A new low for lobster

[Robbien]

Source: AP

PORTLAND, MAINE — The price of Maine lobster, which accounts for 80 percent of the U.S. catch, is tanking. The primary factor, a drop-off in demand by penny-pinching diners, has been in place since summer.

But a secondary problem recently surfaced: the global banking crisis left Canadian processors short on credit, trapping Maine lobstermen and dealers with too much supply.

. . .

The recent crisis in the global financial system resulted in lines of credit being cut off to several lobster processors, including some in Canada who have relied on Icelandic banks that have failed, according to John Norton, president and chief executive of Cozy Harbor Seafood Inc., a seafood processor in Portland.

More than half of Maine's lobster harvest is typically shipped to Canadian processors. But this year is hardly typical. Even before the credit crisis intensified, lobster purchases by chain restaurants, cruise lines and other businesses were way below normal this year as consumers reined in spending.

. . .

Along the Portland waterfront, seafood shops are selling lobsters for as cheap as $3.89 a pound, which is about the price of bologna at the deli counter.

Read more: http://www.app.com/article/20081115/BUSINESS/811150317/1003

[123infinity]

1. A damn shame they won't keep...

;-)

[glowing]

2. You know, they used to serve lobster as prison food.. Now, its a luxury item..

Seems that the supply/ demand market has caused the lobster prices to drop.

I keep wondering when will be the time that I can walk into a stor and see a blouse and say, I like that blouse, but I'm not paying $40.00 for it.. I'll pay you $15.00. The mark up on clothes is quite high, they'd still make money off the $15.00.

[bertman]

21. Glowing, I'm not so sure they'd still make money on the $15 sale. There are high overhead

costs associated with retail. Rent, utilities, wages/salaries for workers, advertising are not cheap. Plus the competition is stiff.

Usually the really low-price bargains you see are to get rid of inventory or to be loss-leaders to induce folks to come in and shop.

If I'm off base on this, please educate me.

[glowing]

30. It will come down to it, or they will no longer be stores... If its too low, they say no.

I work in hospitatlity.. beleive me, you can bargain your way into a cheap price, especially now.

[Fumesucker]

35. Try it, you might be surprised at how many stores will negotiate price.

I know I've been surprised at some of the deals my wife has managed to squeeze out of some stores. She has been in retail management for many years and knows what to say and who to say it to.

It's even worked for me before a few times.

[Historic NY]

3. Yeah..cold cuts, chicken & beef have skyrocketed.

[Maine-ah]

4. their not getting much for it off the boat.

last lobsterman I talked to was getting 2.15 lb for it. This isn't even covering costs of operation.

[Robbien]

11. The article mentions that fishermen are lucky if they can get anyone to

take the lobsters off their hands. The brokers who buy the lobsters from the lobstermen do so on bank letters of credit, which are almost impossible to get these days. Even if the brokers manage to obtain a LOC to buy the lobsters, refineries may not be able to obtain one to buy the lobsters from the brokers.

Everything along the whole lobster line is being bottlenecked at the lobster docks.

[Maine-ah]

14. they're pretty much fugged at the moment.

these guys have been living rather well for years, buying up brand new homes, cars, equipment ect...it could be a major impact on our local economy.

[Trajan]

20. Arent there cash operators anymore ?

Somewhere SOMEONE has money ... under the mattress or in a sock ...

It seems somebody could make a BUNDLE, if they had a little cash on hand to intermediate ...

[last1standing]

22. The result of the bush* tax cuts for the ultra wealthy caused this.

Basically, 1% of the U.S. population has been literally awash with cash due to the bush* tax cuts that put the onus of taxation on the middle and lower classes. These ultra wealthy needed to invest their money but found they could make much larger profits by investing in countries with slave wages and no OSHA guidelines. This is why India is one of the few places on Earth that gives bush* a positive approval rating.

Because of this, there is little cash actually left in this country compared with previous administrations. Besides, even with an economic downturn, you're still going to make more money if you can pay someone $0.25/hour instead of $10.00/hour. Even after shipping costs it's a massive difference, so the money's not coming back unless our government changes the rules that allow it to be shipped overseas.

[Gormy Cuss]

44. The lobstermen that I know have buyers, but the price is too low.

They're running without stern men and hauling fewer traps because as maine-ah wrote, they can't afford to run the boats. The drop in fuel prices has helped but it was a pretty sad state a couple of months ago.

