A reduced supply of domestic scallops has members of the industry predicting that already high prices aren’t going to change much soon.
Kane Kendall of Raw Seafoods, speaking during the National Fisheries Institute’s Global Seafood Market Conference webinar, said prices have rebounded from an initial drop that hit during the COVID-19 pandemic. SeafoodSource is providing exclusive coverage of the GSMC webinar series, which will be providing exclusive market-focused content throughout 2021.
Those high prices are partly due to a reduction in domestic scallop supplies stemming from a reduced quota for 2021. In 2020, NOAA’s National Marine Fisheries Service predicted a catch of 52 million pounds of scallops, while actually numbers came in slightly lower. For 2021, that prediction was lowered to 40 million pounds, and a large percentage of the biomass is based on the 2012 and 2013 year classes – which average smaller sizing.
“We’re going to see one trip less in the closed areas, so that’s 18,000 pounds off the bat that we’re not going to see per vessel,” Kendall said.
At the time, Bristol Seafood CEO Peter Handy predicted that the tighter supply would likely “put upward pressure on the scallop pricing in the upcoming season,” a prediction that Kendall said appears to have come true.
“I think we’re already seeing it, very high prices going into this year,” Kendall said. “We’re already seeing record high prices on U10s, U12s.”
That record pricing is a rebound from March of 2020, where COVID-19-related foodservice closures caused near-uniform pricing on scallops across all sizes.
“The market on scallops came down. It eroded to around USD 10.00 to USD 11.00 [EUR 8.39 to EUR 9.23] for all sizes,” Kendall said. “It needed to get down to that price, because there was no foodservice [business].”
At the retail level, Kendall said, customers were less willing to pay high prices for larger-sized scallops, as typically foodservice customers will pay a premium in order to have a larger center-of-plate scallop.
Lately, however, prices look more like a typical springtime market, a sign that things are starting to rebound from the pandemic.
“We’re seeing some extremely high prices on U10s and U12s that predominantly go to the center of the plate,” Kendall said. “That is an indication that our foodservice is coming back to life.”
J.J. McDonnell & Co. Purchasing Manager Chris Rubino – also speaking during the GSMC webinar – said customers still seem to be willing to continue spending more money for the larger-sized scallops.
“We continue to be surprised that people will pay the higher dollars, it seems like every year,” he said.
According to Performance Food Group Seafood Category Manager Jaimy Sorrell, foodservice customers looking for a domestic scallop typically won’t substitute with an import.
“If they want the domestic scallop, operators aren’t necessarily willing to trade down that value in order to take one of the imported products,” Sorrell said during the GSMC webinar.
All of that combined will most likely keep prices at high levels, the panel predicted.
“My crystal ball is definitely broken, so I don’t know if I can give you any insight,” Kendall said of pricing. However, with supplies constrained, either demand needs to go down, or prices will go up. “At the end of the day, we’re going to have 20 percent less pounds this year, so something is going to have to give.”
Photo by Chris Chase/SeafoodSource
