Thursday, April 24, 2014
By Eric Russell firstname.lastname@example.org
Lobstermen up and down the Maine coast are keeping their lips sealed tighter than a lobster claw.
They can't talk about the historically high supply of their product. They can't talk about the historically low prices they are getting for their catch. They can't talk about whether they have agreed to keep their boats tied up until things improve -- because talking about it might imply that it's a concerted effort and a concerted effort would be a violation of federal anti-trust laws.
David Cousens of South Thomaston, president of the Maine Lobstermen's Association, often acts as a spokesman for the industry. He's usually chatty. Reached by telephone this week, Cousens said "No comment," before a question could even be asked. Then, he hung up.
Several other members of the lobstermen's association also declined to talk. Some indicated that they have been advised by an attorney to keep quiet.
The current problem can be explained by simple economics. A glut of lobsters -- soft-shell lobsters, to be precise -- has driven down the price that wholesalers are willing to pay lobstermen for their catch.
To help bring demand for their product back, lobstermen have stopped bringing new product to market. They are staying home.
"It just doesn't make sense to go out," said Tim Brunell, a lobsterman based in Pine Point and one of the few who agreed to talk.
Brunell said he's concerned less about the glut of lobsters and more about what he sees as price-gouging by dealers.
"I just can't see how there isn't some kind of price-fixing going on," he said. "We're hurting here."
Dealers, however, say they aren't going to pay more than the catch is worth and that the price is driven by the market, not a secret conspiracy.
The more lobstermen stay off the water, the quicker the prices will rebound, but lobstermen are notoriously independent, so Brunell is not sure if that will happen.
Maine Department of Marine Resources Commissioner Patrick Keliher released a statement recently warning against any criminal behavior during this unsettled time.
"We have heard that fishermen are seeking to impose a de facto shutdown of the fishery and coercing others into complying by threatening to cut off their gear," Keliher said in his release. "Any such actions will be met with targeted and swift enforcement."
The situation was similar in the mid-1950s, when lobstermen were targeted in a price-fixing investigation.
Maine Lobstermen's Association and its president were found guilty and given suspended fines for violating the Sherman Antitrust Act, which prohibits collusion in efforts to control market prices.
Some want the state to intervene so lobstermen aren't put in such a tenuous position.
In the long term, Keliher hopes to foster better dialogue among dealers and harvesters and also do a better job marketing Maine lobsters to the world, he said. The state's Lobster Advisory Council has been meeting regularly to talk about ways to increase demand, but nothing has been decided.
In the short term, Keliher said, there's nothing Marine Resources can do.
"My authority is to conserve the resource, not to impact markets," he said.
FEWER BOATS GOING OUT
Harbor watchers up and down the coast have reported fewer lobster boats going out in the past several days.
But if there is a shutdown, it's a quiet shutdown.
"We gotta be quiet," said Willis Spear, a lobsterman from Yarmouth. "The government is looking for scapegoats. This is definitely serious."
Lobsterman Scott Jordan posted this message recently on the Maine Lobstermen's Association Facebook page: "Instead of shoving our product down the throat of consumers, we need an effective trap limit that will decrease supply, increase price, decrease demand for the bait resource, increase trap yield and consequently productivity, conserve both the lobster and bait resource, and pacify whale-huggers by putting whales less at risk for entanglement."
There's nothing illegal about lobstermen tying up their boats. They are under no obligation to fish five days a week. It would be illegal only if they all conspired to stay off the water or to set a market price. That last happened in the 1950s and led to a consent decree, still in effect, in which lobstermen agreed not to discuss or participate in efforts to control prices.
In a competitive environment and a relatively short catching season, some cannot afford to stay ashore.
Brunell said he doesn't understand why the state cannot step in and impose a moratorium. Other fishing industries are regulated both in Maine and other coastal states. But the Maine lobster industry, which accounts for 80 percent of all domestic lobsters, has always had a Wild-West quality, with fishing territories determined by the lobstermen, in many cases passed down from generation to generation.
Could more regulation be coming?
"In these difficult economic times, we are obviously very concerned for lobstermen in the state. This season's experience only underscores the need for the state of Maine to take a hard look at how lobsters harvested in Maine move from the dock to consumers," Patrice McCarron, executive director of the lobstermen's association, said in a statement late Thursday.
'A PERFECT STORM'
The lobster glut didn't sneak up on anyone. In 1987, less than 20 million pounds of lobster were hauled. That number has generally increased ever since. In 2011, a record 104 million pounds of lobster were pulled in.
