Supply Dynamics:
Canada- (Zone Managed Fishery) February, March, and much of April are typically extremely limited in terms of fishing effort and landing volumes. The next series of major openings in Canada are in early May, which is considered the start
of the new processing season. After a 31.4% YOY volume decline in 2022 US imports from Canada of in-shell tails, import volumes increased by 1.4% in January 2023. After a decline of 35.1% YOY in 2022 US imports from Canada of lobster meat, January imports declined 7.6%. Production and export volumes in Canada for January were very limited and will remain limited until May. Excluding the Covid shortened season of 2020, 2022 In-shell tail import volume from Canada into the US was the lowest since 2011, and 2022 Canada meat import volume into the US was the lowest since 2010.
Maine- Maine landings in February were extremely limited, which is typical for the time of year. Maine landings typically drop off in December, and while there is fishing over the winter, it results in very limited volume until June. Maine lobster landings in 2022 were 97.9 million lbs, tied with 2020 for the lowest volume landed since 2010 (2010 landings were 96.2 million lbs). Some of the decline in 2022 Maine landings has been attributed to lack of fishing effort at low shore prices. Maine lobster landings peaked in 2016 at 132.6 million lbs.
Demand Dynamics:
Live Lobster- High prices in February and March have resulted in fairly soft demand out of China post Chinese New Year. The US and European markets have been a bit more steady, but demand post Valentines’ Day is seasonally subdued.
Processed Lobster- The market has seen renewed interest in meat and especially tails after the low price levels heading into winter. Inventory of tails is extremely limited and robust interest in mid size tails (3-4oz through 6-7oz) is running into very thin inventories, with little replacement until Mid May. Lower meat price levels have also spurred additional menu placement at foodservice, a trend that is expected to continue into the summer months.
Pricing Outlook:
Live lobster prices- With limited winter landings, shore price in Canada is currently around $13.00/lb CAD, depending on the area. Typically, live prices remain at high levels over the course of the winter due to lack of fishing effort and landings. The live trade will generally tube and hold substantial volumes of hard-shell lobster from this season to carry the trade until spring- although volumes are lower this year. Prices typically begin to fall as more fishing effort resumes in April and drop substantially with May openings in Canada.
Processed Lobster prices- Tail prices have accelerated rapidly due to the shortage of inventory, lack of replacement and increased demand. Given the lack of production between now and May, there will be widespread shortages of tails in the market prior to spring. The meat market is also starting to show some price pressure, with renewed interest and lack of inventory, particularly of CK, pushing prices. Increased velocity heading into spring will thin inventories of all types of meat and potentially add upward price pressure.
Prices are subject to change.
3/20/23
