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For many, summer in the Maritimes wouldn’t be complete without fresh lobster.
But locals and tourists alike should expect to shell out more for shellfish as prices soar to historic highs.
“Our lobsters are now gold plated. Prices were the highest in commercial history,” says Stewart Lamont, general manager of Tangier Lobster Co. Ltd, a live lobster exporter on the east coast of Nova Scotia.
Pandemic Prize
When the pandemic hit, demand from the export and catering industry plummeted. The landed price for lobster – the amount fishermen receive from buyers at the wharf – has dropped to $4 a pound.
“There was an initial glut of lobsters on the market at the start of the lockdown, but then it ebbed the other way,” says Colin Sproul, president of the Bay of Fundy Inshore Fishermen’s Association.
Sales of live and processed lobster rebounded after the first wave of COVID-19.
Prices started to rise with demand and have continued to rise ever since.
Canadian lobster exports reached a staggering $3.26 billion last year, beating the previous record high of $2.59 billion set in 2019 by more than 25%.
With many consumers saving money during the pandemic and limited travel or restaurant meals, the crustacean long considered a luxury item for special occasions has become one of the best sellers in the United States.
“Americans have been buying lobster during the pandemic like they never have before and that’s driving up demand and price,” says Geoff Irvine, executive director of the Lobster Council of Canada.
While processed lobster – meat and tails – was in high demand in the United States, sales of live lobster increased in Asia.
“There is unlimited demand in Asia for Canadian lobster,” says Sproul. “It’s a premium product and we have a good business relationship.”
Strong demand, coupled with lower catches during the winter months, sent prices ashore skyrocketing to $19.50 a pound.
“The highest dockside price I’ve ever heard of for lobster in my life was a few weeks ago at $19.50 a pound,” Sproul says.
Spring lobster fishing
Prices have since dropped to around $14.50 this week and could drop further during the spring lobster fishery.
The opening of several lobster fishing grounds across Atlantic Canada in the coming weeks should boost supply.
Thousands more fishing boats will hit the water traps. Additionally, landings – the catch or total weight of lobsters caught and sold – also increase in warm spring weather.
The extra supply should dampen prices, Lamont says.
“We are playing with fire when we pay prices that cannot be passed on to the market,” he says of the record lobster prices.
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If prices rise again to $20 a pound and stay there, some restaurants and grocery stores could stop selling the shellfish altogether, Lamont says.
“We have visitors from all over the world who come to Nova Scotia to experience our seafood, but at current prices it’s really not accessible,” he says. “We could start to see lobster taken off menus.”
Irvine of the Lobster Council says high lobster prices and exports are benefiting the region’s economy.
Still, he admits it can be more expensive for locals to pick up a boiled lobster at Sobeys for supper.
“It’s hard for people in Atlantic Canada if they want to buy lobster because we export so much at high prices,” says Irvine. “It can be difficult for local people to afford it…but our goal is to maximize economic value.”
Unsustainable prices
But Lamont says land prices approaching $20 a pound are unsustainable.
“We have this concept of the poor fisherman of 50 years ago, but today’s fisherman are earning extraordinary incomes,” he says.
Stories of lobster fishermen raking in half a million dollar income and fishing towns awash with shiny new trucks abound.
But the reality is that fishermen also face crippling inflation – on top of the heavy debts many take on to join the lucrative industry, experts say.
Rising fuel and labor costs, large loans on boats, licenses and other equipment and ongoing maintenance are all eating away at high shore prices, they say.
“For a lobster boat that holds about 10,000 liters of fuel, you’re looking at a fill-up of up to $18,000,” says Sproul. “Wages are also high because it is a very demanding job and there is a component of danger.
High operating costs add to the initial cost of membership in the fishery, which can reach up to $5 million once license, boat and lobster traps are counted, he says.
Meanwhile, the cost of bait used in lobster traps is expected to rise after Fisheries and Oceans Canada announced the closure of commercial mackerel and commercial bait fishing on the East Coast, citing concerns that stocks in decline have entered a “critical zone”.
“The biggest source of bait has just been eliminated from the industry,” says Sproul. “We will have to import bait and it will cost us more.”
The higher cost of bait is just one of many factors that could affect prices, Irvine says.
Inflation, uncertainty from surging COVID-19 cases, and the potential impact of Russia’s invasion of Ukraine on shipping and demand could all influence lobster prices, he says.
“The big question on everyone’s mind is what’s going to happen when all the seasons open here next month. We expect the market to stay good, but there are a lot of variables. .”
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