Supply Dynamics:
Canada- (Zone Managed Fishery) The vast majority of the spring fishing season in Canada closed at the end of June. There will be little fishing effort and very little lobster processing from Canada until Fall fishing opens in LFA 25 on August 9th. Landings in spring 2022 were likely down YOY, with some areas reporting substantial declines and others with similar volume.
Imports of Canada lobster into the US dropped significantly in May on a YOY basis. May imports of In-Shell tails and Whole Cooked declined 43.6% YOY, and meat imports fell 36.8%. The expectation is for significant declines in June as well as drops in landings, declines in production of meat and tails (as well as increased Whole Cooked exports to Asia), and issues getting product into cold storage in the US limit volume.
Maine- Volumes in Maine have started to ramp up in July, with significant landings of soft shell/ new shell lobsters reported. Maine volume increases considerably in July, typically at least 4X what is landed in June. It is the primary source of lobster for the industry in July and the 1st half of August.
Demand Dynamics:
Live Lobster- Live trade sales continue to be inconsistent with China’s demand for hard shell product. It is still relatively limited- hurt by continuing covid-related lockdowns in some regions and a US market that has not had the promotional appetite the industry once had.
Processed Lobster- Despite large scale-reductions in May import volume of lobster meat and tails coming into the US (and a likely decline in June as well), the demand picture has been moderate- a contrast to spring of 21′. As spring meat and tail prices have been set at lower levels, the demand for lobster products could pick up over time but will have the continued drag of inflation and declines in consumer spending in the background. Meat is hitting peak season in the New England Market, with velocity picking up significantly in July. Whole-cooked lobster demand from Asia was quite strong this spring, as well as whole raw into Europe.
Pricing Outlook:
Live lobster prices- New shell/soft shell prices in Maine will be priced more attractively than last year, with the processing trade less aggressive in pushing prices given the uncertain consumer environment. At lower price levels, there will potentially be increased promotional activity at retail.
Processed Lobster prices- 2022 Spring Canada processed product entered the market at lower price levels, despite the live hard-shell pricing that was similar to last spring. Pricing has generally leveled off towards the end of June. On tails, July production from Maine lobster will be heavily focused on 4 and 4-5oz sizing, so there could be additional price movement on those sizes. Larger size tails (6-7 and larger) will not be produced in volume until fall. Meat velocity will hit peak season in July and August, which will add some stability in the near term, but there will potentially be some soft shell meat packs hitting the market at lower price levels.
Prices are subject to change.
7/18/2022
