LOBSTER PROCESSING: THE STRAIGHT STORY
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Tank room at Linda Bean’s Maine Lobster in Rockland, ME. Crates of lobster are kept at low temperatures to reduce shrinkage. Some of these lobster will be shipped live and others processed in another part of the operation. Bean’s processed lobster is cooked and shipped frozen. ©Photo by Sam Murfitt

 

The headline, “Clawing back to lobster dominance,” made two presumptions: That there has been a battle for lobster processing dominance between Canada and Maine and that Maine used to be dominant. Both are wrong.

Although Maine residents have been delighted to see two new businesses come to the state and like the idea of processing Maine lobster in the state instead of shipping it to Canada, they are quick to say there has never been a battle for dominance in processing lobster. Also, Maine was never dominant in terms of processing volume, though Maine’s two experienced lobster processors, John Norton, of Cozy Harbor and Jeff Holden, of Portland Shellfish, have been in business since the 1980s. Holden said most Maine processors use cryogenic freezing, which produces the highest quality product available. John Hathaway, of Shucks Maine Lobster, uses a high-pressure water-immersion method also used by two Canadian processors.

And it’s never been a case of “us and them,” as the Globe story asserts. Rather, dealers say when the annual shedder glut hits each summer, it’s more a case of, “What would we do” or “Where would we be without the Canadian processors?” Everyone involved, from the fisherman who sells his shedder catch to the wharf owner, or the co-op manager who must then find a buyer for those “jellies,” “rags,” and, “paper bags,” is grateful to anyone willing to buy that fragile, short-lived animal. Most often that buyer has been the Canadian processor.

Tangier, Nova Scotia, live-lobster dealer, Stewart Lamont objected to McKim’s story because of its errors and because, he said, it “misses some of the critical aspects of the lobster trade generally, and thereby has a slant that is most unfortunate.” He summed up McKim’s story by writing that it suggests:

1. Canadian lobster processors have gained control over the Maine lobster price and catch to an astonishing degree over time and

2. Maine companies are now countering this trend with various efforts to develop a ‘local’ lobster-processing capability in New England. The spirit of the effort is reflected by the inimitable Linda Bean who declares: “I would like to see us get outside the grip of Canada and be independent like we used to be in Maine ... They've had us by the throat.”
Lamont continued, “If only the story were true, or in any way reflected accuracy and reality, but unfortunately, in many respects it does not.”

The body of McKim’s story contained eight errors and she quoted one person out of context. The piece also raised several questions about developing processing capability in Maine having to do with the number of jobs created, their duration, and the pay scale, to rumors floating around Gouldsboro (Prospect Harbor is part of Gouldsboro) concerning supposed low pay and non-residents making up many of the new hires.

But Live Lobster executive Antoinette Lilienthal said her company pays its hourly employees a base of $9 to $13 per hour. Healthcare, taxes, Social Security, Workmen’s Compensation, Unemployment, and other benefits end up bringing the cost of that hourly wage to Live Lobster of from $16 to $18/hr. Robert Bayer, Ph.D., executive director of the Lobster Institute at the University of Maine, noted that unlike US processors, “Canadian processors don’t pay health care. It’s paid for by the government and by taxes.”

Holden said he finds the numbers ($9 to $13/hr) to be right in line with what other processors pay, as did Hathaway who said that he also pays frequent overtime. Lilienthal added that Bumble Bee also paid its hourly employees $9 to $13/hr.

As for the processing jobs being seasonal or permanent and whether non-residents were taking jobs from area residents, Lilienthal said line workers might have to be laid off in January, when there is practically no fishing, but that the jobs are permanent, and line workers earn a couple of hours at time-and-a-half pay each day.

Antonio Bussone, Live Lobster president, said,“Well over 90 percent of our employees in Gouldsboro were former Bumble Bee employees.” Lilienthal also stated that many former Bumble Bee and other employees from the area don’t want to work on weekends and they don’t want to have to work the second shift. She said the two Mexican workers living in Milbridge hired by Bussone had not previously worked for Bumble Bee, but “are willing to work on weekends and to take the second shift.” She said,“They are good workers.” Although employees can earn more and prefer doing piecework, Lilienthal said, for now, while they are being trained, they are paid by the hour. “When we get the kinks out, we'll be able to offer piecework.” she said.

