Lobster prices drop almost $6/lb since start of season; pricing formula changed to please buyers
Lobster's minimum shore price is usually high for the first week of the season in April (although the $14.37/lb to start 2023 was an all-time record), and while the price usually drops off by a dollar or two (three at the most) by the time the last pots are pulled in July, the price today is $8.45/lb — representing a huge three-week decline of $5.92/lb.
The price for lobsters paid to this province's inshore fleet is set by an agreed-to formula that's been in place between the union and buyers since 2011. The price-setting panel, which often mediates changes to the formula, warned this year and last that inshore harvesters may not be getting a fair market return for their lobsters.
Lobster buyers stopped purchasing at least twice so far this season, although it initially wasn't clear whether the move was in retaliation for the snow crab tie-up, or in outright protest over actual lobster prices.
TIMELINE
On April 26th, the FFAW issued a statement after lobster buyers stopped purchasing to say harvesters would "not entertain any discussion of altering the current lobster formula."
The union also called on the province to allow outside buyers to purchase local lobster at the formula price for the 2023 season, which Fisheries Minister Derrick Bragg later agreed to.
But on May 6th the FFAW issued a statement to say the union had agreed to a proposal by the Association of Seafood Producers to change the pricing formula.
That formula was set by the price-setting panel on April 13th.
The panel had ordered that the 2023 lobster price would be determined by the established formula, "based on the average of Thursday-Tuesday Urner Barry prices without deduction."
Urner Barry is an American-based seafood intelligence agency that keeps track of lobster sales into the United States — producing twice-weekly data on Thursdays and Tuesdays.
The primary aspect of the ASP change to the formula was the "removal of Thursdays from the price calculation up until Mother's Day, as well as to change the formula from 80% to 70% after $8 on the formula table."
That bottom line is less money for lobster to the inshore fleet, and another example of a panel-set price failing to start up a commercial fishery.
Port Union, Bonavista Bay in early May.
SEA-NL has written Premier Andrew Furey with an official request for a 2nd, broader investigation into this province's broken system of fish pricing after last year's three-month review failed to fixed anything.
SEA-NL has also demanded the province review the way lobster is priced to the inshore fleet to determine whether enterprise owners are getting a fair market return.
The price-setting panel raised concerns this year and in 2022 that lobster harvesters may not be getting a fair return, and that the formula may be obsolete.
The lobster-pricing formula pays fishermen as if their catch is being sold in the spring when the lobster may be kept in holding tanks and sold in the fall for much higher prices.
Lobster processors and buyers in this province and throughout Atlantic Canada have significantly increased their lobster holding capacity so they can sell to the market later in the year when the prices have risen.
Lobster is the province’s third largest commercial fishery after snow crab and northern shrimp, with a 2022 landed value of $105 million.
According to DFO statistics, total lobster landings last year came in at 13 million pounds, up from about 10 million pounds in 2020.
Ryan Cleary,
Executive Director, SEA-NL
SEA-NL Seaward Enterprises Association of Newfoundland and Labrador (SEA-NL) is a professional, non-profit organization that serves as the distinct voice for licensed, independent owner-operator inshore fish harvesters. Visit sea-nl.ca to join.