Squaring the seafood circle: snow crab $17.95/lb US at Washington market vs $2.20/lb Cdn at NL wharf
On Saturday, April 8th, snow crab was selling for $17.95/lb US at "The Wharf" in Washington, D.C. a popular area for seafood shops and restaurants in the U.S. capital, while back here at home the day before on Thursday, April 7th, the provincial government-appointed price-setting panel set the crab price to be paid to the inshore fleet to start the 2023 season at $2.20/lb Cdn.
In Newfoundland and Labrador, when the union (FFAW) and processors/buyers (Association of Seafood Producers, ASP) can't agree on the price of a particular species, the decision is made by a three-person pricing panel, which must choose one price or the other (even when the "fair price" is in the middle). The system is called final-offer selection, and often does not reflect the ultimate market price.
That's a hard seafood-pricing square to circle: $17.95/lb US at a Washington market vs $2.20/lb CDN at a Newfoundland wharf.
In setting the snow crab price late last week, the pricing panel chose the $2.20/lb ASP offer over the $3.10/lb the FFAW had on the table.
And, of course, the lower price came down on the Thursday afternoon of the long Easter weekend, followed almost immediately by the coincidental decision by Fisheries and Oceans Canada to open the commercial snow crab fishery the very next day.
Fair to say DFO treats NL fishermen like sheep? (Yes.)
The FFAW's Greg Pretty went off his head at the $2.20/lb price — keeping in mind it was only 90¢/lb less than the union's offer — but it's a devastating drop any way you look at it from 2022's lowest crab price of $6.15/lb.
$6.15/lb to $2.20/lb = 64% drop in income.
(Had the panel chosen the FFAW price of $3.10/lb the drop in price still would have been 50% from 2022.)
Devastation no matter what the panel did. (The panel's written decision isn't out yet.)
Under the province's ludicrous/legislated (either works) fish-pricing system, fishermen are not allowed to strike, but plants can refuse to buy. (Processors can also truck/ship in crab for processing, but fishermen can't truck their catches out.)
And the FFAW was perfectly good with the system until last week's crab price decision came down.
STRIKE OR TIE UP?
As with the recent controversy over the snow crab biomass in 3L, any protest could just as easily be held at the FFAW HQ as Confederation Building.
The province ordered a review of the fish pricing system in July 2022 (after SEA-NL called for it) in light of the chaos in last year's fishery with prices that failed to kick-start commercial fisheries.
The end result of that review (which did not consult fishermen directly — not a single meeting actually) was a few tweaks to the existing final offer-selection model, as well as continuing with the ban on strikes and lockouts.
Again, the FFAW was FINE with the panel system until last week's snow crab price came down.
There's no doubt there's been a drop in the U.S. market for Canadian snow crab, and cheap Russian snow crab has flooded Asian markets like Japan and South Korea.
The latest review by seafood pricing expert Les Hodges states that Inflation woes resulted in consumers turning back to meat, poultry, and pork.
At the same time, U.S. imports of snow crab are up over 800% vs. the same period in 2022 (which SEA-NL reported in early march.)
Local processors said weeks ago they were beginning the 2023 season with a $100 million-plus anchor around their necks in terms of last year's inventory.
The market price for snow crab in the U.S. or Asia could skyrocket, but the anchor must be dealt with first.
How to restore trust?
Once again, an electronic auction system open to outside fish buyers and with catches sold to the highest bidder is the way to go in terms of complete transparency, a free and open market, and the best possible price for your fish.
Anything less amounts to market manipulation.
That's pie in the sky, of course.
In the meantime, the inshore fleet is better off not fishing snow crab until there's a price reconsideration.
One last point, in the FFAW's submission last September to the province's fish pricing review, former FFAW President Keith Sullivan acknowledged that the current panel system has created "some stability for setting fish prices in a timely manner."
But then that created "other avenues for parties to delay, stall or cancel fisheries."
Those avenues include the direct control that some buyers/processors have over harvesting licenses.
It's also rumoured that some local processing companies have bought into processing companies on the mainland, which could be another way to influence local prices.
Until those elephants on the wharf are addressed, any changes to the pricing system amount to lipstick on a pig.
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.