LOBSTER GLUT
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Shucks Maine Lobster of Richmond, Maine. Shucks has developed a range of lobster products for national and international markets. It is one of the few lobster processors in Maine. The predominance of the Canadian lobster processing industry has left Maine reliant on it as a buyer of the early soft shell lobster. This year Canada and Maine have had early soft shells and very high catch levels. Market saturation has impacted the range of the american lobster. ©Photo by Sam Murfitt
For over 20 years, dealers have relied upon Canadian processors to take this excess product and the responsibility that comes with soft, unshippable lobster ... until this year. Not only did our unusually warm water not stop at the Canadian border, but like the US, Atlantic Canada had earlier and larger than usual landings. Maine’s lobster biologist Carl Wilson said he understood that Prince Edward Island, in particular, had “a bang-up spring.” Consequently, instead of processing our untimely US shedders in early July, Canadian processors either worked on their own early product or closed for vacation and maintenance.
“It feels like 2008 all over again,” Wilson said. “From a biological perspective, it seems to me we had an anomalously warm winter. That has set our coast up four to six weeks early.” Like October 2008, when the three Icelandic banks failed, “The reaction of the industry was the same,” he recalled: “You had people having pretty dramatic conversations up and down the coast. … We landed over 100 million lbs. last year,” Wilson said. He thinks this current glut, when tallied at the end of the year will probably end up being similar or even up a little bit from last year’s landings. It’s just that this normal hundred million lbs. is being landed in an abnormal cycle of timing, which is what Wilson thinks we’re in right now. In other words, he said, “I don’t think the population of lobsters suddenly exploded over last year. “Water temperatures are considerably warmer” he explained, “and so the timing is going to be different.”
Asked what he would attribute the increased landings to, the biologist replied, “Five to eight years ago we had several years of very strong settlement.” He stated that this strong settlement “was especially pronounced in eastern Maine.”
Using the years 2005, 2006, and 2007 as examples, Wilson said those lobsters take several years to come to legal size and to pass through the system. He then cited landings for the three eastern Maine Lobster Zones for 2008 through 2011:
Zone A in 2008: 13.5 million lbs., 2009: 16.0 million lbs., 2010: 19.5 million lbs., 2011: 19.8 million lbs.
Zone B in 2008: 7.9 million lbs., 2009: 10.0 million lbs., 2010: 12.1 million lbs., 2011: 13.1 million lbs. “That’s almost a doubling,” Wilson said.
Zone C 2008: 14.7 million lbs., 2009: 16.3 million lbs., 2010: 22.9 million lbs., 2011: 23.7 million lbs. He noted, “All three eastern zones: all three increasing.”
“From a biological perspective, it seems to me we had an anomalously warm winter. That has set our coast up four to six weeks early,” said Carl Wilson, Maine DMR. Wilson predicted this years harvest would be just slightly higher, it’s just that this normal hundred million lbs. is being landed in an abnormal cycle of timing. In other words, he said, “I don’t think the population of lobsters suddenly exploded over last year. Water temperatures are considerably warmer and so the timing is going to be different.” Maine DMR Graph
Catches proving Wilson’s point were absolutely staggering on Monday, July 16th, when fishermen hauled again, some after having their boats tied up for a week. Many hauled three times that day, which could have stopped up the lobster pipeline, but four buyers were able to take larger amounts because they have processing plants. Sid Look, of O. W. and B. S. Look Co., of Jonesport, a down east dealer estimated that Maine fishermen landed one-and-a-half-million lbs. on July 16th, “At least a million lbs.,” he said; “and I wouldn’t be surprised if it were 3 million lbs.”
A number of Maine dealers predicted that by the end of the year, the volume of landings would be considerably higher than last year’s 104 million. In fact, Sid Look, whose shedders were at least four weeks early, said his July 2012 landings were 60 percent higher than his July 2011 landings. But he said his July 2012 landings were not ahead of his August landings last year. He estimated an increase from 2011 of 15 to 20 percent. “At least 15 percent,” he said.
