Lobster industry waiting ‘with bated breath’ on US product hitting the market
(Original link: https://www.undercurrentnews.com/2017/06/26/lobster-industry-waiting-with-baited-breath-on-us-product-hitting-the-market/)
Following a tough spring season for Canada's lobstermen, the industry is waiting to see what effect US lobster will have on high prices once it starts entering the market in the next few weeks.
Canadian fishermen faced a colder-than-normal spring this year, which meant less lobsters in traps.
"Lobster has been a mess this spring," Inland Seafood chief operating officer Bill Demmond said. "The season in Canada was terrible. The water temperature was too low."
Demmond estimated the season brought in about 60% of what was caught last year.
"That's put everyone under the gun on lobster. There's not much frozen inventory," he said.
According to another source who wished to remain unnamed (source A), buyers decided to keep prices up as a result of poor catches.
Prices to boats began at CAD 8 ($6.04) per pound, source A said. As catches started to improve in May, prices dropped closer to CAD 7/lb ($5.27), which is "still a big leap over last year."
"Prices were still CAD 1/lb to CAD 1.50/lb higher than last spring," he said. "The catches got better later on, but buyers are still paying much more because prices were set early on."
Demmond also said prices to boats are about CAD 0.50 higher than last year.
Another source, who also wished to remain unnamed (source B), said that although these prices are not unheard of, the level they are at now is highly uncommon for this time of year.
"It's not a record, but for this time of year it's very high," he said.
Lobstermen waiting on US season
Although there are still areas in Canada that will be open to fishing, the bulk of the season ends at the end of May, leaving the industry dependent on New England for product.
"We're all sort of waiting for the US shedders to hit, that will give everyone a chance to increase cold storage," Demmond said.
According to source A, when this happens, more of the market will be softshell product -- as hardshell comes mostly from Canada -- and will push prices of existing hardshell lobster higher.
However, some wonder if the market will accept such high prices for hardshell.
"I expect the market will get pushed higher, but we'll see if the market accepts it," source A said. "When you pay CAD 1-CAD 1.50 more, there's no guarantee you're going to sell them at a profit margin. I think it's going to be a tough market for the seller."
Demmond also said the high prices have some worried.
"We're all waiting with bated breath in the US, waiting to see how [the New England season] will affect prices," he said, "we can't afford to process at this price."
Source B said "everybody's walking on tiptoes and being very tentative."
High raw material prices have pushed up prices for all lobster products, with meat prices high and tail prices also increasing.
According to source A, fresh lobster meat is going for $30/lb-$35/lb, frozen is priced at between $25/lb to $30/lb, and tails from $13.25/lb to $20/lb.
"Two to three years ago, the prices would have been significantly lower," he said.
According to Demmond, prices for meat fell between $24/lb and $30/lb, depending on its composition.
"We think they're going to stay high this year. I don't think they'll stay where they're at, but I do think prices will be up 50 cents to a dollar over last year," he said.
As for tails, Demmond said the price for smaller tails might fall a bit, but overall tail prices have been high. For six to seven ounces he said he has heard prices as high as $19/lb, which is "very high."
Source B said once US lobster production starts it will be easier to see which way the market goes.
"At this point I don't know how much they're going to increase, but I don't see them going down," source B said.
Following a tough spring season for Canada's lobstermen, the industry is waiting to see what effect US lobster will have on high prices once it starts entering the market in the next few weeks.
Canadian fishermen faced a colder-than-normal spring this year, which meant less lobsters in traps.
"Lobster has been a mess this spring," Inland Seafood chief operating officer Bill Demmond said. "The season in Canada was terrible. The water temperature was too low."
Demmond estimated the season brought in about 60% of what was caught last year.
"That's put everyone under the gun on lobster. There's not much frozen inventory," he said.
According to another source who wished to remain unnamed (source A), buyers decided to keep prices up as a result of poor catches.
Prices to boats began at CAD 8 ($6.04) per pound, source A said. As catches started to improve in May, prices dropped closer to CAD 7/lb ($5.27), which is "still a big leap over last year."
"Prices were still CAD 1/lb to CAD 1.50/lb higher than last spring," he said. "The catches got better later on, but buyers are still paying much more because prices were set early on."
Demmond also said prices to boats are about CAD 0.50 higher than last year.
Another source, who also wished to remain unnamed (source B), said that although these prices are not unheard of, the level they are at now is highly uncommon for this time of year.
"It's not a record, but for this time of year it's very high," he said.
Lobstermen waiting on US season
Although there are still areas in Canada that will be open to fishing, the bulk of the season ends at the end of May, leaving the industry dependent on New England for product.
"We're all sort of waiting for the US shedders to hit, that will give everyone a chance to increase cold storage," Demmond said.
According to source A, when this happens, more of the market will be softshell product -- as hardshell comes mostly from Canada -- and will push prices of existing hardshell lobster higher.
However, some wonder if the market will accept such high prices for hardshell.
"I expect the market will get pushed higher, but we'll see if the market accepts it," source A said. "When you pay CAD 1-CAD 1.50 more, there's no guarantee you're going to sell them at a profit margin. I think it's going to be a tough market for the seller."
Demmond also said the high prices have some worried.
"We're all waiting with bated breath in the US, waiting to see how [the New England season] will affect prices," he said, "we can't afford to process at this price."
Source B said "everybody's walking on tiptoes and being very tentative."
High raw material prices have pushed up prices for all lobster products, with meat prices high and tail prices also increasing.
According to source A, fresh lobster meat is going for $30/lb-$35/lb, frozen is priced at between $25/lb to $30/lb, and tails from $13.25/lb to $20/lb.
"Two to three years ago, the prices would have been significantly lower," he said.
According to Demmond, prices for meat fell between $24/lb and $30/lb, depending on its composition.
"We think they're going to stay high this year. I don't think they'll stay where they're at, but I do think prices will be up 50 cents to a dollar over last year," he said.
As for tails, Demmond said the price for smaller tails might fall a bit, but overall tail prices have been high. For six to seven ounces he said he has heard prices as high as $19/lb, which is "very high."
Source B said once US lobster production starts it will be easier to see which way the market goes.
"At this point I don't know how much they're going to increase, but I don't see them going down," source B said.
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