July 10, 2012
July 20, 2012

Before sunrise last Monday, in a parking lot by the water in Winter Harbor, Maine, a gathering of lobstermen came to a rare consensus: prices were too low to go fishing.  30 vessels in his co-operative have remained in port for a week straight.

Lobster prices at the dock have fallen to as low as $1.25 a pound in some areas-roughly 70% below normal and a nearly 30-year-low for this time of year.

Harbors up and down the coast of Maine are filled with idle fishing boats, as lobster haulers decide that pulling in their lobster pots has become a fruitless pursuit.

Prices at the dock have fallen to as low as $1.25 a pound in some areas—roughly 70% below normal and a nearly 30-year-low for this time of year, according to fishermen, researchers and officials. The reason: an unseasonably warm winter created a supply glut throughout the Atlantic lobster fishery.

Those prices have officials and lobstermen concerned about the fate of one of the state’s most vital industries. For some people it will be disaster, they are going to go bankrupt.

Retail lobster prices in Maine have started to fall along with the glut, and some fishermen have begun selling lobsters out of their trucks for as low as $4 a pound. But consumers elsewhere in the U.S. aren’t likely to see bargains. The Maine lobsters that currently are in season can’t be shipped long distances due to their soft shells, and retailers have other fixed costs that limit big price drops.

Lobsters are a $300-million-a-year industry in Maine. Along with Canada, Maine’s thousands of independent lobstermen supply the vast majority of the world’s clawed lobsters, which have seen a population boom over the past three decades due to rising water temperatures and overfishing of cod and haddock, their main predators.

Profit margins are low even in good years, but this summer the problem has intensified. The wholesalers that buy directly from lobstermen are paying less than it costs for many boats to turn a profit.

The warm winter had two effects. It allowed Canadian lobstermen, who typically fish in the early spring, to bring in large catches due to the mild temperatures. And the lobsters that Maine fishermen catch in the summer months—the ones that can’t be shipped live due to their softer shells—arrived six weeks earlier than normal.

The month of June may have been a record in the state of Maine for catch.  Many businesses are struggling despite traps that have brought in hauls four times larger than normal.

The price slump has led some lobstermen to take drastic action. There have been reports of lobstermen coercing others not to go out fishing in an effort to lower supplies and raise prices back to more normal levels. 

While many are hopeful that prices will recover along with demand as tourists head to Maine for lobster boils and seafood festivals, some worry this season could have a lasting impact.

Source:  wallstreetjournal.com, 7.16.12

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