Two things have combined to help both the snow crab and lobster fisheries avoid the worst-case scenarios that were feared back in April.
First, government stimulus programs and employment benefits have protected consumer spending to a large extent. And what people are not spending going out, they are spending on the seafood they crave when they see it priced aggressively at retail.
So, we have the strongest snow crab market seen in years and we have a good recovery of interest in frozen lobster. In both cases, lower prices helped spur this demand and now the market is extremely active. It is being driven by huge increases in retail seafood sales.
The snow crab harvest season is ending, so what is currently in inventory will have to provide the bulk of sales over the next nine months, except for imports from Russia and Greenland.
But the lobster season is not ending at all.
It is shutting down in the Gulf of St. Lawrence after a short extension to July 4, but then it opens up in Maine. So, we will see a continuous flood of live lobster coming ashore, including a lot of new-shell lobster.
The Maine Lobstermen’s Association, seeing the low prices in Canada this spring and the prospect of the lowest prices since 2012 and 2013 in Maine, is searching for any reliable and acceptable way to slow the pace of landings.
Some of the ideas include raising the minimum carapace size, not harvesting culls, or not fishing one day of the week. All of these have their downsides and detractors as well, so it is more likely than not that the season will proceed full bore, with only economics being the brake.
So, the question becomes will the buyers be there?
There are some signs that they will be, at least initially.
As one producer said, “thank our stars that the Northeast is opening and has the virus under control. If we had to shut down during the summer, the loss of tourism would be a disaster.”
We are seeing restaurant visits crash in places like Houston, Los Angeles and Miami, where the virus is now surging out of control. But these are not locations that consume a lot of lobster in the summer. Instead, most of that consumption is concentrated in the Northeast.
Secondly, retail demand for well-priced seafood is still off the charts.
What has sustained the frozen lobster business is a huge interest at retail for lobster tails. Even meat, which had been in the doldrums, is seeing a pickup in interest with outdoor dining and seasonal tourism.
The major Canadian lobster producers in New Brunswick have solved their foreign worker problems with workers now past quarantine and borders open for them again. There is no longer the labour shortage that was such a constraint at the beginning of the season.
Thirdly, the level of interest is giving producers confidence.
Their orders are off the charts from retailers in some cases, now that lobster tail prices are back in the $16–$17 pound range.
So, this year in Canada, buyers are primed to take Maine lobsters once they start coming ashore, provided of course that prices are competitive with what has been experienced this season in Canada.
This means the Maine lobster industry is at least halfway to a survivable season, with tourism and Canadian purchases both looking favorable.
Finally, a lot of lobster processing will be done in the U.S. as well, as the U.S. producers are seeing the same strength of retail demand for lobster tails. Also, there is strong demand for whole cooks to sell overseas.
On a macro basis, frozen seafood has fared better than fresh or live seafood during the pandemic. With lobster, it will be the strength of the frozen market that will allow the fishery to continue at a survivable level for at least the next few months.
After the summer though, all bets are off.
If the unemployment bonuses are not extended, or if stimulus direct to consumers is curtailed, spending could fall off a cliff.
We are not out of the woods, but due to the strength of frozen lobster demand, it seems like we can survive another month or two, as Maine gets going in earnest.
This article was republished with permission of John Sackton and seafood.com.
