After record spring catches filled lobster holding facilities across Atlantic Canada to capacity, inventory is moving both on the live market and through the processing sector, but there are still concerns going into the fall.
“We enter the fall market season with many unknowns and concerns in our key market,” said Geoff Irvine, executive director of the Lobster Council of Canada.
“A change in political leadership in the United States, our largest overall lobster customer, could bring with it import tariffs. Despite recent pushback from the Maine lobster sector, the upcoming U.S. gauge increase remains on schedule for January 1, which will change the size distribution for live and processed lobster and offer opportunities for some and challenges for many on the water and on the shore-side sector. Draft animal transport regulations in the European Union and stronger animal welfare rules in the U.K. could impact live lobster sales in Europe. There has never been a more important time for the Canadian lobster sector to be vigilant, listen to and trust each other and work together to face these challenges,” explained Irvine.
Irvine said with some exceptions, almost every lobster fishing area (LFA) in Canada experienced strong lobster landing volumes in the spring season this year. Some LFAs were up by an estimated 30 per cent while others by five per cent or so.
“Others were down slightly but overall, from LFA 34 in the south to almost all Newfoundland and Labrador LFAs in the north, harvesters had a very strong year for lobster landing volume. The unexpected high volumes caused the shore price to settle at a level that was lower than recent years, which many harvesters balanced out by landing higher volumes of lobster. Given high costs for labour, bait and fuel, those harvesters who had lower than recent average landings felt the affect of lower shore prices most directly. Quality challenges were noted in some high-volume areas with a double moult likely which led to higher than acceptable mortality and market issues. For a two-week period, harvesters were put on daily trip limits in LFA 27 when there were no crates or cold water available and buyers could not manage the volume,” said Irvine.
“At the same time the shore price fell from a record high in March to a level that was commensurate with the extremely high volume of product that was flowing ashore. This caused those areas with shore prices set by a formula linked to the Urner Barry index to be sometimes +/- $1.25 below other areas with similar size and quality characteristics. This large amount of lower priced lobster provided opportunities for some and heavy challenges for others who had to compete with that product for processing or live shipping,” said Irvine.
The live lobster market has been “a roller coaster ride as harvesters and buyers dealt with the shore price collapse from early April until it began to settle as the spring seasons all came on stream in May. Canadian live lobster customers around the world recoiled as prices quoted to them were falling every few days, which kept orders to a minimum and all worked hand to mouth to avoid being caught with high priced inventory. As we enter the heart of the summer, most LFAs have completed their seasons with dealers and live shippers now waiting to see how the Maine catch comes on and how the summer and fall live markets develop,” said Irvine.
Lobster processors “rode the same shore price roller coaster as the live side and given our industry structure, had to buy lobster as shore prices were falling and hope that at the end of the season their costs for tails, meat and whole in-shell will allow for a profitable season. All lobster sector market participants should remember that higher than average live prices in the winter, when there is minimal lobster being caught and in inventory, are not going to maintain into the spring when almost every LFA is producing in the country,” said Irvine.
In Nova Scotia, lobster inventories are starting to be drawn down, but there is still a lot of product, said Kris Vascotto, executive director of the Nova Scotia Seafood Alliance.
“Inventory is starting to move. Folks are saying they are a little bit behind from where we were in previous years. Inventory levels are high, so there is a little bit of concern if it doesn’t start to move, we will be in a bit of a headwind going into the fall season,” said
Vascotto.
While the live market is starting to normalize, there remains a lot of space left to where we need to be this time of the year, said Vascotto. “There continues to be headwinds in some of those markets, the E.U. and China, and they don’t look to be going away anytime soon.”
Vascotto said there are actually concerns if the market will recover to what it was. “They seem reluctant to spend what they have in the past and that’s really effected in the demand,” he says.
As for processed market, demand appears to be quite robust now, said Vascotto.
“Some other sectors are starting to pick up too. One is the cruise ship sector. The E.U. and Asia remain somewhat subdued and they haven’t quite got to where they were in the past but overall, our processing volumes from here and New Brunswick are way up over 2023 because of the volume landed this spring which led to that really active price for raw material. Processing was really the key to maintaining the lobster sector just because we had such high landings, really strong landing in Southwestern Nova Scotia all the way right up to Cape Breton, so the processing sector became very important just making sure we were able to move product to where it should be moved to,” said Vascotto.
