Lobster fishermen in province contend with price collapse

"It's all gone to pieces in a big hurry," says lobster fisherman Laurence Cook of Seal Cove, Grand Manan. "It's an untenable situation with the price. It's very near production costs."

The lobster fishing season in southwestern New Brunswick opened on November 11, and the prices paid to fishermen have been in the range of $3.25 to $3.50 per pound (Canadian), which is over a $1 a pound less than the amount they were receiving last year and a $2 drop from the opening price two years ago.

"Fishermen are finding it very tight," agrees Stuart McKay, manager of Paturel International's operations on Deer Island, noting that the price of fuel and bait is up while the price for their catch is down. "There is a lot for pressure on the fishermen to work more profitably."

Cooks, who is chairman of the Lobster Sector of the Grand Manan Fishermen's Association, says lobster fishermen bring in an average of about 22,000 pounds during the season. When fishermen were getting $6 a pound, they were taking in $125,000 to $130,000 a boat. "You make your financial planning on that," says Cook. "When you cut that in half, but the fixed costs are the same, it's going to be a racket for people to pay for their boats and houses."

"People might survive this for this year, but if the trend continues, how many have enough saved up for a couple of years?" he asks. "This is an island. You're pretty well stuck. I have no idea what people will do."

He believes that fishermen will take their gear up early this year, noting, "There will be a lot less fishing in the winter." With fuel and bait costs up, he observes, "What used to be a decent day will be a money loser. So there will be a drop in production." On rough weather days, boats won't be going out to fish. Fishermen have seen fuel prices drop, though, from the level they were at earlier this year. Last spring the price was $1.22 a litre, and now it's at 78 cents a litre.

Another bright spot is that catches have been good. "It's been a healthy season on average," says McKay. Around Campobello, Grand Manan and Deer Island catches have been up, McKay believes, but along the mainland coast toward Saint John they have dropped.

Cook expects more lobster fishermen will go scallop fishing, but he points out that, because the lobster fishery has been very good for a number of years, quite a few fishermen were only fishing for lobsters. "Some bought boats they can't use for anything else," he says. Those who can use their boats for scallop dragging will have to buy new gear, and the cost is high.

One licensing change that the Department of Fisheries and Oceans has approved is to allow lobster fishermen to have two lobster licenses for the same vessel and to fish 1 1/2 times as many traps. Instead of a maximum of 375 traps, they are allowed to fish 563. "A few have done that," says Cook, but he notes that it costs about a quarter of a million dollars to buy the second license. "At $3.50 for lobsters, there's not much trading going on in licenses," he adds.

McKay notes that profit margins are tight for everyone, from the fishermen to the dealers. The drop in the exchange rate with the U.S. dollar "has been a big factor for us," he says. At present, the U.S. dollar is worth about $1.25 in Canadian funds. For much of this year the exchange rate was near par, but then this summer "it took a real dive."

Paturel International is employing about 90 to 100 workers at its plant in Northern Harbour, which is about a 30% decrease in the number of workers. McKay says, "We're doing all we do normally, but at a smaller scale." Demand for frozen product and air freight lobsters is off between 20% and 30%, as the global financial crisis is affecting sales. McKay notes, "People are not spending money, and we're really seeing that in our business."

Still, Cook wryly points to one other bright spot in the fishery. "This is a good thing if you're a lobster, because a lot more of them won't get caught."