[Bette Noir]

27. I'm pretty sure the retail price is the same.

Just in case, I might wander over to my favorite fish market...

[MaineDem]

28. It's even cheap at the grocery stores here

If they have to be shipped I'm sure the cost is added on.

[Saturday]

5. I heard about the low price of lobster and checked it out...

at my local Costco. It was around $20.00 a lb. Don't know where it's cheap.

[ohio2007]

7. thats bc the story is BS. What is cheap is pacific rim shrimp ,tainted with industrial byproducts

thats sold at the big box stores

[NWHarkness]

17. It's not BS

I live in midcoast Maine, and I'm telling you, these guys are selling lobsters out of the back of pickup trucks for as low as $4 each. Not $4 a pound, $4 for a pound and a half lobster. People around here are buying them in bulk to keep the local lobstermen from going under. I've got 6 in the frige right now.

[jpak]

19. Ayuh - and I've had lobster 3 times this month

It's that cheap

[MaineDem]

29. I've never had it so often

It's good to live in Maine. :) (For so many reasons.)

[Maine-ah]

8. where do you live?

it costs money to ship it out of state and the further away you are the more money it costs. If I want a product that is produced in California, it's going to cost me more here than if I lived in California.

[petronius]

13. I would suspect that the only major price-flexibility is at the dock

The processors can estimate the demand in places like CA and will ship enough to meet that demand and keep the price nice and high. If that means they need to buy less at the dock, then they can force a lower price from the lobstermen. The processors take a bit of a hit as the demand drops, but the fishermen (and laid off proccessor workers) take the real screwing...

I think this still applies, even if the lack of credit is as important as the falling demand.

[Cronus Protagonist]

9. Same price on QVC last night

10 pounds of lobster, cost about $200. I don't eat anything with an exoskeleton, so I don't care much, but it seems to me that the poor things would be better off left in the water.

[Robbien]

16. That is because the lobster caught in Maine is then trucked up to Canada

to be processed then transported back down to the States.

Add in all the labor and financing costs and you've got yourself a $20/lb lobster.

With most all the lobster being stuck in Maine right now unprocessed, I expect that $20/lb lobster is going to increase in price fast.

[Politicalboi]

25. I argee with you on that

[ohio2007]

6. But the price of live lobsters remain high in midwest grocery store. Guess when the transportation

costs fall because of the price of crude,
the savings will be passed on to consumers. ;)

[asjr]

10. Checkout counters should start keeping

smelling salts at the register for people like me that faint when the total comes up on the register.

[Gman2]

15. I live in a ritzy area. I eat the bargain counter stuff. I am afraid that

even the housewives that used to turn their noses up at a speck on produce, might start to eye the bargains, and I wont be able to afford to eat. If it is on sale, and they mark it down 30 or 50 %, it goes a LONG way.

[Tandalayo_Scheisskopf]

12. Across the panopoly of commodity-traded items...

The price to consumers is being propped up unnaturally, as opposed to the drop in prices on the markets. This is something that has to be addressed by the new administration. There are too many disconnects between consumer prices and market prices.

[Robbien]

18. I expect much of the price add on is due to financing costs

No one is doing anything with cash these days. Everything is done on credit and banks are making out like bandits.

There was another article the other day which said shipping carriers were being drydocked because there wasn't enough available lines of credit to enable customers to rent the carriers.

This article says the lobster broker buys the lobsters from the fishermen using lines of credit. Then the processing plant uses credit to buy the lobster from the broker. If the transporters are also using credit to ship the lobster up to Canada and then again down to the states, each lobster in our stores has a huge pile of financing fees attached to it.

[yy4me]

23. My daughter's BF is a local lobsterman. He works unholy

hours (up at 3AM), fuel costs for his boat are astronomical, never mind things like insurance, cost of equipment, bait for traps, pay for his ships mate, a myriad of other things.

This is his living and yes, it is around $2.00 to $2.50 a pound at the docks. It is not going down in the restaurants, someone is making money but it is not the guy who is spending 10 hours a day on the water, trying to make a living.

[Bette Noir]

31. This is the Holy Grail.

For all that Americans, to a man, describe themselves as "middle class," the essence of middle class-ness is being self-employed. Allowing the price of seafood to tank is another part of the assault on the American middle class. There aren't many self-employed folks left in this country, lobstermen being among the last.

