Snow crab selling for as little as USD 5.99 (EUR 5.48) per pound helped clear a glut in inventory and served as a loss leader for U.S. supermarkets in 2023, according to Direct Source Seafood CEO Roman Tkachenko.
Snow crab prices sunk to historic lows in 2023, even though the snow crab fishery in the U.S. state of Alaska was closed and it became more difficult to bring Russian product into the U.S. due to sanctions stemming from the invasion of Ukraine, Tkachenko said at the 2024 Global Seafood Market Conference in Orlando, Florida, U.S.A. on 23 January.
“In 2023, we had a little bit of a hangover from the 2022 season. The market, overall, did well to clean up most of the inventory from 2022, but prices did contract in the fourth quarter of 2023,” he said. “But, we're seeing a pretty healthy demand right now, and we're seeing the market kind of move where we should get into a new season of Canadian product with ample inventories right on the cusp to start a new season.”
Snow crab prices in the U.S. market fell from USD 19 (EUR 17.77) per pound in January 2022 to USD 7.50 (EUR 7.01) per pound in January 2023 and are below USD 6 (EUR 5.50) in January 2024.
The price is "at levels unseen since 2012-13," Urner Barry Director Janice Schreiber said, and are down 47 percent on the five-year average.
While the U.S. imported around 125 million pounds of snow crab in 2023 – up from 94 million pounds in 2022 – many suppliers and retailers were forced to sell at steep discounts. Schreiber cited a survey of 52 U.S. stores that found the number of promotions was up 30 percent and the average selling price was down 30 percent in 2023.
“There were a couple retailers that went out of their comfort zone a little bit and were in the position to take advantage of where the pricing was, and they had … just enormous success with it,” Schreiber said.
Tkachenko said with robust harvests out of Eastern Canada, despite a delay to the season due to a pricing dispute, there was plenty of crab available to U.S. buyers.
“There was a good amount of retailers that used [snow crab] as a loss leader. They were doing a lot of USD 5.99 [EUR 5.48] over the summer; USD 6.99 [EUR 6.41] sales helped moved a lot of product at a very critical time when the season was ongoing,” he said. “People saw value and presented value out there to the consumer to help drive [sales].”
Canada owned a 93 percent market share – up from 89 percent in 2022 – and it’s likely to again be the dominant supplier to the U.S. in 2024, even though Norway’s quota is rising 30 percent to 22.7 million pounds. The Canadian government is expected to announce the country’s snow crab quota within the next few months.
Tkachenko said he’s hopeful the market will stabilize in 2024.
“There was the hangover from last year, and there's a lot of factors that are still playing into it. But, that might change a lot coming up here,” he said.
Image courtesy of National Fisheries Institute
