Right after the Department of Fisheries and Oceans Canada slashed the total allowable catch (TAC) for the Newfoundland and Labrador region 22 percent to 35,419 tons, crab harvesters received bad news on pricing.
On 4 April, the Standing Fish Price Setting Panel set raw material crab prices at CAD 4.39 (USD 3.27, EUR 3.07), an historic number and CAD 0.29 (USD 0.22, EUR 0.20) higher than what the Association of Seafood Producers in St. John’s, Newfoundland, recommended to the panel.
“We are running into a signficant risk here; the challenge is getting the price right,” ASP Executive Director Derek Butler told SeafoodSource. Already, there has been a decreased demand from Japan over the past two years due to higher snow crab prices, and the Alaska snow crab price is higher this year, he explained. Buyers may back off from Newfoundland and Labrador snow crab altogether with the new minimum dock prices.
ASP proposed the panel set the snow crab price at CAD 4.10 (USD 3.06, EUR 2.87) per pound to create price stability. The panel mistakenly based its price on spot market pricing reported by Urner Barry – currently at USD 8.00 (EUR 7.50) per pound wholesale – which it has never done in the past, according to Butler.
“Consumption is reducing, the price has gotten too high, and it is spot pricing in response to quota reductions in Alaska and here that is being used,” Butler said in an ASP statement. “This decision leaves processors and our plants exposed to a market collapse. It is a disservice to this industry, to be so cavalier about the future, or to think that a single reconsideration on price, provided for in legislation, can correct this.”
DFO’s recent decision to slash the Northern shrimp fishery (covering Newfoundland and Labrador) total allowable catch 62.2 percent to 10,400 tons will also have a devastating effect on seafood harvesters and processors, Butler said.
“We have gone from 177 million pounds of raw material in the inshore in 2010 to about 25 million pounds now. For a year-round operation, that could run one plant, but there were eight operating last year. It is going to be a rough year,” Butler said in a statement.
However, Butler acknowledged that science shows that the shrimp biomass has declined significantly.
“We have to respect the science, and the minister is right to follow it,” Butler said. “We have known this day would come; we are not surprised or shocked. But it is devastating, to be sure.”
