Saturday, 11 May 2013

Lobster Strike : Fighting the Right Battles

I fully support and admire Maritime lobster fishermen for tieing up their boats when they discovered shore prices set around and under $3.00 a pound,  well below their cost of production.  Anyone who's read this blog knows I worry that farmers and  fishermen have been playing Survivor for the amusement and enrichment of food processors, brokers,  and retailers for too long.  Working to control the supply of commodities is really the only way to fight back, and that's just what the fishermen are trying to do.   It goes against the instincts of primary producers to work this closely together, and there are various legal restrictions limiting what's possible, but taking a stand that 1960's prices are not enough in 2013 is the right thing to do.

The fishermen are now fighting the low prices on three fronts. They've stopped fishing (writing this late Saturday May 11),  blockaded two processing plants in Beach Point and Georgetown (PEI Courts have ordered  the blockades be removed), and are now getting ready to stop trucks of lobster coming  from the Madeleine Islands and bound (we're told) for New Brunswick and the United States.

A couple of things that need more attention. The increased role of brokers in the lobster business is a major change in the last few years. There was a time when PEI plant owners would travel to the United States and negotiate sales face to face with buyers. Both knew the kinds of prices they needed to keep their businesses going and the importance of building trust and relationships. Brokers are a little different, they are true middlemen, and here's the important part, their business is built on "margins and volume", a percentage of the selling price, or a fixed per pound fee.  The important thing is that the actual price doesn't really matter to brokers, as long as they get their margin, and if they can keep prices low, the better chance to move bigger volumes. I'm not saying that getting rid of brokers would automatically put more money in the pockets of fishermen, I'm saying that fishermen need more confidence that whoever is out there selling is trying to get the best price, not just move the most volume.

The reason for the blockades at the two PEI plants is also important and I think underreported. These are plants that are buying and processing U.S. caught lobster from Maine.  This is something relatively new as well.  Maritime plants have been buying U.S. lobster when the Fall fishing season here is over (October), partly because of the use of foreign workers and the need to keep the plants working into the early winter, partly because of the improvement in the value of the Canadian dollar, and partly because the Maine lobster has been very cheap (see here: and here:

Buying U.S. lobster NOW when PEI fishermen are landing the best quality lobster of the season seems wrong.  Furthermore I'm wondering whether this lobster is responsible for establishing the low shore price (other processors know they'll be competing with the plants buying the U.S. product). It's difficult to demand restrictions on U.S. lobster given Canada's absolute dependence on the U.S. market, but it certainly makes sense for fishermen to try to slow down or stop  this importation.  I don't know the contractual arrangement these plants have with U.S. fishermen, but this would be a concession processors could make to help end this dispute.

I'm not sure about blocking trucks from the Maggies. Fishermen there are getting paid better prices, and the product is going somewhere else. It feels like fishermen simply want another target to get the attention of the media, but hurting fishermen and co-ops elsewhere doesn't make much sense. Building alliances (even with Maine lobster fishermen who need better prices too) seems more constructive.

 It's hard to see how this will end. There's little reason for fishermen to go back on the water to lose money, but at some point Employment Insurance requirements will kick in (unfortunately EI benefits have become a lifeline for fishermen in the last few years) and they'll need some weeks of work.  Fishermen at least should be able to get some insight into the lobster market and whether they're being treated fairly, and everyone else in the lobster foodchain will stop taking the fishermen, and lots of cheap lobster,  for granted.  The only caution. Retailers and restaurants charge big prices because they can, it's what the market can bear. Fishermen need confidence that someone in the marketing chain is looking out for their interests too, demanding prices that will return fair value to the wharf.  Fishermen are standing up for themselves, and that's a good start.



  1. Ian - would it not help if the PEI fishers got together and set up an organization to sell to people direct on PEI? Secondly, with the short season, all this catch has to be sold in a short time - a structural glut. Would a pound make sense?

    1. Thanks for the comment Rob... both would help but... the lobster industry faces the same kind of issues as farmers... 27 million pounds of lobster harvested.. 140 thousand consumers... we can't eat that much.. and lobster fishermen are now allowed to sell directly to consumers which helps the few who do this... pounds were one of the promises the liberals made in the last provincial election.. nothing yet... the tignish co-op has a very sophisticated storage which helps them store lobster.. so did the ocean choice plant in souris which is closed.... victoria had probably the best pound in the province.. but it's now raising halibut... it's definitely part of the solution.. for what it's worth I would suggest fishermen leave a hundred traps on the wharf at the start of the season and only put them in the water when supply and prices merit... the big catches at the beginning sets the trend for low prices and that pattern that has to be broken...

  2. Thanks for your ability to take the full story and break it down so it's understandable.

  3. I agree that fisherman need to make a profit, what also needs to happen is like you said take out the guy who is buying low and selling high. Why is a buyer even needed to sell to the processor's in the first place. Everyone needs to make something the fisherman, the buyer, the processor, the trucker taking the processed lobster, or airplane's for live cargo, the person who put's the lobster whether it be frozen or live onto the shelf, then the check out person at the store, that is a lot of hands all needing a piece from the lobster.