Error #1: In the first paragraph, McKim wrote: “... For years fishermen and others here [Rockland] say Canada has been engaged in a kind of identity theft ...because much of the lobster caught in Maine waters is shipped across the border to be processed, packaged, and sold as a product of Canada.”

But the same thing is true of lobster trapped in Canadian waters, according to Lamont and Bayer. Canadian lobster, too, can be shipped across the border, processed, packed, and labeled Product of Maine. Doing so isn’t right, but it’s legal because the laws of both countries permit it and because Canadian and American lobsters are the same species: Homarus americanus.

Lamont wrote McKim in response to that remark, “Canada has certainly not been engaged in ‘identity theft,’ no more than has America.” He explained that “separating US product from Canadian product, whether in the live format or the processed format, is devilishly difficult, unfortunately.” He went on to say that he doesn’t think the problem of being able to identify the products of the two countries is “sufficient excuse [for the law] in the long run.” But he also said, “It has been sufficient to allow the practice thus far,” and added, “It’s called international trade, not “identity theft.” To which Bayer added, “ ‘Country of Origin’ labeling requires that the product (Mazzetta’s processed Maine shedders) will be labeled at PEI as Product of Canada.

From the standpoint of consumer protection, Lamont said he and many others think all lobster sellers, “Should have to identify the product based upon where it was harvested.” But the idea, he wrote, is, “Politically unpopular in the industry, and therefore not likely to change.”

Error #2: Referring, in the second paragraph, to the US lobsters Canadians buy and process, McKim wrote, “Canadian businesses are able to largely dictate the price,….” But Spiros Tourkakis, executive vice president of East Coast Seafood, the largest lobster company in the world, finds the word “influence” more accurate than McKim’s dramatic, “dictate.” A knowledgeable lobster professional wrote, “Processor demand is what really determines the boat price.” To which statement Bayer added, “Supply and demand dictate the price.”

Error #3: In the third paragraph, McKim wrote, “Now, some local entrepreneurs are trying to take back the processing business, …” “How can Maine take back what it never had?” asked another industry professional. In the first place, according to Lamont and corroborated by Holden, Canada has roughly 30 to 35 lobster processors, a handful of whom have 300 to 400 employees. Maine has Portland’s Cozy Harbor and Portland Shellfish, each with some 100 to 125 employees; Shucks, in Richmond, with five year’s experience and 78 employees; and the two new processors. Chelsea, MA-based Live Lobster has hired 55 line workers at its Prospect Harbor plant where hiring and training continue. But all the hourly workers employed by US processors put together only make up the workforce of one of the big Canadian processing companies. With such a limited workforce, some wonder how McKim, or Bean for that matter, think the US could possibly “take back” the processing business from Canada?

Error #4: in the fourth paragraph, Referring to the shedder part of the 94 million lbs. Maine fishermen trapped last year, McKim wrote, “... about half of the catch went to Canada.” Actually, just about anybody in the industry could correct that statement. It’s always been between 60 and 70 percent of the US post-molt, poor quality, and thus far less expensive product, that demands immediate attention from those 30 to 35 Canadian processors.

Bayer simplified the question of the amount by writing, “More than half goes to Canada.” He then wrote, “During late fall through the spring, Canadian hard shells supply our live market.” He summed up the argument by writing, “The bottom line for me is, the US and Canada need each other and should work together for the good of all.” As Lamont wrote, “The bulk of American activity in lobster has been in live trade, given the ideal logistics solutions from Boston and New York that... live lobster export companies enjoy. Processing lobster has been a Canadian tradition for nearly 100 years.” Bayer noted, “The first lobster processing was done in Canada by Emile Paturel.” He added that Paturel, whose name continues on in the seafood company Paturel International, partner (sister) to East Coast Seafood, was a contemporary of the American Clarence Birdseye, who discovered how to flash freeze fish while ice fishing in Labrador from 1912 to 1915.

As for Error #5, in paragraph 5, McKim wrote, “…much work needs to be done if Maine is to wrest control of lobster processing from Canada.” Given that it takes all those 30 to 35 Canadian processors to process that annual glut of Maine shedders, and as Lamont noted, “Canadian processing plants, typically employ 300 to 400 individuals to run through the product on a daily basis.” He stated, “Given the cost of setting up and the learning curve associated with the business, it will take years and years for any American processors to really compete, much less thrive.”

