Stable supply and a hungrier Asian market provided the basis for a solid year for the North American lobster industry.
North American lobster landings are expected to be down 5 percent in 2023 once totals are released, but the resource is in excellent shape and continues to be reliable, according to a panel of shellfish experts speaking at the 2024 Global Seafood Market Conference in Orlando, Florida, U.S.A. on 23 January.
“We've been hovering right around 300 million pounds as a total category for many years after a big run-up in the 1990s and early 2000s,” Ready Seafood Vice President Andrew Daughan. “It's a wild-caught species, so you're going to have some fluctuations in landings, but year after year it has proven to be a consistent fishery.”
Exports to China, Hong Kong, and Vietnam fueled growth in the sector, according to Slade Gorton Director of Marketing and Business Development Annie Tselikis.
“Looking at the 2023 data, we're almost back to where we were not just pre-pandemic, but pre-trade war, which I think is pretty significant,” Tselikis said.
U.S. lobster exports to China were decimated by tit-for-tat tariffs implemented in 2018 and 2019, virtually eliminating lobster sales to China. Canada picked up some of the slack, adding direct lobster cargo flights to China from Nova Scotia, but in 2023, U.S. exports reemerged after China lifted its zero-Covid inspection regime for imported foods, as had been predicted by the 2023 GSMC panel.
“I was kind of surprised to see actually when the import numbers came in … [to see] we're actually slightly ahead of where we were the year before,” Daughan said. “You wouldn't expect that with some of the market stuff we keep hearing about … but the reality is, it’s a very steady resource and there’s very steady supply.”
Noting lobster imports from Canada into the U.S. were down in 2023, with live volumes dropping from 43 million pounds in 2022 to 34 million pounds in 2023, Daughan said a major change in the fishery is that higher interest rates are impacting lobster distribution.
"The buyers who kind of relied on the industry to hold that inventory for them and have a year-round supply, that's just not there anymore,” Daughan said. “People are just not willing to hold that inventory for the offseason like they were.”
Another potential problem, the loss of Marine Stewardship Council certification due to the fishery’s interaction with the critically endangered North Atlantic right whale, has largely been defused, according to Tselikis.
“There was concern in the marketplace that that was going to have an impact on our ability to sell products to customers. And I think the industry, especially in industry from Maine has done a very, very good job of explaining to their customers why they should not remove this product from their purchasing,” Tselikis said. “You can use third-party certification and NGOs as a guide for your purchasing. But trust your suppliers. And I think that's something that's valuable for all of us … on the supply side: understand the fisheries that we're purchasing product from and take the time to learn about where this or your items are coming from and build the relationship with your suppliers so that they can articulate to you what is really happening and how fishermen and how the entire supply chain are deeply connected to these products or are handling some of these challenges.”
Prices rose toward the end of 2023 and have reached nearly USD 11 (EUR 10.11) per pound in 2024 for 1.25-pound live lobsters free on board (FOB) in New England, over USD 3 (EUR 2.75) over the three-year average price, in the lead-up to the Chinese New Year holiday in February 2024.
The panel also provided an update on spiny lobster production and pricing. The Bahamas saw a 75 percent jump in its spiny lobster catch in 2023, reaching 4.5 million pounds of tail production, with Honduras second at 2.6 million pounds, Nicaragua at 2.1 million pounds, Brazil at 1.2 million pounds, and South Africa at 600,000 pounds through November 2023. Total production was up 26 percent through November 2023 year over year, after an 18.4 percent drop in 2022.
Typically, most spiny lobster tails are sent to Europe, but this year, the European market was slow, and so more ended up in the United States, according to Ready Seafood Vice President of Sales Rob Kragh. Last year, Caribbean spiny lobster was USD 3 more expensive than North American lobster, but this year, it’s cheaper.
Tselikis said lobster is a hot commodity worldwide, with demand outpacing supply.
“What we're seeing is just absolute competition for raw material. The people that are buying live lobster and are selling it as live lobster are the same people who are competing against buying live lobster to put up for frozen lobster tails and lobster meat, and so there's just a lot of competition on the shore, and that’s having an impact on the wholesale side for live lobster distribution in the U.S. and also for export,” she said.
Daughan predicted a continued uptick in prices through 2024.
“We're probably going to see a higher spike up here by the time it's all said and done,” he said. “Demand is still very strong for this item.”
Image courtesy of the National Fisheries Institute
