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Lobster Glut Slams Prices
Some Fishermen Keep Boats in Port; Outside Maine, No Drop for Consumers
By JERRY A. DICOLO and NICOLE FRIEDMAN
Matthew Healey for The Wall Street Journal Lobster boats sat dormant Saturday in Vinalhaven, Maine, as fishermen react to low prices.
Before sunrise last Monday, in a parking lot by the water in Winter Harbor, Maine, a gathering of lobstermen came to a rare consensus: prices were too low to go fishing.
"I've never seen them tie up [their boats] as a group like this before," said Randy Johnson, manager of the Winter Harbor Lobster Co-op. The 30 vessels in his co-operative have remained in port for a week straight.
"I'm looking at all their boats as we speak," he said Friday when reached at the co-op, which sits across the bay from Bar Harbor "They all have a cut-off point [in price] where they can and can't fish," he said. "It's an impossible situation."
Harbors up and down the coast of Maine are filled with idle fishing boats, as lobster haulers decide that pulling in their lobster pots has become a fruitless pursuit.
Prices at the dock have fallen to as low as $1.25 a pound in some areas—roughly 70% below normal and a nearly 30-year-low for this time of year, according to fishermen, researchers and officials. The reason: an unseasonably warm winter created a supply glut throughout the Atlantic lobster fishery.
Those prices have officials and lobstermen concerned about the fate of one of the state's most vital industries. "For some people it will be disaster, they are going to go bankrupt," said Bob Bayer, director of the Lobster Institute at the University of Maine.
Retail lobster prices in Maine have started to fall along with the glut, and Mr. Bayer said that some fishermen have begun selling lobsters out of their trucks for as low as $4 a pound. But consumers elsewhere in the U.S. aren't likely to see bargains. The Maine lobsters that currently are in season can't be shipped long distances due to their soft shells, and retailers have other fixed costs that limit big price drops.
"There could be a small effect, but I wouldn't expect much," Mr. Bayer said.
Lobsters are a $300-million-a-year industry in Maine, according to Halifax, Canada, consulting firm Gardner Pinfold. Along with Canada, Maine's thousands of independent lobstermen supply the vast majority of the world's clawed lobsters, which have seen a population boom over the past three decades due to rising water temperatures and overfishing of cod and haddock, their main predators.
Profit margins are low even in good years, but this summer the problem has intensified. The wholesalers that buy directly from lobstermen are paying less than it costs for many boats to turn a profit.
"Anything under $4 [a pound], lobstermen can't make any money," said Bill Adler, head of the Massachusetts Lobstermen's Association, which publishes a weekly report on lobster prices in the U.S. and Canada.
Enlarge Image
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Matthew Healey for The Wall Street Journal Lobsterman Joe Hutchinson stacks traps.
Related
Mr. Adler, a former lobsterman, said the warm winter had two effects. It allowed Canadian lobstermen, who typically fish in the early spring, to bring in large catches due to the mild temperatures. And the lobsters that Maine fishermen catch in the summer months—the ones that can't be shipped live due to their softer shells—arrived six weeks earlier than normal.
"The month of June might have been a record in the state of Maine for catch," said Peter Miller, a veteran lobsterman from Tenants Harbor. His business is struggling despite traps that have brought in hauls four times larger than normal.
The price slump has led some lobstermen to take drastic action. Patrick Keliher, the Commissioner of the Maine Department of Marine Resources, said his agency has investigated reports of lobstermen coercing others not to go out fishing in an effort to lower supplies and raise prices back to more normal levels.
"Frankly, there were some fisherman that were trying to bully some people into not fishing. Most of it was veiled threats, and as soon as we started hearing about it, I made sure patrol was aware," said Mr. Keliher.
On Monday, Mr. Keliher issued a statement warning that threats to cut lobster traps loose or force lobstermen to stay in port "will be met with targeted and swift enforcement." He added that any attempts to impose a broader fishing halt "may be in violation of federal antitrust laws."
A shutdown is already taking place though, according to some Maine residents. In Knox County, which has several hundred licensed lobstermen, boats have stayed tied to their moorings for over a week, said Diane Cowan, executive director of the Lobster Conservancy in Friendship, Maine.
"I don't know how they came to agree on this," said Ms. Cowan. "The boats are all at their moorings and all the lobster traps are all in the water."
Ms. Cowan has lived in Friendship for 14 years. The town of about 1,200 residents has two churches and two lobster co-ops. Its harbor, which typically is filled with the sound of diesel engines as roughly 200 lobster boats motor in and out of the bay with their catches, has gone silent.
"I live on the water. All the boats are tied up, and it's absolutely quiet and peaceful," said Ms. Cowan.
While many are hopeful that prices will recover along with demand as tourists head to Maine for lobster boils and seafood festivals, some worry this season could have a lasting impact.
Mr. Miller, of Tenants Harbor, works with his three brothers, all of whom learned the business from their father. His son has joined the family trade, along with two cousins. But after 38 years, Mr. Miller says the job is not what it used to be.
"It's not a good business right now," said Mr. Miller, who frequently tells his son to switch jobs. "My catch is ahead of last year, but my checkbook says I'm not doing as well."
Write to Jerry A. DiColo at [email protected] and Nicole Friedman at [email protected]
A version of this article appeared July 16, 2012, on page A3 in the U.S. edition of The Wall Street Journal, with the headline: Lobster Glut Slams Prices.
