack out of Tilghman, Md.
"We had low catches and we had a reduction in people who are harvesting. It looks gloomy for the upcoming year," Dize says.
The drought, which has reduced the amount of freshwater that flows into Chesapeake Bay and in turn has caused higher salinity, may increase the reproductive success of oysters. But it also increases the stock's vulnerability to dermo and MSX, diseases that have been perennial problems for oyster harvesters in Chesapeake Bay.
Unfortunately, the reduced production hasn't translated into higher prices. Last season oystermen were lucky to get $20 per bushel and were unlikely to get anywhere near their daily limit of 15 bushels per day per man.
"I've talked to some guys who were getting as low as five bushels per day," Dize says.
Ten years ago, watermen were getting $32 a bushel, Dize says. Things might improve with increased rainfall, but Dize is not making any bets.
No doubt about it, the drought has been pronounced. In 1998, the average discharge into Chesapeake Bay topped out at more than 80,000 cubic feet per second. In 2001 the discharge hovered at just above 40,000 cubic feet per second.
"As long as we've got this drought we're going to have problems," Dize says. "If and when that drought is broken, you're looking at three years. That's how long it takes native oyster to grow 3 inches."
In an effort to wrest a bit more profit from nature's bounty in the Chesapeake, the Maryland Department of Natural Resources has embarked on a habitat restoration program, with the stated goal of increasing oyster biomass in Maryland waters by a factor of 10 by 2010. The methods are twofold - introduce seed into areas where dermo and MSX are less of a problem and remove large infected oysters from the bay and then introduce uncontaminated hatchery seed.
"We're not going to be able to overcome the disease but we are trying to offset some of its impacts," says Tom O'Connell, oyster program restoration manager for the Maryland department. Last year the department planted 50 million oyster seeds in areas where dermo and MSX aren't as prevalent and by the end of 2002, 100 million seeds will be deposited in the bay, O'Connell says.
"That compares to 25 million a couple of years ago," he says.
Up north in Massachusetts, there isn't any concern about dermo and MSX. But there's been a slight problem with oyster shells that are causing localized mortality in some beds, although it's not a major concern.
"We are always having problems with oyster drills, but it's not any worse than usual," says Andrew Cummings, a Wellfleet, Mass., harvester.
Prices remain steady, with harvesters in some communities able to sell their oysters for as much as 75 cents apiece, Cummings says. Restaurants in the region continue to sell Wellfleet oysters for as much as $2 each.
"It's a good set," Cummins says. "Our growing season has been good, we haven't seen any major die-offs. Our wild and cultured stocks are going to be in decent shape."
Bill Walton, Wellfleet's shellfish constable, hears reports of prices between 40 and 75 cents an oyster.
"It really depends on the quality of the oyster," he says.
Ben Lloyd, owner of Boston-based Pangea Shellfish and Seafood Co., says that restaurant demand for oysters remains steady and even shows signs of improvement.
"Boston restaurants seem to be adding varieties to their menus," he says.
Oysters harvested in Wareham, Mass., have received a lot of attention from restaurant buyers in recent months, indicating that the Wellfleet will have some competition in upcoming seasons. Last year, harvesters in Wareham were getting between 25 and 40 cents apiece for their product.
"Prices are going to stay strong for the Wareham oyster," he says. "A few years ago it was unknown." - Dexter Van Zile
Pacific: Dungeness
Landings and health of stock hitting high levels, but prices fluctuating
Dungeness crab harvesters and processors in Washington sound like they've discovered the ecological equivalent of a perpetual motion machine when they describe what's happening to their fishery, particularly in Puget Sound. It seems the harder they fish, the more productive the resource gets.
Scott Kimmel, president of New Day Fisheries in Port Townsend, sounds almost incredulous when asked about the health of the crab stocks in the sound, but offers a theory regarding the increased production.
"It seems the more pressure there is fishing-wise, the better the resource does," Kimmell says. "Maybe it's because we're taking out all the males and leaving all the food for the females and younger crab to flourish. Certainly there's been record numbers of crab caught in the inside waters here."
Puget Sound crab harvest numbers demonstrate an undeniable increase in landings. In 1996, landings were at 6 million pounds. In 1997, landings in Puget Sound topped out at 7.1 million pounds. There was a two-year dip in '98 and '99 when landings dropped to 6.2 million and 6.5 million pounds respectively, but landings roared back to 8.2 million pounds in 2000, a total which jumped up to 8.7 million pounds last year.
"Since 1995, the catch has been going up and up and up in every single management district [in Puget Sound]," says Washington Department of Fish and Wildlife shellfish biologist Richard Childress, adding that coastal crab abundance is at historically high levels as well. "Some speculate it's because of declining salmon stocks [that] crab larvae are not being preyed on as heavily as they used to be."
