Inflation in the US is driving down prices for Canadian lobster and snow crab

Prices for Canada’s two most valuable seafood products have fallen sharply this year as consumers fear the impact of rising inflation.

The price of snow crab fell in 2022 by 60-65%, while the price of lobster fell by about 35%.

Trade data presented this week in Halifax by veteran US analyst John Sackton, president of Seafood Datasearch Market Consulting, show that demand for shellfish has fallen in the key US retail market.

“It’s like a high tide in the Bay of Fundy. Everything is sold out and we’re seeing lobster and crab doing the worst of any supermarket item,” Sackton told CBC News during a break at the annual meeting. Nova Scotia Department of Fisheries and Aquaculture Ministerial Conference.

Affected by inflation, consumers in the US are turning away from expensive seafood

During the pandemic, demand for all types of frozen and fresh seafood has pushed Nova Scotia’s industry to a record year in 2021 with revenue of $2.5 billion, led by two shellfish and crustaceans.

Other Atlantic provinces were also booming.

But high prices for frozen snow crab and lobster, along with a small increase in the price of live lobster last year, will melt away in 2022.

This week’s Halifax Seafood Show received some sad news about two of Canada’s most valuable exports. (Robert Short/CBC)

“And the reason for that is because consumers didn’t accept high prices at the same time that they started to worry about these other issues, like high gas prices, inflation and concerns about a lack of support,” Sackton said.

“What are they refusing? They’re dumping snow crabs, lobsters, frozen seafood, and that’s really what’s causing this change in price and market value.”

The winners

The lobster and snow crab crisis has eliminated many other seafood.

Saxton mentions farmed Atlantic salmon, oysters, mussels, northern shrimp, halibut and frozen groundfish.

Jeff Irwin of the Lobster Council of Canada said the biggest price drop in the lobster sector was for processed and frozen lobsters. (Robert Short/CBC)

“These sectors of the seafood economy are not participating in this market collapse and turnover caused by the collapse of lobster and snow crab,” he told the conference. “This should not obscure the fact that scallop producers in Nova Scotia are having a great year with increased sales in Europe and the United States. This should not obscure the fact that oyster markets are booming.

Back to earth on lobsters

According to Jeff Irwin of the Lobster Council of Canada, the processed side of the lobster industry has paid the price.

He said market diversification, a premium product that is always available and environmental certification should help the company weather any recession.

“2021 was fantastic. It was an anomaly. It didn’t follow the trajectory we were on,” Irwin said. “So we’re going to come back down to earth a little bit.”

Which means on the wharf in the fishing province

In Canada’s largest lobster fishery in southwestern Nova Scotia, wharf lobster prices hit a record high of $17 a pound earlier this year. Those prices plummeted over the summer in the Gulf of St. Lawrence, where fishermen earned $5.50 a pound.

Canadian industry never switched to the metric weight system.

The industry will be watching prices closely when lobster fishing resumes in southwestern Nova Scotia this fall.

“It’s expected to go down early this season,” Sackton said.

In Shelburne County, a third of all jobs are in seafood

An economic impact assessment of Nova Scotia’s seafood industry released Wednesday shows the stakes in the fishing province.

Peter Norsworthy of Pisces Consulting compiled direct employment in coastal counties using census data.

One county stands out in southwestern Nova Scotia.

Inflation in the US is driving down prices for Canadian lobster and snow crab
Peter Norsworthy released an economic impact analysis showing that the seafood industry directly employs 35% of Shelburne County’s workforce. (Robert Short/CBC)

“Probably the best example would be Shelburne County, where 35 percent of the workforce is directly employed in the seafood industry, whether it’s aquaculture, fishing or processing,” Norsworthy said. “And you can add additional side effects. You know, 50% of the people employed in Shelburne County are directly or indirectly related to the industry.

In neighboring Yarmouth and Digby counties, about one in five jobs is directly related to seafood, he said.

According to the study, the industry directly employs more than 10% of residents in Guysborough and Victoria, as well as 7-10% of residents in Queens, Inverness and Richmond.

Norsworthy, a seafood industry veteran, predicts prices will stabilize at pre-Covid-19 levels and gradually recover.

“But the depth and length of any recession will determine how long the recovery lasts,” he says.

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