“Growth is never by mere chance, it is the result of forces working together” — James Cash Penney, founder, JC Penney.
The American businessman and department store entrepreneur might have been referring to the retail sector when he uttered those words decades ago, but one could argue that the same adage could be applied to the current Atlantic Canadian fishery.
The last few years have proven very lucrative for both seafood harvesters and processors in our region. One only has to look at the recent record-breaking price per pound increases of the two gems of the Atlantic Canada seafood realm — lobster and snow crab. And this trend shows no sign of stopping. In fact, lobster fishermen in Nova Scotia are currently getting north of $16/pound for their catches, while rumours are rampant about $10/pound snow crab on the horizon for the season soon to upon us.
Only a few short years ago, such price speculation would be put into the same category as the Toronto Maple Leafs hoisting Lord Stanley’s Cup. But it just goes to prove that when the right forces merge, anything is possible. So, never lose hope you loyal Buds fans out there.
But what factors have led us to this point where the commercial fishery is seeing nearly exponential growth? Are we not still mired in the middle of global pandemic? Why is it that in a period where many businesses are struggling to keep afloat, the fishery is hitting it out of the park?
Part of the answer might be related to that once-in- a-century COVID-19 pandemic.
Pivoting has become one of the most-used or over-used pandemic-related catchphrases.
The Globe and Mail recently described the word like this: “Whatever its shortcomings, there is no denying the word’s popularity. It has appeared in more than 1,200 articles in this newspaper, or roughly 2.5 times every day, since the World Health Organization declared a pandemic in March 2020. (It appeared in 760 articles in the same time frame prior to the pandemic). It has been used to describe everything from financial markets adjusting to the pandemic to people adopting new careers to entrepreneurs forced to find new ways to pay the bills. Like it or not, we now live in the age of pivot and it will continue to define our lives long after the pandemic.”
Over the last two years, the global pandemic has changed consumers’ spending and eating habits creating major upheavals with the economic theory of supply and demand. But how did this lead to growth for the seafood sector, but demise for others? Our sector was able to pivot.
Seafood analyst and Navigator contributor John Sackton summed it up like this: “I have a theory about why we did so well in comparison to some other industries. I think the reason is that the pandemic supply disruptions that did occur played to our strengths. We have always operated with an uncertain supply chain. For example, a stock forecast for cod or Alaska pollock is suddenly revised, or a quota is missed and significant volume evaporates. Or a Christmas lobster season begins in Nova Scotia and bad weather keeps the fleet in for 10 days in December. Or Dungeness openings are delayed due to domoic acid readings or meat fill issues. Or major shrimp production areas are hit with a disease outbreak. Or Icelandic cod fishing is suddenly cut back. All of these things happened in our industry prior to the pandemic, so those who are responsible for supplying programs and meeting customer needs know how to plan for uncertainty and how to work around these problems. What happened last year was we had to do this on steroids. In most cases, it was not production issues, but logistical and factory operations that caused problems, especially with the bottlenecks that developed in China. The good news is that the demand was so strong that the cost increases resulting from these disruptions were understood by our customers and for the most part they kept purchasing as prices rose.”
With consumers wary of eating out, the seafood industry was able to shift its focus to grocery and retail sales as restaurants, casinos and cruise ships reduced capacity or shut down entirely. People seemed to shift their spending from travel to culinary treats, such as lobster, enjoyed at home with their shut-in families.
And now, as the world slowly opens up and consumers start making plans on living with the new COVID-19 endemic normal, look for the seafood industry to pivot yet again as consumers start traveling and eating out more.
So, what will that mean for seafood prices as this market shift will probably lead to even more demand? Chances are they will continue in the same upward trajectory currently being witnessed. And this does not even factor in other market influences such as Alaska reducing its 2021–2022 snow crab quota by a staggering 88 per cent — from 45 million pounds to 12.4 million pounds. The resulting spin-off for local snow crab fishermen from this unprecedented quota cut could be staggering — in a good way for a change.
And speaking of staggering, that word could certainly be used to describe last season.
For example, according to preliminary statistics from Fisheries and Oceans (DFO), in the first 11 months of 2021, the value of snow crab in Newfoundland and Labrador reached $612 million — a 174 per cent increase compared to all of 2020. While in the Gulf of St. Lawrence, snow crab landings nearly doubled in value to $310 million.
In Newfoundland and Labrador, the value of lobster at the wharf was $82 million — a $38-million or 87 per cent increase.
In the Maritimes region, scallops in 2021 were worth $145 million — up $18 million or 14 per cent, even though landings were six million kilograms lower up to the end of November. And the value of reported halibut landings in the Maritimes was $37 million, a 15 per cent increase over 2020.
Let the pivoting continue.
