The North Atlantic lobster season kicked off in May, but there wasn't much activity to speak of at the start. A heavy ice pack and cold water have restricted fishing, slowing landings. “We have already seen a softening in pricing on North Atlantic tails but this is more a reflection of processors cleaning up inventory in anticipation of new-season landings,” said a top buyer for a major North American seafood company.
The record-low prices seen last year for North Atlantic lobster tails led to many major promotions by some of the largest national restaurant chains. Prices started rising once the 2013 season ended in December, which the buyer says will lead to a major reduction in lobster promotions in 2014, both in foodservice and retail.
“The challenge to these foodservice and retail operators is they have created some significant sales history they will be fighting in 2014 versus 2013,” the buyer said. “This will make them all very motivated to find ways to continue to promote North Atlantic lobster tails. Nothing draws customers like lobster, so there is room for the increases. We forecast operators will skinny up their margins to help offset the market increases in order to promote them.”
The buyer said he thinks North Atlantic tails are at their high point and will continue to ease throughout the rest of the year. “Pressure will be on the value tails [5 to 6 ounces] and smaller, with larger tails being weaker,” he said.
An executive at a Maine lobster company says prices were hovering around USD 2.60 (EUR 1.91) to USD 2.75 (EUR 2.02) a pound at the start of the season, about USD 0.50 (EUR 0.37) to USD 0.75 (EUR 0.55) higher than they were one year ago at this time. All product at this point is going to the live market, he said, adding that prices will continue to trend lower until processors in Canada decide to open up. He said the Canadians will start rolling “when the price point makes sense for them. Right now it's too expensive for the processors to make any money.”
As a result of the higher prices, the seller said certain chains that might have launched a Mother's Day special chose not to feature lobster this year. Those that did had much higher prices and they say they've seen one-third the demand they did last year. His outlook is similar to the buyer’s: “I don't think prices will come down until the processors in Canada open up.”
Longer-term, supply problems may just be beginning, as there was a report in April that the number of juvenile lobsters is continuing to decline. A University of Maine study found the baby lobster populations in 11 areas of the Gulf of Maine are at their lowest levels since 2007. This has folks in Maine’s lobster industry worried, as the impact could soon be felt in the marketplace. Maine accounts for 85 percent of all the lobsters caught in the United States.
The report blamed warmer ocean temperatures, pollution, changes in predation and a decrease in food as reasons for the decline, and brushed off claims by some environmental groups that overfishing was to blame.
