Just over eight months since the start of a trade war between China and the United States, the Maine lobster industry is still coping with the affects of a 25 percent tariff on their goods.
Maine had been on track to more than double the value of exports to China, with USD 87 million (EUR 76.9 million) worth of the crustacean being sold through June 2018, compared to roughly half that value through the same period in 2017. However, once China implemented a 25 percent tariff on a wide list of goods from the U.S., shipments of live lobster from Maine to China plummeted to the point that they were almost nonexistent compared to the start of the year – and things haven’t changed much since then.
“The tariff story has dominated the media, and lobster has been the case study,” Annie Tselikis, executive director of the Maine Lobster Dealers’ Association, told SeafoodSource. “We've been vocal about it because it really has impacted the business.”
The market, which had seen explosive growth in the past few years, suddenly dried up overnight, for reasons completely out of the hands of Maine companies shipping live lobsters to China.
Even with the challenges, however, companies that focused on live lobster shipments have managed to make up ground by re-focusing efforts in other areas.
“There is no question the tariffs have hurt us, but our strategy has always been to be nimble and we have aggressively sought out new markets and are making greater inroads in familiar markets,” Tom Adams, owner of Maine Coast, said in a release. Maine Coast is exhibiting at Seafood Expo North America – running March 17 to 19 at the Boston Convention and Exhibition Center in Boston, Massachusetts – at booth 2132, in part to expand on that effort to gain new customers both domestically and abroad.
“Since the implementation of the retaliatory tariffs in July, we have invested heavily in growth in other regional markets while retaining our engagement with customers in mainland China,” Adams said. “We recently wrapped up a trip to Taipei. We have always found that investing one on one with our customers and developing relationships is what continues to grow our business despite the tariffs.”
Tselikis said she has seen similar efforts coming from other companies in Maine, some of which have never exhibited before, and others which haven’t for years.
“People are looking to increase their domestic business and are increasing in that marketing and promotion of the product,” she said.
The domestic business, and that of companies that focused on products other than live shipped lobsters, is booming. John Norton, CEO of Cozy Harbor of Portland, Maine, told SeafoodSource the market for frozen lobster tails has been strong.
“The frozen market definitely helped offset the downside of the tariffs for the industry as a whole, not necessarily for individual companies, but for the industry as a whole,” Norton said.
The market was the strongest Norton has seen in 2018, and that has continued into the first few months of 2019.
“Oh yeah there’s no inventory, currently, of lobster tails,” he said. Norton’s company will also be displaying their products at SENA19, at booth 2725.
That demand has been positive for lobstermen, which saw strong boat prices and demand even after the tariffs had been implemented.
“The prices to the lobstermen were stronger in 2018, than they were in 2017, after the tariffs were put in place,” Norton said. “And landings were significantly higher in 2018 than they were in 2017.”
Boat price increased from USD 3.92 (EUR 3.46) per pound in 2017 to USD 4.05 (EUR 3.58) per pound in 2019, according to data from the Maine Department of Marine Resources. Landings were up nearly 8 million pounds over 2017, and the value of the fishery overall increased in value by USD 46 million (EUR 40.7 million).
While the tariffs may have cut off the fastest growing foreign market for live lobster, the industry has found other in-roads and been nimble in adjusting to external factors.
“I have said this a few times before, this industry has been through challenges in the past,” Tselikis said. In 2007, for example, a U.S Food and Drug Administration health advisory on lobster tamale caused the Japanese market – which at the time was one of the largest live-trade markets – to disappear overnight.
“We’ve been through that, we’ve been through the 2008 economic crisis, we have been down this road before, and with regard to challenges that have faced the supply chain,” Tselikis said. “This industry is not going to just close up shop overnight because of the impact of the tariffs. They are nimble enough and they are skilled enough to be able to adjust their business practices.”
