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One Man's Opinion: Are high prices here to stay?

Property of SeaFood Business magazine
By Peter Redmayne
February 01, 2007

Ask a seafood buyer how business is these days and the first thing you'll probably hear is a groan and then maybe an expletive about how high prices are making fish harder and harder to sell.

Make no mistake - prices are high. Take Dungeness crab, for example. Two years ago, you could buy all the clusters you wanted for $3.55 a pound. This January, the price was $5.30 a pound and you were lucky to find a truckload. Or snow crab; early last spring, the Canadian sections were on the street at well under $3 a pound. Now the going price is north of $4 and supplies are tight and getting tighter.

On the finfish side, look at cod. Frozen H&G Alaska cod, which normally fluctuates between $1 and $1.25, is worth $2 a pound this winter - f.o.b. Dutch Harbor! That means retailers back East have to retail "fresh" cod fillets at $7.99 a pound - a price at which fillets don't exactly fly out of the case.

Halibut is even worse. When the Pacific halibut season wrapped up last November, fresh halibut prices were $6 a pound - and that's for whole fish! At that level, most of the fish was headed for white tablecloth restaurants that can charge $20 a plate and up.

There are plenty of other examples of increasingly pricy fish - tuna, sword, snapper, sole, flounder - take your pick. Even farm-raised staples like salmon and catfish have gotten more expensive. Over the past two years, the price of farmed Chilean salmon fillets has risen steadily from about $2.50 to more than $4 a pound. Meanwhile, catfish fillets have jumped from about $2.50 to $3 a pound.

So what's going on? Of course, seafood prices are notoriously volatile over the short term, due to wide fluctuations in supply. But over the long term, there's little doubt that buyers should not bet on much price relief. Blame it on supply and demand.

In the United States, where seafood consumption is at record levels, the aging Baby Boomer population is eating more seafood. According to consumer surveys, people in the 50-and-over demographic eat almost twice as much fish as people in the 18-to-34 bracket. In addition, many of the new immigrants come from countries with traditions of higher fish consumption. Add that to the fact that the American population is growing - well, you get the picture.

And then there's China, where, as the proverb says, "there is no dinner without fish." China's seafood consumption is at record levels and going nowhere but up, as the roaring economy improves living standards. China's annual seafood imports, which are growing almost 30 percent a year, are now more than $5 billion.

There are other factors, too. The weak U.S. dollar, for example, is forcing prices up as foreign buyers, strong currencies in hand, can pay more for fish.

Unfortunately, there's not a whole lot buyers can do about rising prices. One thing they can do, however, is take some risks. Although they may be increasingly few and far between, good buys will always come along from time to time. So the next time a seller suggests making a move on a good buy, it may be time to listen. Stocking up now could mean more profits later, because making a profit selling high-priced seafood is not going to get any easier.


Contributing Editor Peter Redmayne lives in Seattle


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