If this indeed were the case, it would be a source of irony because the Monterey Bay Aquarium designates Dungeness crab as a "best choice" on its Seafood Watch list, based in part on its abundance, while putting wild-caught salmon from Oregon and Washington on its list of fish that should be consumed with caution because of ongoing concerns about habitat loss, pollution and overfishing.
Historically, crab prices have fluctuated between 90 cents and $3.25 a pound, Childress says, estimating on average that the prices are generally $1.60 a pound. Currently crabbers seem to do better according to how close they are to Seattle's live market.
Crabbers on Washington's coast are getting about $1.40 a pound, while crabbers in Alaska are receiving between $1 and $1.10 a pound and harvesters in Canada are earning about $1.25 a pound, Kimmel says. Port Townsend fisherman Ray Forsman says Puget Sound crabbers are getting about $1.75, but adds that he's seen the price shoot up as high as $3.30 a pound.
"There's a big live market that feeds off this crab on the inside here," Kimmel says. It holds up well. Live buyers like to get this stuff."
The price fluctuations Puget Sound fishermen experience make Forsman nervous because as the price increases, there's a point where the consumer will balk and stop buying the product. Dungeness crab may be a high-end product, Forsman says, but it appeals to people in every level of society.
"The price has to be fair across the board," Forsman says. "I like to make money as much as I can, but what happens when the price to fishermen starts passing $3 a pound? People start backing off and it usually crashes to $1.50.
"In the long run," Forsman concludes, "we're better off keeping the price stable."
Unfortunately for Dungeness fishermen, seafood brokers, the people responsible for setting the prices to the consumer, can shift back and forth between various seafood products, Forsman says. And because they have other options, the buyers aren't committed to keeping the price stable.
"If something goes wrong [with the Dungeness crab market], they can start selling other products until things come around again," Forsman says.
For the foreseeable future, Forsman thinks the crab is going to stay above $1.75 a pound, with some fluctuations. As far as stock abundance is concerned, he says there is every reason to think it's going to remain high, and that the increasing harvest levels may actually be a function of how the crabbers harvest their catch.
"Once you go into an area that doesn't have many crabs and start lobbing pots into the area, you start taking the big crabs off the block," Forsman says. "Once you start taking big crabs off the block, other crabs will molt and take their place, thinking 'Finally, I can get some food. I'm going to start growing again.'"
- Dexter Van Zile
North Pacific: Crab
Fishermen, processors assess fallout from 'two-pie' rationalization plan
Who's going to come out on top? That's the question perplexing the players in Alaska's crab fisheries as the North Pacific Fishery Management Council and industry members mull the fine points of comprehensive rationalization, a plan aiming to curb overcapitalization in the Bering Sea crab fleet.
Though the plan includes multiple components, among them an individual fishing quota program for harvesters, most concerns are over the prescription of individual processor shares, which would guarantee that 90 percent of the Bering Sea crab resources would be delivered to participating processors.
The processors - some of whom have witnessed severe shifts in the market share among buyers in Alaska's 7-year-old halibut and blackcod IFQ system - have successfully argued that their exclusion from the new licensing regime would leave them short of resources and hanging by the strings of their capital investments.
The fishermen, on the other hand, have been biting their nails over the possibility that guaranteeing processors the majority of the harvest could, in effect, kill competitive price bids for their crab. Moreover, they worry that the new system hinders the possibilities of new players entering the opilio and king crab fisheries with different - and perhaps more lucrative - marketing angles.
One of the stickiest issues for both sides consists of changes to congressional policy that could allow binding arbitration for ex-vessel price negotiations between harvesters and processors. Price setting under the new two-pie system would be decided by a third party after analyzing the economic status of the two sectors.
"Both sectors intend for prices to be negotiated rather than arbitrated," says Mark Fina, senior economist with the North Pacific Fishery Management Council, in Anchorage. "Binding arbitration is intended to provide a mechanism for determining reasonable contract terms only when negotiations break down."
Therein lies the problem: Both sides of the industry are no strangers to failed ex-vessel price negotiations - and the lengthy strikes that often follow. (Fishermen sat on the beach in protest of low dock prices in 1999 and 2001.) With that in mind, a key ingredient in the design of the arbitration system is that ex-vessel prices will be established well in advance of the respective fishing seasons. Another consideration is to provide the means to resolve multiple price disputes among processors and fishermen.
"Options currently on the table would accomplish this either through harvesters arbitrating collectively or through a process that would adjudicate several separate cases simultaneously," Fina says. "Other options would extend the benefits of the binding arbitration process to harvesters that did not participate in the process, to reduce the necessity for several separate proceedings."
What remains to be seen is how the comprehensive rationalization plan will affect market dynamics. Though economic stability has become the catch-phrase for proponents of the new management plan, some processors are betting that eliminating the race for fish will net the industry more dollars for the resource.
