Maine lobstermen are struggling to stay afloat as lobster prices have hit record lows. (Photo: Anderson)

Global crisis exacts toll on Maine lobster

UNITED STATES
Thursday, October 16, 2008, 17:00 (GMT + 9)

The global economic crisis is wreaking havoc with the Maine lobster industry, causing record low prices and prompting the Maine Lobster Promotion Council to launch a campaign encouraging local consumption of the local crustacean.

Consumer demand for lobster is down even though an oversupply is causing prices to drop to record lows, AP reports. As a result, lobstermen have been selling their catch for as low as USD 2.25 per pound, almost half as much as last year's USD 4 per pound.

The Council hopes its campaign will counteract the effects of a flagging economy in which people spurn luxury food options.

"It's as bad as it's ever been. It's unprecedented. Guys are not making the money they need to make to get through the winter,” said Bob Baines, chair of the Lobster Advisory Council.

Low demand is compounded by the troubles faced by Canadian processors, who buy around 70 per cent of Maine's lobster harvest.

Many Canadian processors are funded by Icelandic banks and had to shut down operations after the recent economic meltdown in that country.

Meanwhile, fuel and bait prices are climbing higher, MaineToday.com reports.

As the situation stands now, the lobster industry stands to lose USD 20 million this year, said Baines.

The Maine Lobster Promotion Council reached an agreement with local retailers Hannaford and Shaw to lower lobster prices in order to stimulate demand. The council is trying to reach a similar agreement with Wal-Mart.

Industry players were scheduled to meet Wednesday to discuss other possible solutions to the industry's troubles.

"We're going to be looking to some of our financial institutions to help maybe restructure some loans, to understand this is an acute crisis right now, and we have a lot of solid businesses at risk,” said Patrice McCarron from the Maine Lobstermen's Association.

Meanwhile, local communities are helping out. The Penobscot East Resource Center in Stonington threw a community lobster bake to benefit the east Maine lobster fleet.

The bake sold lobster for USD 3.50 each to thousands of people who attended.

"People are still thinking of lobster as a luxury item, but when it's cheaper than steak it's not. Right now it's cheaper than hamburger," said Annie Tselikis of the Center.

Food retailer Hannaford will offer unusually low prices for lobster, said spokesman Michael Norton.

“We're trying to do our part here," he said. "Now that the supply is cheap enough, you can bring (the price) down and hopefully that will help keep the product moving."

Many predict that these problems will not be over soon.

"I think we are going to be facing these issues throughout 2009,"  said Lobster Council Executive Director Dane Somers. "We will be challenged to come up with innovative ways to open up new markets and develop the markets we already have. It's going to be a year where everyone is going to work harder than ever.”

Related articles:

- Seafood firms vulnerable to Iceland's pain
- Eco certification likely for Maine lobster, says report

By E. Fiske
editorial@fis.com
www.fis.com

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