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July 1, 2009

Maine lobster industry still hurting

by Sandra Dinsmore

It's been a lose-lose situation for lobster fishermen and dealers this spring. The low $3.25 per lb. boat price (the price paid to fishermen) for superb hard shell lobster this spring left both worried about how low the price might drop when shedders come on the market.

By mid-June lobster was in short supply as the animals hid to protect themselves from predators while shedding hard old shells and waiting for soft new ones to harden.

For fishermen low prices for low catches meant more lean paychecks. For dealers it meant coping with increasingly smaller margins (what they make on what they sell rather than the number of lbs. sold.). Reports from Gloucester, Mass. confirmed Maine fishermen's and dealers' fears: buyers had gone on a split boat price: for hard shell, $4.50 per lb.; for shedders $2.50 per lb.

"There's no way we can make it at that price," said veteran Stonington fisherman Mike Shepard. "It hasn't been sustainable all spring, even at $3.25 per lb. If you're lucky, you're maybe breaking even. You really have to make $5 per lb., so much goes back into expenses."

"Gear loss has been crazy this year," he said, explaining that many offshore fishermen lost a lot of trawls due to the new sinking rope lying flat on the bottom, unable to be grappled up. He said, "If you lose a trawl, you've lost $1,000."

As for sustainable fishing, Shepard said that ever since last fall when the price went to $2 per lb., "They never recovered from that. There's no way they can. Poundage was good," he recalled, "but the paycheck barely paid the bills."

Vinalhaven fisherman Walter Day agrees fishermen are hurting. He mentioned boats with mechanical breakdowns and fishermen, "hunting for money to do it." But he thinks $2.50 per lb. would give him 50 cents to pay for bait and fuel and $2 to take home, though admitted, "I don't have a lot of overhead and don't have lot of wants." He said, "The ones I feel bad for are the young people. If they have to get out [of fishing], they'll never get back in." Asked why, he said banks would never lend fishermen start-up money the way they used to.

Asked how the spring lobster season had been thus far for dealers, Portland's New Meadows Lobster dealer Peter McAleney said, "It's all price-driven holidays. It's not just lobster, it's the whole thing all over the country." Asked about business between holidays, he replied, "Nothing," echoing what lobster dealers from the Canadian Maritimes to New Jersey have been reporting about sales and restaurant attendance dropping, cruise lines and resorts reflecting the poor economy with lower orders.

For the last six months it had been as if the country went into hibernation during the week, coming out on weekends if the weather was good. The exception was holidays. Dealer after dealer reported pent-up holiday demand, followed by a dramatic post-holiday slump.

For Mother's Day the Hannaford chain offered low-priced hard shells from $5.49 per lb. to $7.49 per lb. depending on size. After Memorial Day, dealers tried to raise the price, but had to back off when the public refused to buy at the higher price. Dealers then prepared for the Father's Day market according to McAleney, who is also president of the Maine Import Export Dealers Association. "We all-Maine and Canadian dealers-got together and said, Let's do Father's Day specials. The price is right." They set up deals and specials, locking in prices all along the east coast and as far inland as the Mississippi, and it worked, but McAleney said, "Demand outdid supply, so the price rose," which meant dealers who'd locked in prices got caught. He also acknowledged artificial price manipulation by the biggest dealers. All dealers spoken to agreed.

"The monopoly dealers have thousands of lbs. of lobster put away and are pushing the price to suit their fancy," said a knowledgeable source. In other words, these big dealers bought those thousands of lbs. well in advance at rock-bottom prices ($3.25 per lb.) and held that product in cold-water storage systems or tidal pounds. Then they took the lobster out of the pounds before the holiday to ensure that the Maine fresh-caughts were not cheaper than their pounded product, the source said, and forced the boat price up to $4.25 per lb. between June 13-17, so they would make a dollar for every lb. of lobster they sold.

After the price had jumped a dollar in five days, word leaked out that the big guy called the co-ops he controlled and told them to raise the boat price to $4.25/lb. and that he'd pay "the right commission." Unfortunately, the higher prices didn't help fishermen because they came during the period of low catches, though McAleney said, "If there had been a significant amount of lobster caught by Maine lobstermen, the price would still have been high, but it would have helped their pocketbooks a lot."


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