A mid-coast dealer said his July 16th catch was double that of a normal Monday because, he said, “The midcoast was the area of the coast most affected by the strike.” He predicted, “A substantial” increase in landings for the year if fishing continued unchanged, and when pressed, he estimated a 20 to 30 percent increase. He did state that there would be, “Some moderation in effort,” because “the pipeline cannot support a free-for-all catch.” He added, “The biomass population on the bottom —the snappers—must be staggering, from what we’re seeing.”
Portland dealer, Michael Coffill, Sales Manager for Ready Seafood Co. said, “We were about five weeks ahead of schedule when we started seeing enough shedders to split the price. Based on what he was seeing, his “rough guess” was that end-of-year landings would be up by 15 percent to 20 percent.
Asked to estimate year’s end landings, Kittery dealer Tom Flanigan, of Seaview Lobster said, “To me, we’re in uncharted territory. Up to now, it’s not been normal, but if from here on for the rest of the year we have a normal season in terms of volume (typically [mid-July] is when new shells would be starting in volume. Ours started down here at the end of April). If things last as long as they did last year, catch-wise, I would say we’re going to shatter landings [records].” However, he said, “We have guys telling me the only place they’re catching lobsters is where they normally catch them in September.”Flanigan, with one fewer boat selling to him, said he bought, “Close to three times in June what we bought [the previous June], and the vast majority of the increase was the new shells.”
With more and more lobsters being landed each day and no home or market for all of them, some dealers lost money with each animal they sent to processors. A dealer said he put $3/lb. lobster on a truck for $2.75/lb. days before the price had worked its way down to $1.50/lb. plus the bonus of 40 to 65 cents per lb. That unbelievable $2.10/lb. or $2.50/lb. seemed to make Maine fishermen realize they had to take action.
By August 13th, Walter Day had been tied up for a week after earning $2.05/lb. for shedders on Saturday, July 7th. Most other Vinalhaven fishermen tied up, too, after being paid $1.75 or $1.50/lb plus the bonus. “We are individual businessmen,” Day said, when asked how these prices affected his business. “We have a boat and gear. It is a business, and we have to operate in the black because unlike the federal government, we can neither print money nor tax it out of somebody, so we don’t have the choice of operating in the red; we have to operate in the black.”
After being tied up Monday to Wednesday, Day and more than a hundred fishermen met on Tuesday, July 10th. By this time Day said almost all Knox County was tied up. Stonington, in Hancock, was still fishing. The Vinalhaven fishermen held a second meeting on Wednesday, the 11th. At that meeting Day said they voted by a nearly unanimous show of hands to stay tied up till Monday, July 16.
Day and some other veteran fishermen who no longer have any payments to make said on the 13th, “We know that we can’t push this forever, but we figure by Monday we will have made a point to dealers that we can get together if necessary. But we do realize, too,” Day said, that young fishermen just getting into the business, despite having payments and young kids, although supporting the tie-up, have to go fishing. He said the dealers led fishermen to believe that they would be paid either $2.50 or $2.75/lb. to start, and that the base boat price would hold there. “We’re willing to work with them,” Day said of the dealers, “If they’ll meet us half way. It is [a first]. But right now, it’s not working for anybody, so what do we all have to lose?”
The dealer Day sells to told him he might only be able to buy for three days that coming week in order not to form a glut again, but he told Day it takes most fishermen three days to get through their gear. “If we can just bait once a week and get the $2.75,” Day said, “it’ll be better than going every day for $1.50/lb. [plus bonus.] We will be able to show a profit at $2.75.”
Cutler fisherman John Drouin, when asked how the low boat prices have affected his business, replied, “The glut and subsequent low price has definitely put a strain on my business.” But since the price crashed in 2008, Drouin said he has taken a good look at not only how he fishes, but at how he lives. He uses less bait than he used to, which saves money, and he has not noticed a decrease in his catch. “To save fuel,” he said, “I throttle back a bit and make sure I do not run out of my way for a small amount of gear, and waste fuel.” He said because he takes more care of his gear, he does not have to replace as much as he used to and said, “I am finding that years ago, a trap might last me five years, but now am getting 8 years or more!” And because he has no control over the price he gets for his lobsters, he said, “I have to take care of the money that I do get for them.”
