FFAW-Unifor disappointed over Newfoundland cod pricing, shrimp and mackerel TAC decisions

Published on
May 25, 2021

The Fish, Food, and Allied Workers (FFAW-Unifor) union of Newfoundland and Labrador has expressed disappointment over a cod-pricing decision and a move to limit an increase in the total allowable catch of Canada’s northern shrimp fishery.

On 18 May, the Newfoundland and Labrador Standing Fish Price Setting Panel, which sets a price for cod caught in the province by deciding between a FFAW-Unifor offer and an offer made by the Association of Seafood Producers (ASP) – a trade association representing processing companies chose ASP’s offer of CAD 0.73 (USD 0.60, EUR 0.49) per pound for grade A cod, CAD 0.38 (USD 0.31, EUR 0.25) for grade B cod, and CAD 0.20 (USD 0.16, EUR 0.13) for grade C cod through the summer. After 1 August, prices will rise to CAD 0.80 (USD 0.66, EUR 0.54) for grade A cod, CAD 0.40 (USD 0.33, EUR 0.27) for grade B cod, and CAD 0.20 (USD 0.16, EUR 0.13) for grade C cod.

The FFAW-Unifor had asked for a 28 percent increase in price for 2021, moving grade A cod to CAD 0.98 (USD 0.81, EUR 0.66) through the summer and CAD 1.03 (USD 0.85, EUR 0.69) after 1 August, and increasing the per-pound price of grade B cod to CAD 0.47 (USD 0.38, EUR 0.31) in the summer and CAD 0.49 (USD 0.40, EUR 0.33) after 1 August. It argued market returns were up in 2020 and that just 42 percent of the province’s cod production was exported in 2020 while domestic sales, including sales to salt-fish producers in Nova Scotia, were up, and are more profitable.

“FFAW-Unifor’s position is that this is a terrible decision. It is premised on misrepresentations given by ASP at the panel hearing. By accepting the ASP position, the panel has certainly lowered the bar for what is an acceptable argument for setting the price for fish,” FFAW-Unifor said in a statement. “In 2019, the export price was CAD 3.54 [USD 2.93, EUR 2.39] per pound. On that basis, the panel accepted the position of ASP in 2020. In 2021, the export price was CAD 3.97 [USD 3.29, EUR 2.68] per pound and the ASP position this year, a rollover of last year’s price, was selected. The price this year is not fair. We know that there are a lot of harvesters dependent on cod and, unfortunately, they will have to fish at this price due to the lack of competition in our processing sector.”

In its proposal to the price-setting panel, the FFAW-Unifor contended that cod market prices have been steady and the global market outlook for 2021 is generally positive as the COVID-19 pandemic is brought under control. It also argued Canadian cod producers are well-positioned to compete against cod sold through China due to current high shipping prices and other logistical issues besetting Asian processors.

The ASP was successful in its bid to rollover the 2020 price it paid to fish harvesters. Stable cod markets and a strong Canadian dollar, along with variability in some data presented by both FFAW-Unifor and the province of Newfoundland and Labrador, which could be the result of entry errors, made it difficult to determine the actual export value of the province’s cod exports. The ASP also pointed to the decision earlier this year by the Department of Fisheries and Oceans (DFO) Canada to cut the cod quota by 50 percent in the critical 3P zone off the coast of Newfoundland as a factor causing instability in the marketplace.

“Given the stable outlook for pricing in 2021, especially considering negative currency changes, the FFAW’s current price offer of CAD 1.03 [USD 0.85, EUR 0.69] would likely put harvesters’ share well above the average and the sharing of 2019. In that sense, the price offer appears to be based upon significantly improved sharing and is reliant on a more significant improvement in markets than forecasted,” the panel wrote in its decision. “While the panel feels some increase might be justified to keep sharing in line with previous years, the 28 percent increase requested by the FFAW does not appear warranted based upon current market and currency projections.”

FFAW-Unifor is entitled to ask for a reconsideration of the pricing decision, but a hearing wouldn’t take place until mid-summer, after a portion of the province’s cod quota will have already been caught.

“To be clear, [FFAW-Unifor] knows that this is a bad price that will only enrich processors at the expense of harvesters. It is up to each individual harvester to decide whether to fish or not, but it is important that our members understand the union’s perspective on a price,” FFAW-Unifor said. “ASP often states that the right price is one that the harvester will fish for and the processor will buy for. FFAW completely disagrees with this perspective.”

FFAW-Unifor suffered additional frustration with DFO’s 20 May decision on the total allowable catch for Canada’s northern shrimp fishery. While biomass has increased markedly in Canada’s shrimp-fishing Area 6 – the only area where smaller-sized harvesters have access – DFO reduced its exploitation rate for 2021 from 10 percent to 8 percent, meaning the total allowable catch will be increased by 15 percent instead of 40 percent for the upcoming fishing season.

“There is no logic to this decision,” FFAW-Unifor President Keith Sullivan said in a statement. “Why decrease the exploitation rate when the stock is getting stronger? There appears to be a double standard with exploitation rates. In other shrimp fishing area, like SFA 4 and 5, where only offshore corporate-owned vessels are permitted, the exploitation rates are much higher despite the overall size of the stock being much smaller.”

Sullivan accused DFO of being swayed by environmental groups in its decision.

“FFAW has repeatedly stated that DFO science and resource management have made decisions that cater to environmental groups,” Sullivan said. “Environmental groups, who have no economic interest in the fishery, have an outsized voice in setting quota levels for those who depend on the resource for their livelihood. This is a deep insult to harvesters.”

Pricing for the spring shrimp fishery was set on 28 April by the price-setting panel, which decided on ASP’s offer of CAD 1.00 (USD 0.82, EUR 0.67)  per pound over the FFAW request of CAD 1.50 (USD 1.24, EUR 1.01) per pound.

FFAW is also protesting the 21 May decision of Atlantic Mackerel Advisory Committee (AMAC) to reduce the total allowable catch of mackerel from 8,000 metric tons (MT) to 4,000 MT.

“Harvesters have already endured massive cuts in this stock and requested to maintain the 8,000 MT quota while increasing science work of Newfoundland and Labrador,” FFAW-Unifor said in a statement. “A quota of 4,000 MT is unacceptable, especially when taking into consideration the observations made by harvesters of an abundance of mackerel, as well as the limitations this places on the research and assessment process”

However, FFAW-Unifor celebrated one victory – the likelihood that the ASP will not challenge its win in an earlier snow crab price negotiation decided by the price-setting panel in April. In a separate press release, the union said high prices for 5- to 8-ounce snow crab clusters made it unlikely the ASP would request a price reconsideration.

“We cannot predict the future. The market could change at some point, but right now we do not see any market conditions supporting a decrease in price,” it said.

A clause in the pricing agreement relating to a strengthening Canadian dollar will bring the agreed-upon price down to CAD 7.53 (USD 6.24, EUR 5.09) this week, but FFAW-Unifor said it accepted that change because the cause “removes currency [changes] as a cause for a reconsideration.”

Photo courtesy of GGW/Shutterstock

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