Error #6: To Bean’s quote that Canada has, “Had us by the throat,” Lamont wrote, “I simply wish that Linda Bean and others would not engage in rhetoric that has no basis in fact.” He added, “Fortunately, Ms. Bean’s views do not carry the day with the vast majority of American lobster dealers.”

Error #7: In paragraph 16, McKim wrote, “It wasn’t until 2008 that many in Maine realized the extent of Canada’s role in lobster processing,” which brought the following rejoinder from a veteran lobster industry reporter: “If Maine only realized the extent of Canadian processing a few years ago, where the hell were they? Everyone knew it.”

Error #8: (same paragraph) McKim then added, “Wholesale lobster prices plummeted by about a dollar a pound in Maine—to about $2.50 directly off the boat—and fishermen struggled to pay their bills.” But Commercial Fisheries News’s “Lobster Market Report” for October 2008 reported a drop in the boat price to $1.75/lb. briefly, the same price reported after the terrorist attacks of 9/11/2001. Mostly, though, when the three Icelandic banks that had financed the Canadian fishing industry failed, the boat price dropped to a low of $2 per lb., not $2.50.

Finally, in paragraph 11, McKim quoted Maine Lobstermen’s Association executive director Patrice McCarron out of context, having her say, “People woke up and said, ‘How much of our lobster is going to Canada?’” when in reality, McCarron said her remark had been said in the context of the lobster industry at large finally understanding what that really means to our industry, not so much the fact that it is happening.

In conclusion, Atlantic Canada does not fish its post-shed or post-molt product because it is so far away from the large live lobster-shipping centers of Boston and New York. The US, and Maine in particular, with its proximity to those shipping centers, therefore, dominate the live lobster market. As Lamont wrote, “Processing lobster has been a Canadian tradition for nearly 100 years.”

Canada built its strength on its skill in processing the weak, shedder product and, therefore dominates the processor market. As for the US catching up, much less dominating the processing of lobster, Lamont said, “As a practical matter, Maine processing of lobster in a serious volume, in my opinion, is a highly unlikely scenario in my lifetime.” But that is beside the point because he added, echoing Bayer, “It is a time when all lobster stakeholders should be working together to build value in the enterprise.”

 

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The Long Road to Modern Lobster Processing



According to A. Gordon Dewolf, the first Canadian lobster cannery was constructed in Eastern New Brunswick at the mouth of the Miramichi river in about 1845. By the 1850s the invention of the stamped can had resulted in the packing of many foods in hermetically sealed tins that were shelf stable, and this opened up new market opportunities for lobster. This is when the Canadian government began the process of regulating the lobster fishery in an effort to protect the resource from over-fishing.

By 1872, there were between 40 and 50 lobster canneries in Canada and, by 1900, there were over 700 (as high as 900 reported). Canning lobster overcame some of the challenges of transporting lobster to market, resulting in the value of canned products surpassing the value of live shipments by the end of the century.

Lobster processing continued in the form of canning “hot pack“ lobster meat (using small canner lobster) until the 1970s when refrigeration was introduced. This “new” technology revolutionized the industry as lobster meat was now placed in cans and frozen in a new product called “cold pack” lobster. The quality of frozen lobster meat was much higher than hot pack meat resulting in increased demand for lobster meat. Refrigeration also permitted the development of other frozen lobster products and since the late 1970s, the vast majority of processed lobster products has been in frozen form. Frozen lobsters in brine or “popsicle” lobsters were introduced to the European market in the 1970s. This is a retail product that consists of a whole cooked lobster in the shell that is individually frozen in a bag with brine added for protection. This remains a popular product in Europe during the Christmas holidays.

In the 1980s processors introduced frozen raw tails to the restaurant and food service market. This was a major development for lobster processors as it became a very popular and profitable product that was less labor intensive than lobster meat. This development opened up new markets in the United States away from the traditional “Boston” market.

The introduction of cryogenic freezing, or quick freezing using nitrogen or carbon dioxide tunnel freezers in the 1980s permitted the development of a range of new products.