Tuesday, February 12, 2013

Exploring challenges and opportunities of the lobster pricing structure

Last summer, the price of lobsters fell to almost record lows — as low as $2.99/lb. in some markets. Although low lobster prices meant good news for consumers hosting lobster bakes near the beach, it caused some financial hardships for lobstermen who weren’t receiving much money for their efforts. Seacoast lobstermen are concerned that this price drop is becoming a yearly trend that could eventually push many of them out of the business.

The N.H. Sea Grant/UNH Cooperative Extension Sustainable Marine Fisheries Program hosted a Fisheries Roundtable on Feb. 11 from 5:30-8 p.m. at the Urban Forestry Center in Portsmouth, N.H. to discuss this chronic collapse of lobster pricing structure. About a dozen local lobstermen, dealers, and NHSG/UNHCE specialists attended the meeting. The goals of the roundtable were twofold: to improve the understanding of the mechanisms behind the annual collapse in prices and to generate ideas for possible alternative strategies that might help address the problem.

Attendees discussed their thoughts about the causes of the low prices. Many felt that the large numbers of lobsters — particularly in Downeast Maine and Canada where there is a glut of them — and lobster quality were important factors driving the cost down.

With warming ocean temperatures earlier in the spring, lobsters shed their shells a month or two earlier than usual, before the time when tourists would be visiting and eat these “shedders.” Many of the processors are overloaded at that time of year (the height of fishing season in Canada) and so cannot help process all the shedders that are brought in. For those lobsters that can be processed, the prices are often slashed to move them out the door faster.

“Low prices help to move lobsters, but go too low and you do brand damage,” said Brett Taylor, a lobster dealer from Taylor Lobster in Kittery, Maine. “Then if you want to increase the price, people think it’s too expensive when it goes back up to normal prices.” 

Seafood dealers pay more money for hardshell lobsters than for softshells or lobsters with older shells that appear “beat up” because consumers generally prefer the hardshells. However, softshells are more readily available and cheaper in the Seacoast region than hardshells — and by most accounts, the meat is sweeter than that of hardshell lobsters, too. Perhaps what is needed is a better marketing campaign to help get the word out about these often-overlooked lobsters, some attendees suggested.

Some lobstermen noted the selling lobsters directly off their boats could help increase their prices, as some consumers enjoy going down to the docks and interacting directly with the lobstermen. However, selling directly off the boat could damage the relationship between lobstermen and their seafood dealers.

One lobsterman noted that many of the younger generations aren’t interested in cooking and preparing live lobsters in their homes anymore — they prefer lobster that is ready to use. A value-added product, such as the lobster ravioli manufactured by the Portsmouth Lobster Company, could tap into those consumer markets.

Gabby Bradt, NHSG/UNHCE commercial fisheries specialist, noted that if lobsters were banded with the N.H. Fresh and Local brand, it might help increase demand locally. Many attendees noted that local restaurants often buy their lobster from Canada, but perhaps they could be convinced to use N.H. lobsters on their menus instead.

Roundtable attendees agreed that future steps likely involve collaboration with the Seacoast groundfishermen to come up with solutions to better market the fish species and lobsters that are still available.   This collaboration would merge lobstermen and groundfishermen into a coordinated marketing campaign – 2013 N.H. Fresh and Local Seafood -  that was discussed at a NH Sea Grant/UNH Cooperative Extension meeting last week.

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