Alaska has shut down its snow crab fishery for the second year in a row due to another major population drop, leaving some to wonder how this may play out in the snow crab market going into 2024.
According to market analyst John Sackton, this sudden population dip won’t have much of an effect, if any.
“There’s so much [snow crab] coming out of Canada in the Gulf and Newfoundland that there’s going to be plenty of snow crab around,” said Sackton. “The only thing that would change the market right now is if there is a big drop in the quota for 2024, but scientifically I haven’t seen any indication of anything like that.”
With snow crab marching on in the state it has resided in for the past couple of years, Sackton said there is not much cause for celebration for any stakeholders in the market. According to his analysis, snow crab prices are reportedly at a 25-year low when adjusted for inflation.
“You can go back to 1998, and that’s where the price levels are today if you take inflation into account. If you look at the history of snow crab, it’s very, very valued on the lowest end of the scale right now,” said Sackton. “You shouldn’t just focus on whether the prices are $6 or $5.50. Where it’s really at is at the lowest part of its price range.”
In the United States, which takes up roughly 90 per cent of Canadian snow crab exports, the average discounted price for five-to-eight-ounce sections of snow crab is $7.99/pound (USD). These low prices, according to Sackton, don’t leave much room for growth in market conditions in the 2023–2024 season.
“If the retailers are selling this crab at $7.99, what does that translate back to for the packer? To the harvester? You’ll see that it’s going to translate back to about where the market is right now,” said Sackton.
If the price of crab is to ever go up again, he asserted that more value must be created in the market. According to Sackton, traditional marketing tactics like advertising and attending trade shows won’t cut it anymore, and Canadian snow crab needs to find new avenues in order to see real market growth.
“To create value, we need to really find a new group of people who love snow crab and get them to start buying it,” said Sackton. “If you want to look at one fishery that’s been very successful at creating value, it’s oysters. The oyster industry has doubled its production and the prices have been stable, and the net result is that the demand for oysters is taking anything that anybody can produce.”
The reason behind the success story of oysters is a resurgence in popularity among younger demographics, many of whom don’t consume much other seafood.
“That’s an example where new value was created. I don’t know what the answer is in terms of snow crab, but I think it’s important to really try to think outside the box, so to speak — really trying to think of not doing what we did in the past, only doing it better, but trying to figure out what can we do that’s really new,” said Sackton.
One solution, according to Sackton, is to make crab more accessible and easier to eat. Given that one of the fastest-growing portions of the frozen lobster market is lobster meat out of the shell, thanks to consumers’ propensity for products like lobster rolls, he said following the lobster playbook could be a smart move in creating value-added products. However, snow crab meat would face competition that lobster meat does not, namely blue crab.
“If there was a way to get crab products into a quick, easy-to-eat, not taking the shell apart item, that has some possibilities. But there, you have to be dealing with all the other crab meat that is available, whereas with lobster meat you don’t really have that same level of competition,” said Sackton. “It’s very important to try to think about new things and not expect it’s going to be a one-year campaign.”
With Newfoundland and Labrador’s Association of Seafood Processors and the Fish, Food and Allied Workers Union agreeing to work on a pricing formula well before the start of the 2024 snow crab season, Sackton said both processors and fish harvesters need to look at real market prices and not project values. He suggested that it can be hard to come to a mutual consensus about what those projected prices are going to be in the first place.
“If there’s some way of pricing the raw material off of the actual sales value as is actually achieved in the market, I think there is a better chance that we’ll get agreement,” said Sackton.
“Everyone can agree the market price is too low, but at least we recognize that what’s hurting the value of crab in Newfoundland is a low market price, not that somebody’s manipulating the market or trying to get an advantage by trying to pay less at the dock. So, I just feel paying attention to the actual price is really important.”
