Shortage keeps Maine lobster prices high

International and U.S. buyers are concerned about Maine lobster pricing, pushed up by lower landings and increased demand.

“It’s been a tough season,” Luke Holden, managing partner at processor Cape Seafood in Saco, Maine, and founder of the Luke's Lobster restaurant chain. “It basically started with people having the fear of what happened two years ago [when] a really bid shed came on early and caused the price of raw material to drop drastically. Everybody this spring and summer was waiting for the big shed, which never did happen.”

It’s translated into escalating prices all season, he added. “Our raw material prices continue to go up but the buyers are hesitant have a fear of what happened two years ago. They don’t want to hold inventory and are not adjusted to higher price,” Holden said.

While international demand for Maine lobsters has increased in recent years, this summer’s pricing — up USD 1 or 2 pound (EUR 0.78 to 1.57) on average for tails — is causing many to rethink their purchases.

“Demand has been up, but there has been some resistance from the buyers to higher prices, particular export buyers,” Emily Lane, VP-sales for Calendar Island Maine Lobster in Portland, Maine. Some international restaurants are taking lobster off their menus, industry sources say.

“As the protein becomes more expensive, some people are finding substitutes or the prices are being passed through,” Holden said. While larger restaurant chains may opt not to feature lobster currently, smaller restaurants are finding “creative ways to stretch the protein a little further,” he added.

Holden is seeing raw material lobster prices as high as USD 4.50 (EUR 3.55) a pound coming into the plant, compared to prices in the low-USD 3 (EUR 2.37) range two years ago.

Meanwhile, live lobster tails have been reported as high as USD 17 (EUR 13.41) f.o.b. mid-Atlantic for 4-ounce to 5-ounce tails.The current Maine lobster situation is simply a function of supply and demand.

“We have had increasing supply over the last 10 years, and you have had demand chasing that. Now you have demand chasing supply,” Holden said, adding that the Maine Lobster Marketing Collaborative and lobster suppliers have done a great job building the brand recognition and value proposition of lobster.

Unfortunately, some processed lobster buyers are not willing to pay the higher prices.

And lobster prices are expected to remain strong over the next few months. “We are reaching the point of the year now, where the catch less predictable with bad weather,” Holden said.

Plus, Canadian lobster fisheries open at the end of November, which means the Canadian processors will be processing more Canadian than U.S. product.

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