Northeast Scallops

Overseas demand and conservation measures send prices through the roof

Tightened supply, strong domestic prices and overseas demand are keeping scallop prices jacked beyond levels even optimistic industry observers expected. Early spring surges pushed prices past $17 a pound in New Bedford, Mass., when Asian buyers came shopping.

MarketReports 240pxTallIt's anticipated that the U.S. system of rotating area closures to conserve scallops for future growth will take the Northeast harvest down around 10 percent from 2013 numbers. With supply tightening, scallop imports to the American market are likely to increase, even as a recovering world economy spurs buyers to snap up the available high-quality U.S. product, experts said at a National Fisheries Institute marketing conference in January.

Sure enough, by late March auction prices for U-8/10 scallops hit $17 to $19 a pound in New Bedford. In March 2013, prices were around $13, up from $9 to $10.50 in 2012, according to NMFS price reports.

Global demand for scallop imports shot up nearly 19 percent in 2013 over 2012 totals, the United Nations Food and Agriculture Organization reported. The Asian market drives most of that growth now. And like the American Scallop Association, which earned Marine Stewardship Council sustainability certification in 2013, suppliers to European and American markets are working hard to become similarly certified.

The New England Fishery Management Council has implemented Framework 25 to the scallop management plan for 2014. The one-year measure is designed to sync up management with the new stock assessment being done this summer. Based on what biologists are seeing in closed areas, it's anticipated that the allowable biological catch will rise again for 2015.

For example, "there is a substantial amount of biomass within closed scallop access areas in the Mid-Atlantic, and there is a high degree of confidence that biomass will be there in 2015 and beyond, based on recent surveys," according to a New England council summary.

Under the council's preferred plan, Mid-Atlantic grounds like Closed Area 1 on the Elephant Trunk and the Hudson Canyon east of New Jersey would remain closed. Fishing mortality had been underestimated in recent years, but a 2014 correction could in time hike industry revenues by $60 million, according to the council's plan.

The council in June was readying other measures to conserve smaller scallops off the Delmarva Peninsula. Scallop numbers on the historically rich grounds had dwindled but may be on the upswing.
Numbers of young scallops there dropped off after 2008. But they began coming back in 2011, and that trend continued through 2013. NMFS and Virginia Institute of Marine Science surveys show large numbers of two-year-old scallops in those areas.

Fleet consolidation sharply boosted per-vessel revenue after 2008-09. That shakeout of small general-category day boats angered many captains, feeling the limited entry plan unfairly cut them out.
In 2010 full-time scallop vessels averaged around $1.4 million in revenue, with full-time small dredge boats averaging around $1 million. By 2012 those numbers rose to $1.6 million and $1.2 million, based on numbers the council estimated from dealer reports.

Those prices are helping survivors in Maine's inshore scallop fishery, which last year had its strongest season since 2009 and highest value since 1998.

Preliminary numbers from the first month of the December-March season show the 2013-14 season may be better, says Trisha DeGraaf, resource coordinator for the Maine Department of Marine Resources scallop program.

"Those December numbers looked very good" at 138,450 pounds, up 14,000 pounds from December 2012, DeGraaf says. They are the highest since mandatory reporting began in late 2008. But because of late reporting the season's full story won't be known until early 2015. — Kirk Moore

Alaska & Pacific Halibut and Blackcod

Scant supplies bolster blackcod price; halibut offerings rise as the quota falls

Scant blackcod supplies in Japan are offsetting a weaker yen to the dollar and firmed up ex-vessel prices a bit for Alaska and West Coast longliners. Another drop in halibut quotas, meanwhile, promises to hold ex-vessel prices firm throughout the 2014 season.

Last year's lower blackcod ex-vessel prices were tied to the slipping Japanese yen, which began falling from 79 to the dollar in autumn of 2012 and hasn't yet recovered. It fell to 97.8 in April 2013 and by this April had weakened to around 102.5.

Blackcod ex-vessel prices fell likewise. Fish 7 pounds and up delivered to Seattle slipped from $8.50 per pound in 2012 to $5.25 per pound in 2013.

Despite the devalued yen this year, however, the health of the markets in Japan — where around 90 percent of Alaska's blackcod wind up — appears to have recovered.

"Blackcod prices have been rising early in the year," says Bob Alverson, general manager of the Fishing Vessel Owners' Association in Seattle. Processors were paying between $4.90 per pound for 4-pounders and $6.75 for fish 7 pounds and up.

"The market is clean, and inventory is about right," Alverson says.

Scott Adams, operations and production manager with Hallmark Fisheries in Charleston, Ore., seconds that observation.

"There's no real inventory in Japan that I see," he says. Information on blackcod supplies in cold storage holdings overseas comes by way of anecdotal accounts from the folks who U.S. processors supply. Still, the general consensus is that last year's crop has left the freezers, leaving markets hungry for fresh supplies.

Adams says blackcod ex-vessel prices along the West Coast in April ranged from $3.85 for 3- to 4-pounders up to around $5.25 per pound for 7-ups.

Whether the firmer prices will counter a lower blackcod harvest quota remains to be seen. The 2014 quota has been cut from 2013's 28.01 million pounds to 23.68 million pounds.

Meanwhile, halibut quotas are dropping again. But unlike last year, the lower supply is bolstering ex-vessel prices.

In January, the International Pacific Halibut Commission dropped the overall coastwide total for the United States and Canada from 31 million pounds in 2013 to 27.5 million pounds this year.
Alaska's share of the coastwide limit stands at 19.7 million pounds, down from 23 million pounds last year, according to commission data. This year Area 2C in southeastern Alaska waters and Area 3A in the central Gulf of Alaska are subject to a new catch-sharing plan NMFS is implementing.

The Area 2C combined commercial-guided sport quota is 4.16 million pounds. Under the plan, Area 2C longliners can take 3.32 million pounds.

In Area 3A, the combined quota is 9.43 million pounds. Of that total, longliners can harvest 7.32 million pounds. Longliners plying Area 3B waters in the western gulf, meanwhile, will work on a quota of 2.84 million pounds.

As fewer flatties have been recruiting into the fishery, Alaska's harvest limit has been dropping. It fell from the 2012 quota of 25.5 million pounds to 20 million pounds in 2013.

As of May, ex-vessel prices remained healthier than last year. Even though the quota was cut last year, too, halibut's price point had reached its zenith, and ex-vessel prices subsequently dropped.

"Halibut are doing well," says Alverson. Ex-vessel prices reached the high $5 per pound mark for the smaller halibut to $6.50 for the 40-pound-and-up flatties delivered in Seward, he says, while Bellingham prices topped out slightly higher at $7.25.

By contrast, ex-vessel prices for halibut delivered in Alaska during May of 2013 stood at $5.35 per pound for fish weighing 10 to 20 pounds, $5.65 for fish from 20 to 40 pounds and
$5.90 for 40-ups. That's down a bit from the splits of $5.65, $5.90 and $6.56 during 2012, when consumer demand spiked peak offers to exceed $7 per pound.
— Charlie Ess

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