Supply Dynamics:
Canada- (Zone Managed Fishery)
The season’s final stretch is now underway, with over 2,000 boats fishing this week in Lobster Fishing Areas around Grand Manan, the Bay of Fundy, and the large areas around Southwest Nova Scotia. The SW Nova season opening was delayed by high winds- which also hampered fishing in November LFA’s. This is a heavily front-loaded season in terms of landings, and typically volumes taper quickly-with most processors are only active for a few more weeks. After December, the limited amount of lobster landed in Canada goes primarily to the live trade as volume rapidly diminishes and live lobster prices increase. The following major openings in Canada are in early May, which is considered the start of the new production season.
U.S. imports of tails from Canada are down over 12 million lbs (33.2%) YOY through October, and imports of lobster meat from Canada are down 6.5 million lbs (33.3%) YOY. Volumes of tails and meat imported into the U.S. are tracking to be the 2nd lowest of the past decade.
Maine-
Maine landings in November were reported as lackluster, hampered by high winds and lack of fishing effort due to relatively low shore prices. Maine landings typically drop substantially in December, and while there is fishing over the winter, it results in minimal volume until June. Maine is tracking for significantly lower landings on the year- as much as 20% lower YOY by some estimates.
Demand Dynamics:
Live Lobster
China’s demand for hard shell lobster picked up a bit in November but has receded in December, with demand recently reported as fairly sluggish, and buyers highly price sensitive. U.S. demand for live lobster could be stronger, and the Europe market is limited. Chinese New Year is Sunday, January 22nd, and there will likely be an uptick in live shipments in January to China to fulfill needs.
Processed Lobster
Lower pricing has sparked some renewed interest in tails and meat, which over time, will increase velocity for both retail and food service. Large tails (bigger than 8-10oz) remain extremely scarce. The meat market is still seeing pockets of lower pricing.
Pricing Outlook:
Live lobster prices
After moving up slightly due to limited landings in November, live prices will likely recede for a portion of December as the influx of lobster coming in from Southwest Nova Scotia arrives starting next week. Typically live prices tick up once landings recede in late December. The live trade will tube and hold substantial volumes of hard-shell lobster from this season to carry the trade until spring.
Processed Lobster prices
The tail market has been going fairly steady for most of the fall season, and with production limited, the longer-term picture points to more stability. Depending on the volumes produced out of the SW Nova season, larger size tails should be available and potentially more attractive prices on those sizes. Despite the relative stability for most of the fall, there will be pockets of discounting on the meat market as offseason usage remains fairly limited and menu placement continues to be a work in progress.
12/12/22