Low prices didn't arrive overnight, either. Although prices paid to fishermen peaked in value at $4.63 per pound in 2005, that has dropped considerably. Three years ago, lobstermen bemoaned the low price they were getting for their catch -- less than $3 per pound. Now, it's less than $2 per pound in some cases, but that could rise if supplies decline or more valuable hard-shells come onto the market.
This year's catch is all about timing, said Robin Alden, a fisheries expert and former Marine Resources commissioner.
"I've never seen it like this before," she said. "It's a perfect storm."
Lobsters can only be caught once. The glut of soft-shells in Maine waters came much earlier than normal, driven here largely by environmental factors, such as warmer ocean water. Those soft-shells could turn into hard-shell lobsters by later this season, and if the crustaceans are harvested then, they will be more valuable to harvesters. So, there is an incentive to stay off the water.
Still, about 70 percent of all lobsters caught off Maine are soft-shell. They typically have less meat per pound, but the meat is tender and easier to get at. Only 15 percent of caught lobsters end up in boiling water and then on consumers' plates. The rest is processed, usually in Canada. But Canada has had its own historically high harvest. They don't need any more product.
'RIDE IT OUT'
Spear, the Yarmouth lobsterman, said he's discouraged to see a once highly sought-after commodity like lobster become "nearly worthless." Many lobstermen, like Brunell, blame buyers and retailers.
Lee Kressbach, who runs Maine Lobster Direct and buys regularly from lobstermen, said many have been angry with him for not paying a higher price. Kressbach said his reply has been simple: "Bring me better lobsters."
Alden said there has been years of mistrust between lobstermen and dealers, but dealers have the upper hand. Lobstermen have a perishable product that they need to sell. Their bargaining position is weak.
Dealers have problems, too, though. There is a lot of shrinkage, or waste, especially with soft-shell lobsters, something Kressbach can attest to. He needs to buy from lobstermen to keep them happy but can't control the low quality of the catch. He said his business is breaking even at the moment, not swimming in profits.
Kressbach also said he doesn't understand the woe-is-me mentality of lobstermen. Lobster fishing is cyclical. Things will turn around, he said, if not this year, then next. Those who fish know this.
"You can't call it a strike, but this conservation effort is ultimately good for the industry," Kressbach said.
Perhaps as soon as next week, experts predict, processors will start buying more. Soft-shell lobsters will have hardened a bit. Boats will flood the waters again. The catch prices likely will rise.
"While our association has no role in the marketplace, we want to make clear that this is an anomaly in a generally robust market," said McCarron, of the lobstermen's association.
Pete McAleney of Portland-based New Meadows Lobster, one of the state's largest distributors, said he hopes the high supply-low demand dynamic is short-lived.
"We'll ride it out and see what happens," he said.
Some lobstermen are in a better position to ride it out than others.
For years, Maine lobstermen have believed that their expenses were growing at an unsustainable rate. Fuel costs went up and have stayed up. Then they were required to buy new trap lines that are less likely to ensnare whales. In some cases, lobstermen invested their surplus earnings from five or six years ago into bigger boats or houses or cars. When earnings started to drop in 2008, it became harder to pay those bills.
Brunell said the frustrating part is that buyers and end retailers, such as restaurants, are still making out because they can still mark up lobsters to tourists who think anything less than $20 a pound is a good price. Steve DiMillo of DiMillo's Floating Restaurant said he sets lobster prices at the beginning of each season and doesn't change them. This year, he's doing pretty well.
"A lot of people are benefitting from these prices, but I guess if anyone's losing, it's the lobstermen," he said.
Marine Resources Commissioner Keliher said his advice to consumers is to eat while the prices are low. Many have taken advantage. Local restaurants and lobster retailers are reporting more sales of lobsters this season as prices have dropped. Roger Reed, who leases space on Commercial Street in Portland to sell lobster direct, said business has been strong all year.
Nonetheless, the economy hasn't rebounded, Kressbach cautioned, and no matter how it's marketed, lobster is still thought of as a luxury.
Staff Writer Eric Russell can be contacted at 791-6344 or at:
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William Ray holds a pair of soft-shell lobsters at Free Range Fish & Lobster market in Portland last week.
John Patriquin/Staff Photographer
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A billboard shows how inexpensive lobsters are at Free Range. On average, lobstermen are getting $3.19 a pound. Soft-shell lobsters came much earlier than normal this year, driven largely by environmental factors, officials said.
John Patriquin/Staff Photographer