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EDITORIAL: The market always wins

Published on August 23, 2017

Ricky Aylward, left and Brian McInnis help load Lee Doyle's lobster boat at Miminegash harbour in this Journal Pioneer file photo.

©Photos by Eric McCarthy/Journal Pioneer

Prince Edward Island’s fall lobster fishermen were cautiously optimistic two weeks ago – hoping for a shore price close to the robust numbers paid this spring to their north shore brethren.  

Or at least something approaching strong prices paid a year ago. Those hopes have been dashed.
It’s understandable that fishermen are bitterly disappointed when early indications suggest the shore price is at least $2 a lb. less than last year or this spring.
They sailed from western ports August 9 full of optimism for a repeat season to mirror 2016. Catches were up 15 to 20 per cent last fall over the year before. Prices were up by about 20 per cent.
The first signs of trouble this fall came bubbling to the surface last week when some New Brunswick fishermen decided to tie up their boats to protest low prices. Concern quickly followed across the strait when the P.E.I. Fishermen’s Association (PEIFA) expressed its disappointment.
Low prices are bad enough, but when coupled with weak landings, it’s a deadly combination. Fishermen were already nervous about the impact from an increase in carapace size from 73 mm to 75 mm this season. That increase appears to be having a negative effect on landings.
Lower landings should justify higher prices. It makes market sense. Instead, the association says it is hearing prices of $4 - $4.25 for canner lobster and $4.50 - $4.75 for market lobsters. If those reports are true, it is a significant decrease from last year.
There is a general rule of thumb for the fall season: If fishermen don't have strong landings in the first 10 days, it will be impossible to make up those losses the rest of the way.
Processors argue that they are paying what the market can bear. Markets are fragile and processors are nervous. The market has already dropped 10 to 15 per cent on meat and tails. Prices might drop even further.
The strengthening Canadian dollar is cited as the main culprit. The loonie is trading a fraction under 80 cents U.S. this week, up from the low 70s earlier this year, making Canadian exports more expensive. Still, the slightly higher loonie shouldn’t account for such a dramatic drop in price.
There seems to be a weaker demand – at least right now – for fall lobster in China and Japan, leaving fishermen frustrated that a marketing levy isn’t producing the desired results.
A recurring problem - both spring and fall - is the lack of information between processors and fishermen. There is still no minimum floor price established and fishermen set sail without any commitments, left to twist in the wind at the market’s whims.
The annual mystery on opening shore prices should be a thing of the past in this age of immediate access to market information such as data on exports, currency rates, inventory levels, store sales and consumer trends.
In the end, the market sets the price. And the market wins every time.