« April 2009 Table of Contents
Top Species: Blue crab
Importers experience extreme highs, lows
By Joanne Friedrick
April 01, 2009
After years of steady prices, the blue-swimming crab
industry experienced one of its most volatile seasons ever in
In the first three quarters of the year, prices soared for
all grades, reaching $23 per pound for jumbo lump and $9 per
pound for claw meat before settling in at current prices of
around $14 and $6, respectively.
Even with double-digit price declines in the second half of
the year, claw and special prices ended up 33 percent and 31
percent higher, respectively, at the end of 2008 compared to
the beginning. Backfin crabmeat prices also stayed higher at
the end of year, up 15 percent. The exception was jumbo
crabmeat, which experienced the same highs as the other grades,
but saw prices fall 17 percent in the third quarter, ending at
the lowest price for all of 2008.
The volatility in the blue-swimming crab ( Portunus
pelagicus ) market was linked in large part to the poor harvest
in Indonesia, which meant higher bidding for the remaining
Prices rose as suppliers sought crabs from co-packers in
other countries to meet customer needs, says Paul Opitz,
president of Phillips Foods' international division, based in
Thailand. While prices rose steadily through the peak
crab-consuming summer months, they then dropped as reduced
demand and the recession took hold in the late third and fourth
quarters. Prices at the end of the year, says Opitz, matched
those of 2006.
Steve Harmell, VP of sales and marketing for Miami-based
Blue Star Food Products, says while prices hit historic highs
in the third quarter, by late in the year, as prices fell,
suppliers were scrambling to sell off their high-priced
inventory. Even into the early part of 2009, he says, "there is
still a great deal of high-cost merchandise on the market."
While Harmell was expecting the industry to become more
balanced as it headed into the second quarter, "this is still a
complex category," he explains, "subject to a great deal of
volatility based on the needs of large users."
He notes that even a single large restaurant chain can throw
the industry for a loop with a request for a large amount of a
single grade, such as jumbo lump.
Opitz wouldn't predict how the imported blue crab market
will fare for the remainder of 2009, but notes, "we're not
seeing the same level of demand (as in 2008)."
Phillips Foods, the No. 1 U.S. crabmeat importer that
claimed a 19 percent market share as of November 2008, sources
its crab from India, Sri Lanka, Indonesia, the Philippines,
Venezuela, Thailand, Mexico, Vietnam and East Malaysia.
Even in an off year, through November last year Indonesia
exported 16.6 million pounds of blue-swimming crabmeat to the
United States. This outpaced China, which exported 11.8 million
pounds and Thailand, an exporter of 6.71 million pounds,
according to National Marine Fisheries Service data.
China, however, is fast becoming a key competitor in the
pasteurized crabmeat segment, registering a 52 percent increase
in exports to the United States in 2008 over 2007, while
Indonesia's numbers fell by nearly 13 percent.
Buyers switch to lower grades
Byrd International in Salisbury, Md., experienced the same
dramatic highs and lows for the crabmeat it imports from the
Philippines, Indonesia and China, says General Manager Kimberly
"The bottom dropped out in late September," says Tilghman.
"That, coupled with the economy, saw an increase in demand for
Byrd sells 95 percent of its pasteurized crab to foodservice
companies. Those distributors base their purchases on what
restaurants are demanding, which these days are the more
economical grades such as claw, backfin and special or even
other species, such as red-swimming crab ( Charybdis
Opitz has gotten pushback from customers on premium grades,
as has Blue Star's Harmell.
"Even fine-dining establishments are going to lower grades
or cutting costs through blending," says Harmell.
Some buyers are exploring cost savings by having Blue Star
customize crab cakes for them, rather than buying the
ingredients to make their own. Blue Star also is innovating
with different delivery methods, such as its refrigerated
pouches, adds Harmell.
Caroline Tippett, director of marketing-strategic
development at Phillips, says the Baltimore company is focusing
on value-added items, such as crab cakes, to meet the retail
and restaurant demand for more protein-based products.
A major initiative within the processing arena, says Opitz,
is sustainability. The blue-swimming crab "is a resilient
resource," he notes, "but sustainability is one of our major
Phillips is one of the founding members of the Indonesian
Crab Producers Association, which is evaluating the status of
the crab stocks, including agreeing on guidelines for a minimum
crab size and initiating an education program for fisherman.
