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Shellfish Focus: Snow crab

More product expected from Alaska to offset potential shortfall in Canada

Chris Anderson
November 01, 2005

The news is either good or bad, depending on where you sit, when it comes to potential snow crab supplies for 2006. Though quotas won’t be set until early in the year for the Canadian snow crab fishery, if trends of the past couple of years continue, crabbers in Newfoundland and Labrador may be facing another reduction in total allowable catch, though stocks in other Canadian crab fishing grounds appear more stable.

Still, supply should remain plentiful and any reductions in Canadian snow crab should be more than offset by the increased catch limits in the Alaska fishery. And because virtually all of the product sold is frozen clusters, buyers can expect a consistent supply throughout the year.

Since April, prices for 5- to 8-ounce clusters have been at $3.35 to $3.50 per pound; 8- to 10-ounce clusters at $3.55 to $3.65 per pound. Michael Karppe, director of seafood purchasing for Red Lobster, doesn’t expect prices to change much, or to return to early 2005 levels, which were based on “over-inflated prices to the boats” that led to losses by traders and processors.

“There was a lot of overhang of inventory [early in the year] due to high prices paid to boats, and then when the new season started, the bottom dropped out of the market,” he says.

For the coming year, prices should hold steady.

“With Alaska now setting a quota above what it was last year, I would expect it to remain stable, that is unless we get some announcement out of Canada this coming March that is a shock — but I don’t expect that,” says Karppe.

The vast majority of snow crab sold in the United States is Canadian. Of the 80,000 metric tons of snow crab harvested in Canada in 2004, 49,000 were exported to the United States, only a little less than the 51,000 metric tons in 2003. The total Alaska catch pales in comparison, at roughly 12,000 metric tons per year in 2003 and 2004.

Early this year, wholesale prices for snow crab were $1 per pound above current prices, or in the mid-$4-per-pound range. When the Canadian snow crab fishing season got under way in April, few boats took to the traditional fishing grounds off northern Nova Scotia, Newfoundland, Labrador, Prince Edward Island and Quebec. Canadian crabbers were protesting a new provincial production system that spread the quota among all the processors.

While the processors were waiting for new product to come in, they were still trying to get rid of 2004 inventories, which the processors purchased at relatively high ex-vessel prices. In 2004 the per-pound price processors paid fishermen reached a high of $2.47 and ended the year at $2.26 per pound, according to data published by the Fish Harvesters Resource. The result was a wholesale price of more than $4 per pound for frozen clusters.

Tom Whiteside, national accounts sales manager for Southstream Seafoods in Warwick, R.I., says that high a price for 5- to 8-ounce clusters simply can’t be supported in the market.

“Once you get that high, you lose a portion of the market, particularly the Asian market, which is very price conscious and will find other products to substitute,” says Whiteside.

When prices were negotiated for the first landings of 2005, the ex-vessel price had fallen to $1.60 per pound and fell rapidly to $1.39, where it stayed until the season ended July 30. The result was a return of wholesale prices in the $3.30 to $3.60 range.

Meanwhile, the Alaska snow crab resource continues to rebound. A recent report from the Alaska Department of Fish and Game shows that stock levels in Alaska waters increased 68 percent in just one year.

As a result, new quotas — along with an expanded snow crab fishing season — have people hoping for even higher catch limits in the future. The Alaska snow crab harvest may never return to the heady days of the late 1990s, when harvests were up to eight times greater than they are today.

Nonetheless, the quota for 2006 was raised by nearly 85 percent over 2005 levels, to a total allowable catch of just more than 37 million pounds, up from roughly 20 million pounds in 2005.

Other changes in the fishery management plan for Alaska snow crab include moving to individual fishing quotas (IFQ) and lengthening the season from its traditional month beginning in mid-January, to a season that runs from October 15 through May 15 in the Bering Sea and to May 30 in the western Alaska fishing region.

The longer season and the new quota system should eliminate what has traditionally been a derby-style race for crabs, says Arni Thomson of the Alaska Crab Coalition.

“We think that this will help stretch the season out, which is geared to the biological season of the crab. We may eventually be able to establish new markets for the crab based on this,” says Thomson.

Whatever happens in the future, it is not expected to have a big effect on the main market for snow crab, which is almost entirely frozen clusters.

Thomson didn’t expect many Alaska boats would head out to fish for snow crab at the season opener, and only a few were expected to start Nov. 1.

“Most people feel the crab is in better condition later in the year,” Thomson says. “But we will have some boats doing some experimental fishing in November to find out the condition of the crabs.”

That makes sense to Karppe, who expects that much of the Alaska snow crab catch will still come into processors in January, when processing of other products has died down.

“If it is a temporary workforce they need for snow crab, [the longer season] won’t necessarily be easier for the processors, who will want to bring in the labor for a very short time.

“I don’t expect to see Alaskan crab until February.”

Product standards
It’s a good idea for snow crab buyers to develop a set of standards for the product, including color and appearance, and to find processors who can meet these standards. Buyers should check for short weights, and net versus gross. Also be on the lookout for product that is not sorted properly, with good product packed with bad in the same box. Also look for broken crab.

“Sometimes, with a 30-pound box, the top will have beautiful crab, but when you get to the bottom there are 2 or 3 pounds of broken crab pieces,” says Karppe.

“We have set a standard of no more than 3 percent broken. [The crab] is very brittle and I think the industry standard is about 5 percent.”

 November 2005 - SeaFood Business 

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