Lobster market meltdown could mean $100 million loss to local economy

By Kathy Johnson

FOR THE SOU’WESTER

NovaNewsNow.com

Worries are growing on both sides of the border over what is going to happen with the southwestern Nova Scotia lobster fishery.

“The big question down here is will the Canadians hold back rather than start shipping right in at a low price?” said Bill Adler, executive director of the Massachusetts Lobstermen’s Association.

“If they ship to Boston now, they’re not going to get much of a price,” said Adler. “We don’t need any more lobsters here and it’s not like we’re having a bonanza catch. There’s nothing going out the front door. I had a guy call from Cape Cod yesterday who was told by a dealer ‘don’t bring in anymore. I can’t take them.’”

Among the factors that have contributed to the glut on the American market is that Canadian processors “are not coming down as exuberantly as they were in the past,” said Adler. “They were the ones that kept things moving.”

Declining orders and credit problems in a troubled economy has led to the decrease in demand for lobster products.

“There just isn’t the demand in the marketplace to fill orders and processors are not willing to build inventory because they can’t afford the risk,” said Gerry Amirault, executive director of the Lobster Science Centre at the Atlantic Veterinarian College in P.E.I..

“The markets are too volatile. All the factors are so extreme that nobody wants to process on speculation,” said Amirault. “Because of the credit crunch and lack of available credit it’s too risky for people to process product in hopes somebody needs it.”

Amirault estimates that the processing sector will only buy about “one-third of what is normally purchased” during the approaching lobster season. “Fishermen are going to find this year the processing sector won’t be there to the degree they have in the past,” he said.

“For southwestern Nova Scotia to get $50 to $100 million less into the economy in the next six months…that’s the magnitude of the situation we have to realize,” said Amirault.

Processors usually purchase an average of 10 million pounds of lobster during the season, providing a market for soft-shelled and damaged crustaceans, said Lockeport dealer Mike Cotter.

“If we can’t sell to the processors where are they going to go?” he asked. “How are we going to sell 10 to 15 per cent of the catch in December that is soft-shelled or damaged?”

The demand on the live lobster market isn’t much better. While there have been numerous lobster promotions throughout the U.S. over the past several months in an attempt to move product, “People are not in the lobster eating mood,” said Adler. “We’re moving some but not enough to empty out the inventory. There’s not enough people jumping on it to make a dent.”

Besides the live lobster market in the U.S., overseas marketing is also going to be “very, very tough” this year, said Cotter.

Cotter said dealers and buyers would be meeting prior to the start of the season to see what the overall picture looks like and to get a better idea of the situation. “This is going to be tough year for everybody.”

If fishermen would band together and not land soft-shelled lobsters during the opening weeks of the season “it would help the industry and the markets out so much,” said Cotter. “We need the fishermen to bring in what the markets want.”

Given the severity of the situation Amirault said the industry needs to address the problem cooperatively, “We’re concerned about the survival of all sectors of the industry,” he said. “This is a collective industry problem. Lets work together and listen to each other.”

Going into the season, shore prices in the U.S. are anywhere from $2 to $2.75 a pound, and in the $3.50 to $4 range in the Upper Bay of Fundy.

For American fishermen it’s the lowest price since 1992, and for Canadian fishermen, since 1989, but as Amirault pointed out, “It isn’t how much you get per pound, it’s how much you retain at the end of the day.”