Drouin feels that at 47 he is too old to try to do something else. He feels lobster fishing has been good to him. But he is upset at the greediness he sees in some fishermen and said, “This glut could have been prevented by the fishermen, but the greed factor kicked in, and fishermen were continuing to haul even though they knew the dealers couldn’t get rid of them.” He declared, “I also believe the glut could have been prevented if the dealers had done more over the years to create and establish more markets instead of relying on the Canadian processors to handle the softshell product.” He said, “It has been much too easy for dealers to just move the product along to the processors for their margin rather than actually “deal” in the marketing of lobsters.”
Stockton Springs fisherman and bait dealer Kenneth Wyman, Jr., said he didn’t know how his business had been affected because he always puts money away for a rainy day, but he said, “If we were getting another 75 cents a lb., that’s money we could be putting away that we were getting last year at this time.” His alternate plan is his bait business. “People are going to continue to fish regardless of the price,” he said, “so ultimately, I can continue to sell my bait.” Asked about longer term concerns, Wyman said,” In the future, if the price continues to do this, [I’d be concerned] that everyone would be willing to get together and make sure that everybody is treated the same: fairly. But, ultimately,” he said with a wry laugh, “we know that’s not going to happen because there are too many scabs in the world,” he said of those fishermen who crossed picket lines, so to speak, by going fishing when the majority were tied up. Wyman said, “Most people do what benefits themselves.”
Like Wyman, his friend, Deer Isle lobster fisherman Leroy Bridges, had left his boat tied up, but when the boat price sank to $1.50/lb. before adding in the bonus, Bridges announced, “We’ve reached a milestone: That is officially lower than I ever sold lobsters in my time fishing.” Thirty-six years ago, in 1976, Bridges’ first year as a commercial fisherman, he said he sold for $1.51/lb. The average price that year, according to the Department of Marine Resources, was three cents higher.
Asked how the glut and low boat price affected his business, Bridges replied, “For all intents and purposes, there is no business at that price.” He listed several projects he had planned to do this year that he decided to put on hold. He noted that those projects would have affected many different businesses and the employees who depend on jobs like those his projects would have supplied.
Asked if he had an alternate plan, Bridges replied, “I’m just holding a turn.” Holding a turn, he explained, “means you are just holding the end of the rope. You’re not pulling; you’re not pushing. Not lifting not lowering. That’s all Donna and I are doing,” he said: “we’re going through the motions. If they want to shut things down tomorrow, that’s finest kind. Our back-up plan comes into play at that point.”
The back-up plan is for Bridges and his wife to head off to their camp. He said he would check in with his dealer periodically and added, “That’s about all you can do.”
As for long-term concerns, Bridges said, “Part of my pent-up frustration is dealer-oriented.” He thinks fishermen do their part of this two-part lobster business, but said, “It certainly appears, by me, that the dealers have been extremely passive. They was all too happy just to load those things on the trailer and ship them to Canada; get their mark-up, whatever it is they’re marking the lobsters up, instead of aggressively marketing their own lobsters.”
But to Stonington fisherman Frank Gotwals, “The historical lack of trust in this industry is really damaging us right now. I don’t know the correct balance between competition and cooperation,” he said, “but right now we seem to be a little too competitive for the circumstances.” With everyone at the buying level trying to make up his loses, Gotwals said he suspects, “This low price will be in place for some time to come, assuming the market improves soon.” As for how lasting the impact will be, Gotwals thinks that is anyone’s guess. And like others, he said, “The lobster price has yet to recover from the 2008 collapse. Right now,” he declared, “volume is our savior and our curse.”
After what one lobster dealer referred to as, “Six weeks of crisis mode,” some fishermen still didn’t see that some dealers were trying to help. Although many fishermen, in their hearts, believe dealers deliberately keep prices as low as possible, some, like Vinalhaven’s Day, try to meet them half way. Unfortunately, the curse of volume showed its face on July 16th. A dealer reported that so many lobsters from that day’s 2,000-lb. hauls died on docks, “Nobody made any money. In fact,” he said, “They probably ended up in the hole.”