Left-over inventory and inflation could take a bite out of N.L. snow crab prices this year
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Trevor Jones has been in the fishing business long enough to know that you can’t predict a year’s success until the last pot is hauled in and the nets are stored.
Jones owns a 65-foot longliner – the Samantha Nathan – and carries on the family business started by his father.
The Robert’s Arm man has been in this business for 33 years and has seen a lot.
He has lived through the moratorium on northern cod, hunted seal, seine and capelin.
In recent years, the snow crab has become the most important catch.
Last year, crabs made up just over half of his company’s sales.
Record high prices – even with a drop from $7.60 to $6.15 per pound earlier in the season – helped cushion the shutdown of mackerel fishing and the no-go for capelin.
Jones fished crabs for a lot less.
“I’ve been fishing crab for as little as 90 cents a pound,” he told SaltWire. “We saw $2.50 a pound in one year (2004) and thought that was tremendous.”
Ask him to predict where the price of snow crab might be when the 2023 season starts in April and he’ll tell you that’s impossible right now.
Except there’s a lot of talk on the wharfs and the snow crab captains are worried.
His gut feeling is that there isn’t as much optimism today as there was a year ago.
Newfoundland and Labrador catch and process the most snow crab in Atlantic Canada.
Thanks to a 30 per cent quota increase last year, fishing harvesters have landed around 110 million pounds of crab in that province.
With an average price of $6.88 per pound, the shipyards figured out a record-breaking $758 million per year.
Eventually, higher catches and higher prices were a problem.
Snow crab markets declined in the US – the largest customer for Atlantic Canadian snow crab.
Seafood processors in the Netherlands say there are still snow crabs in cold storage from last season. How much, they won’t say, but export figures available from Statistic Canada suggest there is a lot.
The 2023 crabbing season is just eight weeks away.
Typically, some of the larger boats — the 55- to 65-foot boats — head out to plant their pots in the first week of April.
If crabs from the 2022 season aren’t sold by the end of March, “it’s going to have a significant impact on us,” Jones said.
Tough negotiations ahead
There’s a lot to sort out before this season starts and not a lot of time to do it.
Paul Grant, executive chairman of the Association of Seafood Producers (ASP), told SaltWire that snow crab price negotiations are scheduled to begin the week of March 20.
While no one seems to like the pricing mechanism that is in place now, there doesn’t seem to be much momentum for change.
Last year, Bernard Davis, the province’s labor minister, hired a consultant to examine the mechanism used to set fish prices and to propose a new way of negotiating.
In his final report, David Conway recommended that the government, the ASP and the Fish Food and Allied Workers (FFAW) begin discussions on a new crab pricing formula by November.
With senior management changes at both FFAW and ASP – ASP’s chief executive left for another career opportunity and FFAW’s president resigned – talks of major changes to the pricing model were pushed to the background.
Although the discussion eventually got going, there may not be any major changes for this fishing season.
Grant said two “fact-finding meetings” were held this month, but: “It’s a very complex issue and not something that can be done quickly.
“Whether we finalize an agreement for this year or if it would be something we could continue to work on next year. . . that remains to be seen. But we will certainly be doing the exercise of exploring opportunities for the upcoming crab season (season) as it could be very, very beneficial for everyone,” he said.
In a post on its Facebook page this week, FFAW said it had met Minister for Fisheries, Forestry and Agriculture Derek Bragg on January 25 and outlined its concerns about the upcoming fishing season and the pricing process.
The union alleges, among other things, that certain processors have colluded to undermine collective bargaining and that some companies have refused to pay the set minimum price for crab and other species.
They also reiterated their long-held theory that the lack of processing capacity and competition for snow crabs is hurting harvesters, resulting in “excessive delays between last season’s fishing trips and the inability of harvesters to sell their catch.”
This year, however, more processors are queuing up thanks to a decision by the province’s fish processing licensing committee in 2022 to issue two new crab licenses.
Grant counters with a different view.
“Splitting the pie even more isn’t the solution,” he said. Adding more processing capacity could mean less work at other plants.
Last year, workers at a St. Lawrence crab factory protested the new processing licenses, fearing they would lose weeks of work if their factory lost snow crabs to another operator.
As for those travel restrictions, Grant said getting all the crabs ashore in a short amount of time wouldn’t help anyone.
On the one hand, the cold storage capacities in the province are limited.
“There has to be some sensible way to expedite this fishery so that product comes ashore in a reasonable time frame to ensure quality (and) it gives people meaningful employment rather than working 30 days straight and then are they unemployed.”
Meanwhile, FFAW President Greg Pretty said the current structure “endangers the integrity of the final offering selection”.
He said the grievance process is lengthy, costly and broken (and) “the provincial government’s evasion of responsibility and allowing large corporations to escape punishment for high levels of civil disobedience only serves to normalize disruption.”
If the tone of those words is any indication, there could be some tough negotiations before the crab season begins this year.
Provincial fisheries minister Derek Bragg says it’s what keeps him up at night.
“There’s so much that scares me,” he said in a recent interview, “market conditions, fuel prices, whatever.”
The 2022 season began, like many of them, with protests at the Confederation Building in St. John’s.
Last year FFAW demonstrated that it is demanding more shrimp processing licenses and allowing buyers from other provinces to level the playing field for harvesters by creating more competition for the catch.
Bragg said he won’t be surprised if he faces a different angry crowd this year.
“I’m pretty sure about that,” he said, noting, “When I met up with Greg Pretty last week, one of his comments was that they’re going to take it to the streets.”
Bragg can only hope it doesn’t come to that.
“I’ve sometimes been accused of being on the ownership side, but what I say about that is, this is like a wheel, it doesn’t turn, it doesn’t move until every spoke works.
“They need the harvesters as much as they need the processors and everyone who works in the plants and the truck drivers.”
The provincial economy also needs the money.
“This is a $1.2 billion fishery for our economy that we can’t afford to lose two cents of,” Bragg said, adding, “I have knots in my stomach. I won’t sleep until I know fish are landing and we’ve made arrangements.”
At Robert’s Arm, Trevor Jones reflects on all the things on his to-do list for the weeks leading up to April.
As chairman of the 3K Crab Committee, union meetings and DFO science meetings are on his agenda.
There is also the task of preparing the boat for another fishing season.
Inflation bites him hard.
It costs more to fill up the tanks for each fishing trip, and insurance premiums alone cost him $25,000 a year, double what it was a few years ago.
“To run our company now, it’s two or three times what it was last year,” he said.
He wonders if he might have time or if it would even be feasible to go seal hunting for a few weeks before the crab starts.
He’s skated his boat before, but made a pass last year.
Seal season overlaps with crab season and with higher crab prices and a gut feeling prices wouldn’t stay high for long, he knew it was best to get his snow crab quota as soon as possible.
As usual, uncertainty is the theme for another season.
Nonetheless, Jones is determined to stay with this business and hopefully pass it on to the next generation.
Two of his boys now fish with him and his eldest son, and the boat’s namesake, Nathan, is co-captain in the wheelhouse.
Jones says he never pushed them to get involved in the fisheries, but they saw their future there and he never discouraged them.
Even if there isn’t that much money to be made from this year’s shrimp fishery, he said, they’ll keep going and look for new opportunities — maybe capelin this year, maybe redfish — anything to keep the 65-foot sailboat sailing and that Family business afloat.