Editor's Note - 2005 Buyer's Guide

Blue crab
Imported blue swimming crab continues to supplant dwindling supply of domestic product

B lue crab usually brings to mind the Maryland crab, Callinectes sapidus, the undisputed “real McCoy” of blue crabs. However, the blue swimming crab, Portunus pelagicus, the imported cousin of the domestic blue crab, has gained momentum in the market in recent years because it offers a steady supply and affordable price.

This has not been the best year for domestic blue crab. For starters, the U.S. clampdown on foreign work visas put a crimp in many processors’ plans, as they were unable to get some of their immigrant workers into the country. As a result, says Jack McGeough of Newport International in Tierra Verde, Fla., there are around 25 percent fewer domestic processing plants.

“About 90 percent of their labor is imported from Mexico,” McGeough says. “The government put a limit on visas this year, so that has really hurt the domestic industry.”

The second major setback for the industry was the single-cell parasite hematodinium, which kills domestic blue crabs. Environmental conditions in coastal bays that are home to large populations of blue crab appear to be most favorable for hematodinium. Outbreaks were reported this summer in several Mid-Atlantic states, including Maryland and Virginia.

The prime season for infection is late spring, with large-scale outbreaks usually occurring in late summer. Generally, hematodinium affects non-migratory crab populations that live in waters with unseasonably high temperatures, high salinity and poor water circulation. While the parasite kills large numbers of blue crabs, it has no affect on consumers who eat meat from affected crabs.

As a result of the declining blue crab populations in Georgia — mainly due to an extended drought, which affected the coastal region where crabs are found — crabbers in that state have asked Rep. Jack Kingston (R-Ga.) for $3.83 million in disaster relief aid.

About $2.3 million of that would go directly to the crabbers, who estimate that they have lost at least that much since the blue crab population began shrinking in recent years. The remaining $1.5 million would be spent over the next five years for studies and research.

The Georgia fishery, which landed about 8 million pounds in the early 1990s, currently accounts for less than a quarter of that total.

In September, the Louisiana crab industry sought to garner support from other states to petition the government to tack on duties to crabs imported from Venezuela and other countries. The effort is based on other successful antidumping cases involving catfish, crawfish and shrimp. A similar effort launched by the domestic blue crab industry in 2000 failed.

To win duties, the industry would have to prove that crabmeat is being dumped in the U.S. market at below fair market price. Louisiana’s $90 million blue crab industry represents more than half of the total commercial blue-crab harvest in the Gulf of Mexico, according to the Louisiana Department of Wildlife and Fisheries.

Despite these potential trade actions, McGeough says the availability and price of blue and blue swimming crab (P. pelagicus) shouldn’t change in the future.

“There is certainly no issue of dumping. There have been rumblings by the Louisiana people again, but I don’t think that there’s any grounds whatsoever.

“[Government issues] have all been really highlighted in the last two years. It should be steady as she goes,” he adds.

According to Louisiana officials, Venezuelan crabmeat can be produced for $4 to $5 per pound less than what domestic processors have to charge just to break even.

Demand for imported blue swimming crab has grown this year, says Steve Harmell, VP of marketing for John Keeler & Co., dba Blue Star Foods. Part of the reason behind that is the year-round availability of the species from different sources around the world, including China, Indonesia, Thailand, India, Pakistan, Myanmar, Venezuela and Mexico.

According to the International Trade Administration, Indonesia accounts for more than one-third of all blue swimming crab imports to the United States.

However, importers of blue swimming crab have their own share of roadblocks to navigate in bringing their product to the U.S. market, McGeough says.

“Between typhoons, hurricanes and the Food and Drug Administration, it’s complicated,” he observes.

Safety issues

The FDA has been tracking chloramphenicol in blue-swimming-crab imports for the last couple of years. Traces of this banned antibiotic have shown up in canned crabmeat, and seven crabmeat exporters — three from China, three from Indonesia and one from Vietnam — were prohibited from bringing their product into the U.S. market earlier this year because samples of their products tested positive for chloramphenicol.

Before they will be allowed to sell their product to the United States again, the exporters must prove that their product is free of the antibiotic. Currently, the FDA can detect trace amounts as little as 0.03 parts per billion.

