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Lobster market still unsettled, but prices up some

1/2/2009
By Laurie Schreiber, Bar Harbor Times

BAR HARBOR – The price of lobster is back up slightly, but the autumn’s steep dive has got fishermen and processors contemplating how to manage their businesses for the future.

“Everything is still in a state of flux,” said Maine Lobster Promotion Council executive director Dane Somers. “Things are okay, but not good.”

Many communities in Maine came together over the past couple of months for special lobster-eating events, in support of their local fishermen. On a recent weekend, folks in Southwest Harbor turned out in force on a frigid day to enjoy lobster stew, eggrolls, and the like. Two of the biggest events were held in Boothbay Harbor and Stonington. In Boothbay Harbor, about 6,000 people came out to buy lobster in about six hours.

Restaurant and retail chains have also supported the industry through special promotions.

Anecdotally, Somers said, it seems the promotions have been helpful for local lobstermen.

“Lobster still has the ability to draw people and to attract interest,” he said, “particularly through the fall and through Thanksgiving, and now through Christmas and the New Year.”

Still, he said, “Everyone is in ‘wait and see. Let’s see what happens over the next three or four months.’”

He continued: “There are things we can control and things we can’t control. We can’t control the global economic mess. We can’t control its impact to the industry. But what we can do as an industry is work together.”

Boat prices for now are looking a bit better than they were a month ago, when lobstermen were earning as low as $1.90 per pound.

The sudden drop was attributed to a variety of factors, all linked to the generally worsening state of the global economy. Consumer demand for luxury goods is down in general.  Much of the processed, frozen lobster is purchased by cruise ships and casinos, which also had decreased demand. Limited credit availability as a result of the collapsing Icelandic banks shut down major Canadian processors; Canadian processors purchase over 70 percent of Maine’s catch. 

It is estimated that the October lobster catch earned Maine fishermen less than $20 million, down more than 67 percent from a high of more than $60 million in October 2005. 

Currently, boat prices are ranging between $2.10 and $2.75 per pound, with some fishermen earning $3 per pound.

“It’s at a level where it barely makes sense to keep product moving,” Somers said. “The big question is, what’s going to happen through 2009. So everybody is being conservative.”

Canadian processors have returned to taking Maine lobsters, but at conservative levels, he said.
The Governor’s Task Force on the Economic Sustainability of Maine’s Lobster Industry has finalized a request for proposals designed to move the industry into the future.

The Department of Marine Resources is soliciting the proposals, which will be aimed at conducting a comprehensive analysis of marketing, business, and management strategies to ensure the long-term viability of the fishery and to increase profitability.


“Although there was little that could be done in the very short-term to mitigate the forces that were negatively impacting boat price,” the RFP says, “it is felt that the industry could undertake some restructuring in terms of its marketing, business, and management strategies that would make it less vulnerable to similar circumstances in the future.   There are nearly 5,700 commercial license holders, and the lobster fishery is critically important to Maine’s coastal communities and statewide economy.”

The analysis will result in a comprehensive plan for a business and marketing strategy for Maine lobster, and the comprehensive plan will present a blueprint for implementation, including timeframes, costs associated with various activities, and expected outcomes.  A total of up to $150,000 may be allocated toward this research and implementation of the resulting recommendations. 

More specifically, the goal is to identify: opportunities for expanding and diversifying both live and processed markets for Maine lobster; improvements and expansions of the infrastructure in Maine, including processing capacity and state-of-the-art technology that maximizes the quality of lobster landed in Maine, and provides flexibility of product movement; opportunities for increasing the range of value added lobster products; possible changes to the structure of the lobster industry in terms of volume, quantity and timing of product landed; Best Management Practices for harvesters and dealers to increase product quality and profitability; methods of protecting and promoting the Maine lobster brand in the global marketplace, including analysis of the value of Marine Stewardship Council certification, product substitution and food safety; and alternative business models.

The contractor will be expected to provide the Task Force with preliminary recommendations for their review, and the Task Force will consult with the lobster industry.

A copy of the RFP detailing specifications may be obtained by contacting Deirdre Gilbert by telephone (207-624-6576), by submitting a request in writing to Maine Department of Marine Resources, 21 State House Station, Augusta, Maine 04333-0021 or by downloading from the Internet at: www.maine.gov/dmr/rfp.

Proposals are due by Jan. 12.