Coronavirus-related closures impacting US fisheries, driving down prices

Published on
April 1, 2020

As the COVID-19 pandemic continues across the U.S., with many states issuing stay-at-home mandates that will last at least a month, a growing number of fisheries are facing choppy waters.

The restaurant industry is seeking relief as its profits have plunged during the crisis, and many of the fisheries that supply those restaurants with seafood are facing similar downturns. Fisheries and suppliers of premium seafood products have been hit especially hard, with sales of products like lobster plummeting due to lack of demand.

“The market has really been suffering as a result of the coronavirus,” Annie Tselikis, executive director of the Maine Lobster Dealers’ Association, told SeafoodSource. “It has definitely been a challenging time for our business sector.”

The wholesale supply chain, Tselikis said, has been heavily disrupted as restaurant closures result in decreased sales, while on the processing side companies are striving to balance the safety of workers with the need to continue supplying customers.

The lack of demand, according to Patrice McCarron, the executive director of the Maine Lobstermen’s Association, has led to many fishermen forgoing putting traps in the water. Prices of lobster plunged in the wake of restaurant closures, with reports of dealers paying as little as USD 2.00 (EUR 1.83) a pound for lobster.

“While spring is one of the slowest times of year for the Maine lobster industry, those who are typically hauling have been impacted,” she told SeafoodSource. “ Some are able to sell into sluggish markets, some are selling direct to consumers and others have lost their market completely. Many lobstermen have ceased their normal fishing activity due to lack of dealers purchasing lobster.”

For the lobster industry, however, the true impact won’t be known until down the road. The peak month for the industry is in August, and 84 percent of the catch in Maine is landed from July until November.

McCarron said she hopes the government stimulus package, which had USD 300 million (EUR 274 million) earmarked for the seafood industry will help keep lobstermen afloat. The state’s governor, Janet Mills, penned a letter to President Donald Trump asking for federal assistance for the sector.

“We are optimistic that the expanded unemployment program to include self-employed persons will help those lobstermen and their crew who are unable to fish, and that the Paycheck Protection Act will help keep some of our shoreside businesses operating through the loan forgiveness program,” McCarron said. “There are also new economic injury and disaster loans through SBA, additional loan programs available in Maine, and the potential for fisheries disaster relief if profits decline dramatically over the course of the season. While we do not yet fully understand the details of accessing these benefits, we are hopeful that these resources will help to keep our business solvent while the pandemic runs its course and the lobster market rebounds. MLA will continue to monitor things closely.”

The lobster industry is not the only fishery suffering the affects of COVID-19. According to John Williams, executive director of the Southern Shrimp Alliance, the industry is facing declines in sales due to the restaurant industry collapsing.

“We have heard from some members of the industry that sales of processed shrimp have declined substantially with the collapse in food service and restaurant business,” Williams told SeafoodSource. “If shrimpers believe that there will not be purchasers for their catch, some will stay home, and landings will be reduced.  We will be monitoring the landings reported by NOAA for March, April, and May to get a sense of how they compare with the industry's experience over the last two decades.”

A number of Louisiana shrimp companies interviewed by Houma Today confirmed that sales have dropped precipitously.

“Sales have plummeted,” said Kimberly Chauvin, of David Chauvin Seafood Company in Dulac, told the publication. “I think we are down about 90-something percent.”

Roughly 80 percent of the shrimp caught in the U.S. is sold in restaurants, Acy J. Cooper, a member of the Louisiana Department of Wildlife and Fisheries’ Louisiana Shrimp Task Force, told the publication. Prices are down and it’s uncertain whether shrimpers will even be able to sell product if the closures go on long enough, he said.

Other fisheries have seen similar drops in the prices they're seeing at the dock. Jim Lovgren, a trawler captain out of New Jersey, told National Fisherman that prices of fish like jumbo fluke, which had been bringing in USD 4.00 (EUR 3.65) a pound, had dropped in price to just USD 0.75 (EUR 0.68) per pound.

“It’s really serious here. Some buyers have not given us a price, and in some cases, they still have the fish,” he told the publication.

The largest fishery by volume in the U.S., the Alaska pollock fishery, is also facing its own set of disruptions, though it has fared better than some. According to Craig Morris, the CEO of the Genuine Alaska Pollock Producers (GAPP), the industry’s "A" season managed to avoid overwhelming disruptions.

“The wild Alaska pollock fishery did very well, all things considered, during our A season that is wrapping up now. We were able to harvest our catch and prices have held up well. Our customers who are in channels that are performing well, such as retail, can rest assured that their orders for our fish are on their way,” Morris told SeafoodSource. “We, as a wild Alaska pollock industry are clearly now focused on what the market will bring for our B season and ensuring that our most important asset, our people, are able to harvest this nutritious and affordable fish for our customers around the world.”

The harvest side of the industry, Morris said, has so far avoided the worst of the impacts.

“GAPP participates in joint industry working groups that are 100 percent focused on keeping our workforce able to do their jobs in a safe environment and, luckily, we have been able to keep our production running,” he said. “That isn’t to say that our members aren’t absorbing new costs to operate safely through the crisis, and costly interruptions in harvest operations remain a very real possibility and enormous cause for concern. But, our fishermen are busy right now harvesting wild Alaska pollock and the industry is focused on using every available resource available to keep our people safe and healthy.”

The industry has, however, been impacted by the wide swath of restaurant closures occurring globally.

“Our foodservice markets have collapsed – almost zero in Europe, and by over half in North America and Asia,” Morris said. “We are the critical ingredient in most fish sandwiches in most quick service chain restaurants around the world.”

One example of the closures is McDonald’s, which recently closed all 1,270 of its stores in the U.K. and uses pollock as the main ingredient in its Filet-o-Fish sandwich.

Despite that, pollock is “uniquely positioned” for retail and other channels that have been performing at record levels,  Morris said, and that GAPP is working to help its members capitalize on opportunities.

“Basically, GAPP’s goal is to support all of our members and partners either in helping to seize on opportunities in channels and markets performing exceptionally well or to prepare those partners currently struggling to either pivot to channels that are doing well or rapidly recover in channels and markets currently struggling when conditions improve,” Morris said.

Despite the ongoing impacts of COVID-19, many industry professionals remain positive and anticipate the industry will adapt in the face of adversity, as it has done many times before.

“This industry has been challenged before,” Tselikis said. She pointed out the 2008 financial crisis and a price collapse in 2012 as two challenges the lobster industry came out of stronger.

“We come out of these challenging situations stronger, more innovative, and as better small businesses," she said.

Tselikis predicted many aspects of the industry will adapt to meet the needs of customers and continue supplying products.

“Necessity is the mother of invention,” Tselikis said. “There’s a light at the end of the tunnel, but right now we don’t know how long the tunnel is going to be.”  

Photo courtesy of Arthur Villator/Shutterstock 

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