Therapeutic doses of chloramphenicol, which are 1,000 to 1 million times the levels typically found in food products, can increase the risk of aplastic anemia, a potentially fatal bone-marrow condition.

McGeough says importers have taken steps to ensure chloramphenicol isn’t introduced into the production process, which has been traced to the hand lotions and eye drops crab pickers use, and some are testing product before it leaves the plants.

“It seems to have washed away. There don’t seem to be many instances of it anymore,” says McGeough.

“All you have to do is have somebody touch 1 pound and you’ve got an issue. But it’s something that [the FDA] really started monitoring a few years ago.”

Harmell agrees that importers have put a lot of quality-control practices in place to all but eliminate problems with chloramphenicol.

“The FDA has not exactly made it easy to get product in, but those of us who do a good job on the quality side of things — ensuring the quality of our product in Asia — don’t have difficulty,” he says.

The most popular use for blue-crab meat, both domestic and imported, is crab cakes, which have grown in popularity beyond the Mid-Atlantic and are now in demand across the country. Phillips Foods is forging new markets on the West Coast for its popular crabmeat and value-added products, says Honey Konicoff, Phillips’ VP of marketing.

While consumers on the East Coast prefer the company’s traditional Maryland-style crab cake, West Coast consumers lean toward the new crab and shrimp cake and the Boardwalk crab cake, made with Japanese-style panko breadcrumbs.

“The West Coast is a great opportunity for us. Doors are opening, and [consumers] are receptive to our products,” says Konicoff.

Supply/price trends

In early October, when the fishery was winding down, domestic hardshell sooks (female crabs) were fetching $30 to $35 a bushel, according to Urner Barry. Meanwhile, hardshell No. 1 and No. 2 jimmies (male crabs) were bringing $65 to $70 and $35, respectively.

The price of blue swimming crab has been “adjusted” based on supply and demand, Harmell says. On some items, greater demand has driven prices up, while lower demand has driven down prices on other items. Overall, he says, prices are pretty steady, which has not always been the case for imported blue swimming crab when compared to domestic blue crab.

In early October a 1-pound can of premium blue swimming crab from Southeast Asia was selling for an average of $15.50 to $16.25, f.o.b. warehouse; lump was going for $9.75 to $10.25; special was $6.75 to $7.25; and claw was $4.40 to $4.70.

The season for blue crab from South America is March or April through July, and prices fluctuate greatly, depending upon the season and supply. Fresh product can range from $13 to $17 per pound, and pasteurized can range from $14 to $19.

“If you go back as recent as four years ago,” says Harmell, “you’ll find that those of us who are importing blue swimming crab needed to discount our product to convince customers to buy it because they were so in tune with buying domestic product or fresh product or even product from South America or Mexico.

“Now it’s the other way around. Now the domestic suppliers and those from Venezuela and Mexico have to discount their product because people are so in love with the Asian product because it’s available 52 weeks a year.”

Part of this role-reversal, Harmell says, can be attributed to importers doing a better job getting the message out to the market about their product.

“There’s been a great marketing job done by those of us in this business,” he says. “We’ve taken it from the commodity category and moved it over into a branded item that customers can count on.”

McGeough says there will always be periodic flux in crab prices but for the most part, price remains pretty steady.

“When the new seasons come on, people get nervous,” he says.

Venezuelan crab, which has in the past experienced issues with bacteria, often takes the blame for driving prices down. McGeough says much of the problem with Venezuelan imports have been corrected through pasteurization.

“I know the state of Maryland put a ban on [Venezuela’s] fresh meat because of bacteria counts,” he says. “That changed [the supply] in a hurry, because they ship a lot of crab here during that March-April-May period.

“We pack down in Venezuela under our brand, but we pasteurize it all now,” he adds. “That’s one of the reasons the market was so weak early on in the spring and early summer. But that’s now gone away.”

As a result of the worsening economy in Venezuela, some importers, including John Keeler & Co., have sought alternative sources for blue crab, turning their attention mainly to Asia.

Buying tips

Weight is something buyers should be mindful of. McGeough says they should look at net-weight finished counts of both imported and domestic product.

“They need to start weighing blue crab, which people didn’t do in the past,” he says.

At the end of the day, however, McGeough suggests buyers trust their noses in picking out good blue crab. “If it smells good, it is good,” he says.