"You take time out of the equation," says one anonymous processor, "and it will allow for the most efficient marketing of the product." The processor adds that lengthening harvest periods will diminish the quest for throughput, which has been a priority in the past, and let companies devote more time to niche marketing in the United States and abroad.
Which wouldn't hurt the Bering Sea industry in terms of competition. Of late, the influx of snow crab imported from Canada has been rising, which has left domestic markets with plenty of volume despite lagging Bering Sea harvests. U.S. snow crab imports from Canada have more than tripled from 24.2 million pounds in 1998 to last year's 81.4 million pounds.
Whether increasing opilio's presence through niche marketing will translate to increased ex-vessel prices also remains to be seen. Last year's season went off without a strike when processors offered $1.40 per pound.
On the other side of the time equation, fishermen hope to enjoy longer, safer harvest seasons under the IFQ plan. The opilio fleet, which has averaged 250 vessels in the past decade, has been racing to fill harvest quotas that have slipped from a near-record harvest of 243 million pounds in 1998 to 30 million pounds last year. "The Bristol Bay red king crab season has lasted no more than one week since 1996," Fina says, adding that the opilio season has lasted less than a month in the past three years. - Charlie Ess
Gulf/South Atlantic: Stone Crab
Healthy demand, frozen shortages prime Florida fishery for price jump
Strong demand and a scarcity of frozen product are coinciding to produce market conditions that should favor Florida stone crabbers when the season opens. After the generally dismal 2001-02 ex-vessel prices, crabbers will certainly be awaiting the opening prices with great interest come Oct. 15.
Ex-vessel prices for the 2001-02 season averaged $5.95 a pound for all grades, down 18 percent compared with $7.27 the previous season and 33 percent lower than the $8.87 for the 1999-2000 season.
Robert Palma, manager of the Lobster Connection in Marathon, one of the major buyers in the Florida Keys, expects strong demand and decent prices come October.
"We don't have anything much frozen in the market," he says. "I think it may be a strong beginning for the fishermen. It's going to start strong."
Last season's opening came about a month after the terrorist attacks on the World Trade Center and the Pentagon, and seafood markets nationwide were reeling. Stone crab, heavily dependent on tourism at the restaurant and retail level, was harder hit than most. Even so, the Sept. 11 excuse for low ex-vessel prices was beginning to wear thin with fishermen by the time the stone crab season ended in May 2002.
However, the 2001-02 season did bring heavy production, with landings of 3,430,049 pounds, down slightly from the 3,543,423 of the previous year but still the third-best harvest of the past 12 seasons, according to statistics from the Florida Marine Research Institute.
"Prices were down to the ground," Palma says. "The west coast [of Florida] had a lot of production. There was a lot of product."
Travel industry trends suggest a recovery for stone crab prices. Tourism industry surveys early in the summer showed a slow but continuing recovery from the Sept. 11 effect, with Americans planning to fly less to foreign and exotic locations and drive more to domestic destinations. An increase in domestic tourism should benefit local retail outlets for stone crab, such as Joe's Stone Crabs in South Beach, Miami, and also restaurants and retail seafood houses in the Florida Keys, which mostly depend on tourists traveling by car.
Brenda Johnson, whose husband, Kit, is one of the top stone crab producers around Everglades City in southwest Florida, says dealers in her region also are reporting a scarcity of frozen product.
"There's not much frozen," she says. "We've been told that, that there aren't any in the freezers."
Ex-vessel prices dropped sharply after last season's opening and just never recovered, says Johnson, who keeps the books for the family business.
"I think we were getting about $5 on average" for all grades combined throughout the season, she says. "The prices were so terrible everywhere… They just didn't pay the price for them."
Last season's low ex-vessel stone crab prices may have been a market anomaly brought about by an unusual combination of events fishermen are hoping won't be seen again. The Sept. 11 attacks, heavy production and a disastrous spiny lobster season - with landings off by 60 percent or more in many places compared with those of the previous year - all combined to stifle prices. Johnson says that she believes that some buyers may have been trying to recoup spiny lobster losses by keeping the stone crab ex-vessel prices low.
Consequently, crabbers are now hoping the spiny lobster season, which opened on Aug. 6, will rebound sufficiently to set a strong market tone for the stone crab season, which will open roughly two months later. Economically, the two fisheries are closely related: Many fishermen trap both stone crabs and spiny lobster, and many dealers are heavily dependent on both fisheries.
Another change that occurred in the stone crab market during the past season appeared at the retail level. There were some retailers who increased the spread between ex-vessel and retail prices, Johnson says.
"This was the first year they doubled the price for retail," Johnson says. "This year if you sold the crab for $4, they sold that crab for $9.95. The restaurant price and the retail price never failed.
"There was a big demand," she says. "They sold it all."
If demand holds or increases during the 2002-03 season, fishermen are going to expect a bigger cut of the action, or the rumblings of discontent over sorry ex-vessel prices - whatever the cause - are likely to grow to a roar. - Hoyt Childers
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