2017 Data Says Canadian Volumes Will Come Roaring Back
There are major changes in snow crab quotas projected for the Gulf of St. Lawrence in 2017.
The preliminary survey data done by DFO shows significantly higher crab biomass than expected. The data will be peer reviewed in February, at which time the biomass and exploitation rates will be set.
But the industry in the Gulf is talking as if it may see its highest total landings ever.
The snow crab market has shot up dramatically this year, as production fell in all the major areas.
Alaska declined from 30,000 tonnes to 18,000 tonnes from January 2015 to January 2016. This year, the decline continued, to 9,752 tonnes of live crab to be landed in January-February, 2017.
The Gulf of St. Lawrence produced 30,273 tonnes in 2016, vs. 34,430 tonnes the year before.
Newfoundland and Labrador produced only 39,000 tonnes, compared with 45,000 tonnes in 2015.
Altogether, the total production shortfall from these areas was 18,405 tonnes between 2015 and 2016, or a decline of 19 per cent.
Given that snow crab sales were excellent in 2015, a lot of momentum carried over into 2016 and the unexpected shortfall caused prices to shoot through the roof, to the highest levels ever.
For example, after trading between $5 and $5.50/pound for about 36 months, since last fall, Gulf snow crab prices have shot up 38 per cent to over $8/pound for spot quotes, when you can find crab.
This is about to change.
The Gulf crab stock has been very healthy, unlike in Newfoundland. Although there was a decline last year, the longer-term expectation was for a rebound in the mature crab biomass that could support a bigger fishery.
In the 2016 assessment document, Canadian scientists projected an expected biomass of 73,500 tonnes, for 2017 which would support an exploitation rate of 38 per cent — or a fishery on the order of 28,000 tonnes for the Southern Gulf. This is 6,000 tonnes more than in 2016.
But the survey data apparently is showing a much bigger biomass, up nearly 100 per cent, to around 98,000 tonnes. If this is confirmed and the fishery opened with the same level of exploitation as in the past, this could lead to 36,000 to 38,000 tonnes of crab, the highest landings ever recorded in the Southern Gulf.
This potential 14,000 to 16,000-tonne increase is enough to make up a big portion of the shortfall in snow crab experienced in 2016 in the U.S. market.
Potential quotas are not known for either Newfoundland and Labrador or the Atlantic fishery off Nova Scotia, but even with normal fluctuations, the probabilities now strongly suggest a big increase in snow crab availability next year.
A lot of shellfish products have exhibited high volatility in recent years. Shrimp went up 41 per cent and came down. Crab meat shot up 50 per cent and came down. Lobster meat is up 45 per cent and can’t seem to go higher. Snow crab is up 40 per cent.
The point is that once something changes in the market dynamic that is causing a shortage, prices react quickly. This is not something that is necessarily harmful to seafood sellers. You can make as much money selling a $5/pound crab as an $8/pound crab if everything is in balance. The problem comes for those holding high price inventory at the time the market dynamic changes.
This is no longer a good time to be holding high priced snow crab, if the indications from New Brunswick have any validity to them. Next spring, we are likely to see a market that is reacting to increases in volume and once again snow crab will support its traditional buyers — retailers who like the traffic it generates and restaurants and buffet houses who use it as a feature item.
So, don’t plan to abandon snow crab, the prices are going to come back to their more traditional range.
This article was republished with permission of John Sackton and seafood.com.