Tippett says while the blue-swimming crab industry has been
sustainable, "it is a data-deficient industry," so
formalization of efforts and information is needed.
Along with moves to preserve crab stocks, Tilghman says
importers are adhering to food-safety regulations so customers
can feel confident in what they are purchasing.
"FDA is taking a stronger look at what is coming into the
country," she says, based on "greater public awareness of where
things are coming from."
She says Byrd follows strict HACCP (Hazard Analysis Critical
Control Points) regulations and doesn't plan to source outside
of its current suppliers in Southeast Asia.
"We've always been on the cutting edge of different
countries of origin," says Blue Star's Harmell, who identifies
India as one of the up-and-coming countries for producing
blue-swimming crabs. Still, he says, "there's a lot of work to
be done to get the product quality up to snuff," noting in some
countries it is more difficult to impose the quality standards
required by U.S. importers.
For the domestic market, especially blue crabs from
Chesapeake Bay ( Callinectes sapidus ), stricter regulations
have meant reduced supplies. From a recent high of 118.3
million pounds in 1993, commercial blue crab harvests have
declined steadily. In 2007, harvests from Maryland and Virginia
produced 43.5 million pounds.
And the numbers for 2008 were likely to be even lower
because of a new sustainability framework instituted by the
governors of both states.
Based on the low number of spawning adult crabs and young
crabs in the 2007 population, and higher-than-expected removals
that year, emergency recreational and commercial harvest
regulations were imposed, reducing the female blue crab harvest
in Maryland for 2008 by 34 percent. In Virginia, changes were
instituted to allow undersized crabs to escape from crab pots,
while also increasing the size limit for peeler crabs.
Noreen Eberly, director of the aquaculture and seafood
program for the Maryland Department of Agriculture, says the
plans by Maryland and Virginia to decrease the 2008 harvest
were designed "to make sure stocks are healthy."
The limits, she says, didn't
negatively impact the supply
market of domestic crab, because larger crabs were
available from other states such as Louisiana, North Carolina
Even with a decreased harvest, prices remained similar to
2007, she says, with the season starting off with higher prices
and dropping through fall.
The catch limit for the 2009 season will be based on the
Department of Natural Resources' winter crab survey.
With 40 years of experience in the domestic blue crab
industry, Harvey Linton, president of Linton's Seafood in
Crisfield, Md., says each year brings new restrictions on the
catch, and higher prices.
However, with the recent limits imposed on catching
egg-laying females, Linton predicted the catch limits might be
increased in coming years.
Prices are seasonal, says Linton, with June, July and August
bringing highs of $125 to $135 per bushel and then dropping off
Because prices decline as the season continues, Eberly says
the Maryland Department of Agriculture has launched promotions
that focus on the affordability and availability of fall
Linton, who sells crabs and crabmeat online, through retail
stores and wholesale, has to pick his targets, such as high-end
restaurants and crab houses, because some local buyers have
turned to imported crabmeat.
"A lot of people are using imports because local isn't as
available as it once was," he explains, adding local suppliers
"are falling like flies this year because it costs so much to
operate this type of business."
While Linton says imported crab doesn't have the same flavor
as Maryland-caught crab, there are customers who don't know the
difference. "With so many importers, there's nothing you can do
to stop it now," he says.
At Chandler's Crabhouse in Seattle, Chef Kevin Rohr offers
East/West Crab Cakes made with Dungeness crab and jumbo lump
blue-swimming crab that is imported from Taiwan.
Karma Wick, marketing manager for Schwartz Brothers
Restaurants, which operates Chandler's, says Rohr also offers
softshell blue crab from Florida when it is in season. Although
the source of the blue crab in the crab cakes isn't mentioned
on the menu, Wick says servers do offer that information to
Phillips' Opitz says while there may have been some
competition for market share when imported blue crabs first
arrived in the United States, today imported and domestic blue
crab represents two different and distinct markets. The
pasteurized crab market, he says, is based on the convenience
and safety of the processed product. With domestic crab, he
says, "it's more of a flavor profile."
Find other SeaFood Business articles with blue crab here.
Contributing Editor Joanne Friedrick lives in South