One week from today, Alaska's famous and fearless crab fleet will return to the icy waters of the Bering Sea to bait and set their pots as Discovery Channel cameramen follow their every move. The "Deadliest Catch" should continue to garner high ratings on cable TV, but seafood buyers around the world will be keeping a close eye on the actual Alaska crab harvest. The plot will thicken when buyers are paying up to $2 more per pound than they did last year.
With crab, it's all about supply, one industry analyst told me recently. So, despite the economic slump the United States is currently mired in, crab prices should remain high because of strong demand overseas. And there is historical precedence for this assumption: In 2002, after the economic swoon that resulted from the 9/11 tragedy, king crab prices were among the highest on record.
But supplies are down. Russian king crab imports through July, the most recent data available from the National Marine Fisheries Service, are down 56 percent from the first seven months of 2007. Russia's king crab fisheries in the Far East near the Kamchatka Peninsula are more tightly regulated than before as officials crack down on illegal fishing, part of an ongoing effort to eliminate poaching and unreported catches.
The supply shortage is most deeply felt in Japan, which seemingly can't get enough crab. So they'll look to Alaska to fill their pipelines - and they're reportedly willing to pay a premium to meet their needs. According to the analyst, price negotiations between crab processors and Japanese buyers are currently ongoing. But based on last year's wholesale price of roughly $8.75 a pound for legs and claws, the currency exchange with the yen alone would put this year's price closer to $10.
You can bet that Alaska crab fishermen will want more than the $4.35 a pound they earned last year. With lower quotas than last year (20.3 million pounds of kings and 58.5 million pounds of Tanners) and the import spigot tightening, wholesale prices have nowhere to go but up.
It's a far cry from just two years ago when big-box retailers and club stores were hawking 2-pound boxes of Russian king crab legs for less than $20 each. All the talk of market expansion for king crab was an illusion, it appears. Welcome back to reality.