A 25 percent cut in the 2012-13 Alaska snow crab quota doesn't seem to be striking much panic into buyers’ hearts as the crab season gets under way.
Alaska officials cut the Bering Sea snow crab quota to 66.35 million pounds, down from 88.89 million pounds last year. The Bristol Bay red king crab quota is up slightly, to 7.85 million pounds from 7.83 million pounds.
“I don’'t think that's got anyone particularly concerned because we have overstocked crab situations here in the United States,” says the CEO of one seafood distributor. “The Russian stocks that have been in the country, even though there's not much more that’s going to come before the end of this year, have been enough to slowly drag the market down.”
Prices for different sizes have been soft at different times, the CEO says, with softness now mostly in 12-14s and 14-17s. He says 20-24s are smaller, as they seem to have bottomed out and bumped up a bit, while 16-20 browns are drifting down; 16-20 red kings have found a bottom and are making a slight recovery, while 6-9s and 9-12s are delicately balanced. “Price isn’t going anywhere but there is product, so we’ll see where that takes us,” he says.
The latest price reports had 5- to 8-ounce snow crabs f.o.b. West Coast at USD 5.25 to USD 5.40 a pound, while red king crab prices ranged from USD 10.25 to USD 10.50 a pound for 20-24s to as much as USD 25 for 6-9s.
“The smaller sizes of the king crab are losing a little bit of their strength, they’re down about USD2 a pound now, from USD 14-17 a pound to around USD 12-something,” says the buyer for a chain of restaurants. “I think they’re trying to go back into retail. They’re getting some movement there, but they’re getting it at a lower price point. The 6-9s, there’s no drop at all.”
Even at these somewhat lower prices, the CEO says crab remains a luxury item for many, noting four years ago 16-20 red king crab was priced at about USD 8, went up to USD 16 last year and now are around USD 12. “So USD 12 sounds a heck of a lot better than USD 16, but it's not near where it's going to be. Remember, that has USD 12 worth of shell on it and you have to put a fair amount of it on the plate to make someone happy, so what's your menu cost going to be? Pretty high,” the CEO says.
As for his strategy, the executive is looking to product from Russia and Norway, but can’t yet make the Norwegian price points work.
“Russia doesn’t want to sell as cheap as they need to in order for people to voluntarily restock, so we just have a situation where the cost at the source has not really caught up yet with the market's adjustment to end-user demand,” he says. “What we’re doing is placing some of our bets with Russian product and we’ll be doing another restock before we get to the holidays. But it’s certainly not something that feels like it needs to happen today or tomorrow (late October), so we’re sort of waiting for it to shake itself out.”
The restaurant buyer says supplies are out there as people have backed away from buying product, with some suppliers offering price incentives to get the sales to begin again. “The high prices from 2011, we're tapering off them for sure,” he says.