Main Street used to be lined with mom-and-pop hardware stores, grocery stores, coffee shops. Then it was chains, then bigger chains, and all the Moms and Pops work for minimum wage at Wal-Mart.

The very rich won't be satisfied as long as there is one American who works for himself.

[happygoluckytoyou]

24. SARAH PALIN has a case of crabs she will share with you for half that amount

[ConcernedCanuk]

41. Your comment disgusts me - REALLY disgusts me

.
.
.

[Historic NY]

43. Are they "King" crabs?

[Davis_X_Machina]

26. Local radio is running PSA's

pretty much non-stop asking us to eat more, here, locally, where it's landed.

The Million Lobster March spot is pretty funny.

[investintrains]

32. Whole Foods ended the sale of live lobsters everywhere but in Maine.

Whole Foods ended the sale of live lobsters everywhere but in Maine.
http://www.lobsterlib.com
Lobster and other shellfish are nonkosher because of anaphylactic
shock, colon bacteria, salmonella, mercury, arsenic,
pcb's, pbb's, etc

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[Devil_Fish]

34. "a new low for lobster" What did they vote for McCain?

seriously, if they are over stocked, how about put them back in the ocean where they belong?

[Omaha Steve]

36. I only eat lobster bites at Long John Silvers

Marta & I have not eaten at Red Lobster in 2 & 1/2 years. We are boycotting them for their use of CANADIAN seafood to help stop the harp seal hunt. We used to eat there at least once a month. Maybe now Red Lobster will pay attention.

http://www.seashepherd.org/news-and-media/news-050711-2.html

Products to boycott:

-- Snow crabs from Newfoundland and Nova Scotia
-- Mussels, sardines, lobster and scallops from Prince Edward Island and New - Brunswick Salmon both wild and farmed from British Columbia

[MaineDem]

37. I have never been to a Red Lobster

There are none in Maine. Go figure. :)

[2Design]

38. listed on red lobster menu steak and lobster - $32 - for a meal??

I can't see spending that on a meal - that is a pair of shoes at kmart

[Davis_X_Machina]

42. Restaurant rule of thumb -- food cost x 3 = menu cost n/t

[orleans]

45. grocery store today--two lobster tails for about $33 (8 oz i guess) n/t

[armed_and_liberal]

39. I hate to hear them scream when you put them in the pot!

The US and Canada both have been spending $millions$ to save the lobster from overfishing for years. Looks like a recession is the only thing that will allow the fishery to recover

[Rosa Luxemburg]

40. I feel sorry for lobsters in the grocery store

when I see them in the tank I want to let them out back into the ocean. Sniff.

[HamdenRice]

46. Another factor they didn't mention -- an ecological success story

Maybe 10-20 years ago the lobstermen organized an extremely efficient means of protecting lobster habitat and limiting harvests. There are more lobsters available to catch than there have been in decades. A few years ago, there was talk of a lobster glut as a result of the ecological success and over supply.

Sadly, the price at the boat and the price in the store are vastly different, with middle men taking most of the profit.

[modrepub]

47. Lobster Boom/Bust

This happened about ten years ago but for different reasons. Was in ME visiting my sister and lobster was going for $2.50/lb; wife and I bough a lobster dinner (1 lb lobster, roll, cob of corn, half dozen steamers and all the soda we could drink for $6.99). It killed the commercial guys/gals and many went under or found something else to do. Ran into one in Bar Harbor who was doing the Lobster Boat Tours on the wharf to make a living. He said he was going batty doing 3-4 tours a day. Told him my nieces and nephews loved the whole experience and he was doing a service to these kids who got a kick out of seeing what was in the traps. He didn't seem to agree, probably would have rather been out there on his own rather than interacting with a bunch of tourists; typical Mainer I guess.

Have read lobsters were once so plentiful you could take a rake and go down to the shore and "rake" up a meal in a few minutes. Lobsters were prison and servant food at the turn of the 19th and early 20th century; ME was vacation land for the uber rich Rockerfellers, Vanderbilts and other NE "royalty" who wanted to escape the summer heat. Prisoners and servants would riot to limit the number of times a week they had to eat them. Keep in mind the waters of ME were once filled with cod (typically 6 ft or larger). Overfishing for cod, lobster and sea urchin have depleted these stocks to the point of near extinction. As with most systems, once this happens these creatures will never come back in their original numbers; the system will find another equilibrium point with other organism distributions.