Lobster fishers feeling the pinch

By Clayton Hunt

FOR THE SOU’WESTER

The Atlantic lobster is referred to in many parts of the world as the 'King of Seafood.'

However, the 'King of Seafood' may feel more like a prince this year as lobsters are not fetching the same prices per pound in 2008 as they did in 2007, and harvesters are definitely feeling the economic pinch as a result. Jeff Roberts, a lobster harvester in Hermitage, N.L. said that lobster prices are down about 35 per cent this year as opposed to opening season prices in 2007.

"Prices for lobster started off at $6.25 per pound in 2007 and leveled off for most of the season at $5.25 a pound," Roberts said. "This year's starting price is set at $4 a pound and there are rumours that prices may drop even lower."

Roberts said that the drop in prices means that lobster fishers have already lost a significant amount of money, which will add up to hundreds of thousands of dollars before the 2008 season is over.

"The ever-increasing cost of a lobster operation, especially the increased cost in fuel, combined with the lower prices means that some fishers lost from $3,000 to $4,000 in the first week of the new season,” said Roberts.

In early May he said most fishers may be able to take these losses now as catch rates are high, however, some harvesters are already saying they may not be able to fish an entire lobster season this year as the operating expenses will remain the same while lobster catches decrease as they usually do as the season progresses.

"The lobster fishery was always the mainstay for fishers who have a lobster licence, but it won't be that way for many of us this year,” added Roberts. “It's going to be hard from an individual point of view and from a regional viewpoint as well because there are 300 lobster licences from Rencontre East to Burgeo, and the combined losses will be an economic setback for the region."

Roberts said in his opinion, the biggest problem in the industry is that there are too many middlemen involved in getting the lobsters to the marketplace.

"The lobsters change hands three or four times from the fish harvesters to the marketplace and everyone wants a piece of the pie," he said. "Someone has to lose out and it's going to be the harvesters. I personally think that the buyers lost a bit of money last year and are determined to get it back in 2008."

Roy Cox, a lobster fisherman in English Harbour West, N.L. is one of the lobster fishermen in 3Ps feeling the pain of lower lobster prices in 2008.

"I lost over $5,000 in the first week of the new season as opposed to the same time last year," Cox said. "There are many fish harvesters in Fortune Bay who rely on lobsters for 75 to 80 per cent of their yearly earnings, so a lot of us are going to be affected negatively by the downturn in prices."

Cox said that as the lobster season continues the catch rate decreases and he might not be able to go through a full nine-week season this year.

"I can't survive on $4 a pound as opposed to the $6.50 and $5.25 we were getting for lobster last year. The FFAW/CAW does not negotiate the price for lobsters and buyers set their own prices. I don't think our local buyers are the problem, but it's the bigger boys who say what will be paid to harvesters," Cox said.

"We're getting the same prices for lobsters that we got 20 years ago. We spend anywhere from $600 to $700 a week for gas and there are other expenses. When you have two partners in a boat, the lower prices means less money for everyone,” he added. “By the end of the season we could be going in the hole and actually be losing money. Young people won't stay in the fishery and we'll lose them to Alberta.”

Cox said government officials will have to take a serious look at this issue and will have to help fishermen like they help the western framers when they face serious economic challenges.

Sid Stoodley in Harbour Breton, N.L. said the drop in lobster prices in 2008 is affecting lobster fishermen in his area of Fortune Bay.

"With the drop in prices, I can understand why some harvesters may not fish the entire season. At the end of the day, after all expenses are paid, you may have a little bit for yourself or you may actually be losing money. It may not make sense for some of us to stay at it this year," he said. "A lot of people don't see what's happening to the fishery with higher expenses and lower prices for our catches, but I see what's going on and it's not a pretty picture. People won't stay in the industry if they are not able to make a decent living."

Chesley Lambert who fishes out of Harbour Breton agrees that the drop in prices will make 2008 a difficult year for harvesters.

"Losing 30 to 35 per cent of your main fishery income has got to hurt," Lambert said. "It will be especially tough for a number of fishers who are fishing for two different households. It will get to the point, with a decrease in catches later on, that some of us may be just working to pay expenses."

Lambert noted that while he does not have a definite solution to the problem, he agrees with Roberts and Cox that there are too many buyers in the lobster industry.

"There are too many buyers and everyone is in the game to make a living. The thing is, of course, is that it will be the fish harvesters who will take the brunt of a downturn in price which are blamed for a slowing down of the American economy. I'd say the profit margins of the buyers are the same as they were in 2007," Lambert said. "It's the same old story every year. We're talking about these issues and concerns after the start of the fishery. The problems should be addressed somewhat before the season gets underway so that some issues may be solved before fishers actually go on the water."

Jim Cox is one of the local buyers who purchases lobsters from fish harvesters in Harbour Breton.

"I've been in this business for 19 years and I can tell you that it's the market that determines the price of lobsters each year. I don't determine the price and the big companies don't determine the price. I know some fishers say buyers are ripping them off, but that's not true," he said. "I wish I could pay more to lobster harvesters. I want them to stay in the industry because I want to remain in the business, too. Lobster prices are down all across Atlantic Canada this year as the American economy is facing a recession and the value of the Canadian dollar is actually higher than the American dollar.

"One reason why lobster prices may be less in Newfoundland is that buyers have to pay into the workman's compensation program and pay 100 per cent of EI to fish harvesters,” he added. “Buyers in other Atlantic provinces don't have to do this."

Lobster prices down in Atlantic Canada

According to Tom McLane, an official with Goldwater Seafoods in Halifax, N.S., lobster prices are down all across Atlantic Canada this year. He noted that lobster fishermen in Nova Scotia are getting $5 to $5.50 a pound, down significantly from 2007 prices.

"There are plenty of good, quality lobsters this spring and the markets are flooded. The price of gas to exporting companies is also a factor causing lower prices. The high Canadian dollar also hurts exporting companies as they don't make as much, or anything, on the dollar exchange rates now," McLane said. "The high Canadian dollar especially hurts large companies who may send hundreds of thousands of pounds of lobster to the United States each week."

Apparently, it was the exchange rate on the Canadian dollar that kept lobster prices high over the past number of years, but that is changing now as the U.S. greenback has fallen in value as compared to the Canadian dollar.

For example, it was not all that long ago that when a Canadian company sold lobster in the U.S. for $5 a pound, they actually received, in some cases, $8 a pound because the American dollar was much higher in value than the Canadian loonie.

McLane said that a solution to the problem of different prices in the lobster fishery in different areas of Atlantic Canada is for everyone involved in the fishery to get on the same page and set a price each year that everyone would abide by.

"There's an awful lot of competition in the lobster industry. Getting everyone on the same page is a problem for a small area let alone the entire Atlantic Canada region," he noted. "There is no uniformity in the industry right now, and this is a problem that may take a while to fix."

(Clayton Hunt is a journalist with Transcontinental Media’s Coaster newspaper, which is a contributor to the Sou’Wester.)