SEAFOODNEWS.COM (by John Sackton) — May 13, 2014 — It is another rocky start to the lobster season, as slow sales over Mother's day cause a backup of market lobsters.
This morning prices have come down in both the North Shore of Nova Scotia, and Southwest Nova Scotia to around $4.25 for market lobsters- the same price as in PEI.
This has infuriated lobster harvesters in Nova Scotia who were getting $5.00 to $5.25 as recently as ten days ago.
To harvesters it looks like the market is in free fall, despite the fact that cold water has kept landings at a reasonable pace.
Unfortunately, landings in the live segment of the business have to pretty much match sales or there is an immediate reaction, and it seems like dealers built up inventories they had planned to sell for Mother's Day weekend, and in many cases the sales just did not materialize as they hoped.
As a result, some dealers of live lobster are looking to sell their markets to processors in PEI and New Brunswick for further processing, meaning that the processing price is now driving the market.
Part of the recommendation of the government panel on the Maritime lobster industry was for a Maritime wide price; but most probably thought that would bring the price up, rather than down.
Nova Scotia buyer Brian Newell, with RBN Fisheries Ltd., told CBC that a lot of lobster is now coming on to the market and that's also driving down prices.
“There are thousands of vessels fishing, and also in Maine, all the boats are fishing. The price in Maine is $4.50 a pound to the boats, [and that’s the same for fishermen on] Grand Manan, Deer Island, Madeleine Islands and Newfoundland,” he said. There are some reports that prices came down another 25 cents in Southwestern Nova Scotia since he spoke.
Although most canner lobsters go to processing, how market lobsters are handled depends very much on the region. But in all regions, including Maine, which is developing processing capacity, when the live market is saturated, lobsters that can't be held in live inventory due to cash or quality reasons will go to processing.
As a result, the shore price comes down to what the major processors can afford to pay.
From a harvester's point of view this sometimes looks like a conspiracy – but to packers it is often a question of what their financing allows them to buy and hold.
Another factor this year in the Maritimes has been strains on the financial credit available for some buyers, which would also quickly ripple through the market to drive down the price.
Speaking to one processor about what was happening in the market this morning, he said "ask the mothers." The basic problem is they are not eating enough lobster.
This story originally appeared on Seafood.com, a subscription site. It is reprinted with permission.