Undercurrent seafood news reported Monday a huge gap of up to $4/lb between what buyers are prepared to pay this year for snow crab, and the $6.15/lb price at the end of last season. But while the media warns the "drumbeat of a price war grows louder," negotiations have been taking place for months on a formula for setting the crab price — which make talk of job action premature.
Undercurrent seafood news quoted an unnamed "top executive at one of Canada's largest snow crab distributors" Monday (Feb. 13th) in predicting job action this coming season over the crab price — with either boats not fishing or processors not buying.
A price-setting formula for snow crab would be tied to actual market returns, and may be the way to go this year given the higher than usual level of mistrust between both sides — and the reported $4/lb price gap.
According to the article, the same source said harvesters are not prepared to take any less than $5.15/lb — $1/lb less than last year's lowest price.
If a crab-pricing formula (which wasn't mentioned in the Undercurrent article) is successfully hammered out between the FFAW and Association of Seafood Producers, there would be no worry of strikes or lockouts.
(Which are illegal anyway, as if that stops anyone.)
A crab formula would set an initial base price, but later require rebate payments to enterprise owners based on actual sales receipts using a third-party auditor.
That's not to say pricing formulas are God's gift.
Fishermen often complain the prices of lobster and halibut are higher across the Gulf.
The recommendation for a crab-pricing formula came from last year's review of this province's fish price-setting system.
The review also noted that a pricing formula had been in place before in the snow crab fishery, but was "abandoned after it was arguably manipulated by third parties to drive down snow crab prices."
That point is definitely worth highlighting, and I'll be sure to dig into it more.
2023 YEAR OF THE SNOW CRAB
While there were reports of a dramatic drop in the price of snow crab between January and September 2022, Washington-based fisheries consultant Les Hodges reports this year may be "the year of the snow crab."
"Canadian snow crab is projected to lead the way in both retail and foodservice in 2023 with favourable prices and a 90-95% U.S. of market share," reads the blog. "2023 is not going to be the year of the rabbit in the U.S. Rather it will be the year of snow crab!"
It's also expected that sales of Canadian snow crab to China will pick up.
IRONY OF A STRIKE OR LOCKOUT
The irony of a strike or lockout over the crab price is that under the provincial government-legislated final-offer selection system of fish pricing they're illegal.
Under final-offer selection, a government-appointed panel steps in when the union and processors/buyers fail to reach a deal on the price to be paid to the inshore fleet for a particular species.
Legislation dictates the panel must choose one price or the other, with its final decision “binding” on both sides.
Job action may be officially outlawed, but that's exactly what happened last year when various fleets refused to fish for panel-set prices, and processors refused to buy for them or unilaterally set their own.
A review last summer of the province's price-setting system recommended that with any "future alternative collective bargaining model the prohibition on strikes and lockouts should be maintained."
Right on — like they were maintained in 2022.
The 2022 snow crab quota for the province was set at 50,470 tonnes, a 32% overall increase over 2021, although the quota off Labrador was down 28%.
The 2023 quotas are usually announced by March.
2022 — 110m pounds $758 million $6.88
2021 — 84.6m pounds $624 million $7.37
2020 — 64.7m pounds $223 million $3.44
2019 — 59.2m pounds $308 million $5.20
2018 — 61.9m pounds $298 million $4.81
2017 — 74m pounds $325 million $4.39
2016 — 92m pounds $274 million $2.97
2015 — 104m pounds $257.6 million $2.47
2014 — 110m pounds $257.6 million $2.34
2013 — 112m pounds $220 million $1.96
• DFO LANDINGS AND LANDED VALUES
JOB TO PREDICT PRICES
It's a job to predict the price for any species, and snow crab has been particularly volatile given worldwide inflation, and cheap Russian crab.
But all eyes are on snow crab given the huge dependence on the species.
Newfoundland and Labrador's snow crab fishery is Canada's largest with a 2022 landed value of $758 million — more than all other commercial fisheries combined.
While indicators point to the price of snow crab being down this year, if you repeat that message often enough it becomes a self-fulfilling prophecy.
The only predictable in the fish-pricing business is unpredictability.
Executive Director, SEA-NL
Seaward Enterprises Association of Newfoundland and Labrador (SEA-NL) is a professional, non-profit organization serving as the distinct voice for licensed, independent owner-operator inshore fish harvesters.
Reach me at firstname.lastname@example.org.
Visit sea-nl.ca to join or register for the Feb. 25th AGM in Gander.