60% of the projected 100 million pound 2022 Maine lobster harvest will be processed into lobster meat (CK) and lobster tails, with 2 lbs of tails produced for every pound of CK.
The backstory here is fascinating. Half of Maine’s live lobster harvest gets trucked to Canada to be processed into meat and tails. But the Canadian banks have pulled the plug on funding for Canadian processors due to paying too much for raw material (both lobster and snow crab) this spring. Most Canadian lobster processors also process snow crab. It is a high volume, low margin (25-50 cents/lb profit) business where it is not uncommon for a processor to put up three 40,000 lb snow crab containers daily.
This year the price set for snow crab at the beginning of April started out way too high. The price was lower than 2021 but still much higher than the historical average. The bottom line is the producers have $8 in their snow crab, and the market is $6. We are talking millions of pounds of snow crab. Compound that problem with the same producers overpaying for lobster this spring. They have $27 in their tails, and the market is $20. The banks that fund these operations are not seafood people, but it doesn’t take a rocket scientist to figure out you can’t pay $8 and sell for $6 for very long.
The net result of all this is that the Canadian processors have stopped buying Maine firm shells for processing into tails and meat. The live trade is choking on all the volume. Hence firm shell chix this week are $7.25. Take advantage while this situation lasts.
Prices are subject to change