COVID-19 on lobster industry’s radar
When the last commercial lobster season in southwestern Nova Scotia opened a year ago, a pandemic had not been on anyone’s radar starting out. But it sure was ending off.
Heading into this next new season, the pandemic remains on people’s minds, especially since when it comes to COVID19, nothing is certain.
“As we head into the fall, there is major concern of the second wave that is hitting the European Union and the United States very hard and I would expect will provide the same kind of uncertainty for dealers/processors and live shippers that we saw in the spring,” Geoff Irvine, executive director of the Lobster Council of Canada, said in outlining what the situation was like a month before the LFA (lobster fishing area) 33 and 34 seasons were set to open.
“The lack of stimulus programs in the U.S. and prediction that 25 per cent of independent restaurants will go out of business will also be factors that impact demand. However, other channels in live retail are showing promise to balance the market, albeit typically at lower prices.”
A bright spot in advance of the season was that for the past few months, Asia, and specifically China, had so far avoided a major second wave. But new COVID cases are being seen everywhere, including here at home in Canada.
THE SITUATION LAST SEASON
During the last lobster season, the industry saw live lobster exports to China drop significantly in January and February, when the coronavirus outbreak created a drop in market demand due to governmentimposed travel restrictions resulting in closed restaurants, hotels and retail markets. Some restaurants had to suspend indining eating and rely on takeout service instead.
Air cargo shipments to China and other overseas markets from Halifax were temporarily suspended.
Although China is an important and lucrative market, Irvine said the situation had a big takeaway.
“The key for long-term success is to continue to diversify our market both in terms of countries/regions and product types (processed and live) and to ensure that we continue to promote and build the Canadian lobster brand in every market.”
This past winter, COVID-19 created stress during the last LFA 34 and 33 season, which had started out promising with catches and the price paid to fishermen. The highest the shore price went during the 2019-20 season was around $10 a pound in January. While the price normally would have stayed at that level or climbed over the winter months, very soon thereafter it dropped and kept falling.
Irvine said COVID-19 had many impacts in Atlantic Canada. A chronic labour shortage in processing plants was made worse by the New Brunswick government’s ban on new foreign workers just as other seasons were opening in the spring. This affected the volume of lobster that could be processed.
“We were also uncertain of the market impact, with restaurants typically buying 75 per cent of lobster in all forms,” he said. “This was a major factor that impacted season changes in the gulf and Bay of Fundy and the courage of dealers to put away product to sell through the summer and fall.”
Throughout the past year, the lobster council and industry did modelling work to determine how markets in Asia, Europe and North America could rebound and take available processed and live lobster.
“Our predications of ‘stranded lobster’ were mostly much higher than what materialized for a number of reasons that we could not have predicted,” said Irvine.
These reasons included lower landings due to season changes; weather and effort; ongoing labour issues; much faster returning markets in Asia and North America and a far lower volume of lobster stored by dealers due to the uncertainty.
“Our modelling did help the sector and governments understand the challenges,” Irvine said.
“We also saw a major switch in all markets, but especially North America, from eating lobster in restaurants, which were not open or operating at 25 to 50 per cent capacity, to buying processed (tails and meat) and live lobster products at retail, e-commerce and home delivery,” he said.
More people dining at home because of the pandemic helped to drive demand for premium seafood. Whereas in normal times, crab and lobster were mostly consumed in restaurants, these two species saw a high sales growth during the pandemic.
“Clearly, people wanted a treat while they were stuck at home,” Irvine said.
Another driver of consumption in the U.S. and Canada was pandemic support programs that put cash in people’s pockets. A lack of programs going forward will be something to watch, Irvine said.
‘NOTHING IS NORMAL’
Since early February, the Lobster Council of Canada has had a standing COVID-19 working group that has held weekly or biweekly Zoom calls that reviews the ongoing impact of the pandemic and shares market reports and data with the industry. There has also been regular contact with Canadian trade commissioners in Asia and Europe. Updates help the industry with decisions surrounding harvesting, processing, live shipping and marketing/sales.
A big decision fishermen in LFAS 33 and 34 faced this past spring was whether it was worthwhile to continue fishing until the season closed on May 31. Facing the uncertainty of dropping prices coupled with high expenses, fishermen had to ask themselves, “Is it worth it to keep fishing?” Many decided it was not and hauled up their traps early.
“Nothing is normal,” Yarmouth County fishing captain Shawn Muise, who is also a director with the Brazil Rock 33 /34 Lobster Association, said at the time. He continued fishing until the end of the season, but noted others were too worried to take the risk.
“When COVID started and as the price started to drop, you could see it in the fishermen’s faces,” he said. “The drive was gone. This fleet didn’t haul like we normally do all spring. It’s not that we didn’t want to go. We didn’t know if we should go.”