Snow crab prices surge as fishing season winds down (and industry carries on as if it's normal)
With 89% of Newfoundland and Labrador’s 2023 snow crab quota landed, and most of it headed to the United States, well-known American seafood consultant Les Hodges says the market has “solid retail and food service support and surging prices.” Only that ship has sailed for the inshore fleet.
The snow crab price to the inshore fleet jumped 30¢/lb to $2.60/lb earlier this week after the price on the Urner Barry seafood index hit the $5.50 US ($7.29/lb Cdn) threshold, as per the FFAW/ASP agreement.
Les Hodges also predicts sales will improve as species like snow crab and lobster fill the market void left by king crab, the supply of which is down 80% because of reduced landings in Alaska, and the U.S. ban on Russian product.
U.S. imports of Canadian snow crab soared in June — up almost 50% from May, and up 26% year to date through June.
The FFAW-Unifor and Association of Seafood Producers are scheduled to start negotiations in September on 2024 seafood prices.
The provincial government is apparently leaving it to the union and processors to work out problems with the fish pricing system.
The Furey administration pretty much did the same after the 2022 season, and did not consult with enterprise owners directly.
HOW DID THAT WORK OUT?
The 2023 season has been pretty much a shit show between the six-week crab tie-up, trip limits, fishing schedules, the elimination of the 20% tolerance, and even today with the delay in buying other fish like cod.
The crab deal the FFAW signed off on to end the six-week tie also included — for the first time ever — a threshold for price reconsideration of $6.01 US on the Urner Barry index.
The season is almost over and the Urner Barry only hit the $5.50 US mark last week.
Why did the union give up its right to ask for price reconsideration at any point, and how much did the inshore fleet lose because of it?
Tens of millions, I'm told.
NEGOTIATED FORMULA FOR SNOW CRAB
There's talk again (like last fall) of a negotiated formula for setting the snow crab price, as is the case with lobster, halibut and lump roe.
Only when it comes to lobster the fish price-setting panel itself has questioned whether the inshore fleet is getting a fair market return.
The lobster pricing formula sets a price as if lobster purchased one week goes to market the next, when processors here and across Atlantic Canada have built holdings tanks so they can sell to the market later in the year when the prices have risen.
Asked by SEA-NL for a review, Labour Minister Bernard Davis said he would take it "under advisement."
That's ridiculous; a review should be automatic.
I'll say it again, pricing formulas cannot work in terms of delivering a fair market return to the inshore fleet unless they are based on actual market receipts, and processors don't want to go there.
As for the definition of a fair-market return, I addressed that in the last post: Inshore fleet's market shares all over the map — 9% of U.S. cod price, 27% of crab, & 58% of lobster
That's one monumental mess, and the response is to carry on as if the industry is normal.
Ryan Cleary,
Executive Director-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.