Copyright 2012 Dow Jones & Company, Inc. All Rights Reserved
This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit
www.djreprints.com
Join the discussion 10 Comments, add yours More In Business »
Some Fishermen Keep Boats in Port; Outside Maine, No Drop for Consumers
By JERRY A. DICOLO and NICOLE FRIEDMAN
Before sunrise last Monday, in a parking lot by the water in Winter Harbor, Maine, a gathering of lobstermen came to a rare consensus: prices were too low to go fishing.
"I've never seen them tie up [their boats] as a group like this before," said Randy Johnson, manager of the Winter Harbor Lobster Co-op. The 30 vessels in his co-operative have remained in port for a week straight.
"I'm looking at all their boats as we speak," he said Friday when reached at the co-op, which sits across the bay from Bar Harbor "They all have a cut-off point [in price] where they can and can't fish," he said. "It's an impossible situation."
Harbors up and down the coast of Maine are filled with idle fishing boats, as lobster haulers decide that pulling in their lobster pots has become a fruitless pursuit.
Prices at the dock have fallen to as low as $1.25 a pound in some areas—roughly 70% below normal and a nearly 30-year-low for this time of year, according to fishermen, researchers and officials. The reason: an unseasonably warm winter created a supply glut throughout the Atlantic lobster fishery.
Those prices have officials and lobstermen concerned about the fate of one of the state's most vital industries. "For some people it will be disaster, they are going to go bankrupt," said Bob Bayer, director of the Lobster Institute at the University of Maine.
Retail lobster prices in Maine have started to fall along with the glut, and Mr. Bayer said that some fishermen have begun selling lobsters out of their trucks for as low as $4 a pound. But consumers elsewhere in the U.S. aren't likely to see bargains. The Maine lobsters that currently are in season can't be shipped long distances due to their soft shells, and retailers have other fixed costs that limit big price drops.
"There could be a small effect, but I wouldn't expect much," Mr. Bayer said.
Lobsters are a $300-million-a-year industry in Maine, according to Halifax, Canada, consulting firm Gardner Pinfold. Along with Canada, Maine's thousands of independent lobstermen supply the vast majority of the world's clawed lobsters, which have seen a population boom over the past three decades due to rising water temperatures and overfishing of cod and haddock, their main predators.
Profit margins are low even in good years, but this summer the problem has intensified. The wholesalers that buy directly from lobstermen are paying less than it costs for many boats to turn a profit.
"Anything under $4 [a pound], lobstermen can't make any money," said Bill Adler, head of the Massachusetts Lobstermen's Association, which publishes a weekly report on lobster prices in the U.S. and Canada.
Enlarge Image
Matthew Healey for The Wall Street Journal Lobsterman Joe Hutchinson stacks traps.
Related
Mr. Adler, a former lobsterman, said the warm winter had two effects. It allowed Canadian lobstermen, who typically fish in the early spring, to bring in large catches due to the mild temperatures. And the lobsters that Maine fishermen catch in the summer months—the ones that can't be shipped live due to their softer shells—arrived six weeks earlier than normal.
"The month of June might have been a record in the state of Maine for catch," said Peter Miller, a veteran lobsterman from Tenants Harbor. His business is struggling despite traps that have brought in hauls four times larger than normal.
The price slump has led some lobstermen to take drastic action. Patrick Keliher, the Commissioner of the Maine Department of Marine Resources, said his agency has investigated reports of lobstermen coercing others not to go out fishing in an effort to lower supplies and raise prices back to more normal levels.
"Frankly, there were some fisherman that were trying to bully some people into not fishing. Most of it was veiled threats, and as soon as we started hearing about it, I made sure patrol was aware," said Mr. Keliher.
On Monday, Mr. Keliher issued a statement warning that threats to cut lobster traps loose or force lobstermen to stay in port "will be met with targeted and swift enforcement." He added that any attempts to impose a broader fishing halt "may be in violation of federal antitrust laws."
A shutdown is already taking place though, according to some Maine residents. In Knox County, which has several hundred licensed lobstermen, boats have stayed tied to their moorings for over a week, said Diane Cowan, executive director of the Lobster Conservancy in Friendship, Maine.
"I don't know how they came to agree on this," said Ms. Cowan. "The boats are all at their moorings and all the lobster traps are all in the water."
Ms. Cowan has lived in Friendship for 14 years. The town of about 1,200 residents has two churches and two lobster co-ops. Its harbor, which typically is filled with the sound of diesel engines as roughly 200 lobster boats motor in and out of the bay with their catches, has gone silent.
"I live on the water. All the boats are tied up, and it's absolutely quiet and peaceful," said Ms. Cowan.
While many are hopeful that prices will recover along with demand as tourists head to Maine for lobster boils and seafood festivals, some worry this season could have a lasting impact.
Mr. Miller, of Tenants Harbor, works with his three brothers, all of whom learned the business from their father. His son has joined the family trade, along with two cousins. But after 38 years, Mr. Miller says the job is not what it used to be.
"It's not a good business right now," said Mr. Miller, who frequently tells his son to switch jobs. "My catch is ahead of last year, but my checkbook says I'm not doing as well."
Write to Jerry A. DiColo at [email protected] and Nicole Friedman at [email protected]
A version of this article appeared July 16, 2012, on page A3 in the U.S. edition of The Wall Street Journal, with the headline: Lobster Glut Slams Prices.
Copyright 2012 Dow Jones & Company, Inc. All Rights Reserved
This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit
www.djreprints.com
Join the discussion 10 Comments, add yours More In Business »
