Reductions in the number of fishing days and the amount of scallops a boat can catch in a day ensure prices will stay in double digits for most of the season, which is now under way.
One buyer for a chain of seafood restaurants says he purchased 18,000 pounds at USD 12 a pound in early April, and isn't spending much time worrying about how much he spent. He just didn't want to be shut out.
“I remember when they were in the low-USD 9s, the mid-USD 8s, for years and years, so USD 12 is crazy,” the buyer says. “But when you get a 30 percent quota reduction that’s what happens to the prices, they go up 30 percent. I just didn’t want to mess with it this year. I think it’s going to be a big problem, it’s going to be a real tight market.”
Actually, the buyer did OK, considering prices in early April for shucked 10-20s were between USD 12.50 and USD 13 in both New York and New England, with U-10s in the USD 14.25-USD 14.50 range.
With about a 10-month supply in hand, the buyer is now huddling with his team to determine just how much of the price increase to pass on to customers. “That’s a discussion we’re going to have. It depends, we’ve had so many price hikes, we don’t want to get too expensive, you’ll lose customers,” he says.
A CEO at one New England-based seafood company says the amount of time when scallops prices decrease has shrunk in the last five years, from three months to two months to one month to only about a week last year. He doesn’t even think he’ll get that much time this year.
“I just told all my accounts when I see the price break and they have the tonnage I’m going to tell you to buy, so get your purchase-order books ready,” the CEO says. “The only way they believe me is over the years it has proved out. I’ve said now is the time, this is the time, this is the number, go, and it proves out by the end of the year when they’re seeing prices USD 1, USD 1.50 higher than they were when they bought and they know they did the right thing, we can trust this guy.”
Instead of a week this year, the CEO expects prices — if they dip at all — will drop for an hour or two, maybe a day. “I’ve said to my customers ‘Why don’t you give me a scenario that if it’s at USD 10 you’re going to buy X, if it’s USD 10.50 you’re going to buy Y and if it’s USD 11 you’re going to by Z. Then I know what to do when the moment strikes.”
Even if prices fall, the CEO says he doesn't expect them to decline as much as they have in recent years, due to the fewer fishing days and the reduction in catch limits from 18,000 pounds to 13,000 pounds.
“Boat prices have been anywhere from USD 10 to USD 11. I think we might see boat prices of USD 9 in April or May, and it will be for a very short period of time and it won’t last long. It will then continue with double-digit ex-vessel prices.”
If the price drops to something in the USD 9s, the CEO says “I’ll buy as much as I can get orders for.”
