Wednesday, June 24, 2009

Lobstermen find new ways to sell their catch


I just wrote an article about this for the Examiner.
This is from the Portland Press Herald (June 21):

Lobstermen take on new role: Salesman

By JOHN RICHARDSON

PORTLAND — It's Friday afternoon, and Chris Andrews has just returned from a 15-hour trip offshore to haul lobster traps.

Instead of catching up on his sleep, Andrews passes time in the parking lot of a Citgo gas station on Forest Avenue, next to a large sign with the words "Local Lobster" hand-painted across the top. Dozens of fresh, live lobsters rest on ice in the back of his truck, ready to go home with anyone willing to pay $5 each, or at least do a good job haggling.

"I'd rather be out hauling traps than doing this," Andrews said of his new part-time job as a seafood salesman. "This year, I have to do it."

Hawking lobsters is a job most Maine lobstermen have been happy to leave to other people. But the global collapse of lobster prices, together with high bait and fuel costs, has capsized the economics of Maine's signature coastal industry.

Now, Andrews is one of a growing number of lobstermen selling their own catches, bypassing dealers and fish markets. Even getting one dollar more per pound – $5 instead of $4 – may be enough to protect their livelihoods this summer, they say.

"A lot of people are trying to position their businesses to survive right now," said George Lapointe, commissioner of the Department of Marine Resources.

The roadside competition is clearly good for cost-conscious consumers, and for those who want to get their food directly from the guys who pulled it out of the ocean.

But the trend has inflamed old tensions between lobster catchers and lobster dealers at the same time the future of the industry may hinge on their ability to cooperate. Some dealers have tried to put a stop to the pickup-truck sales, warning that the practice is unfair and may drive prices down even further.

"They're putting themselves in a hole by doing this," said Robert Bushey, a lobster dealer in Milbridge.

CATCH RISES BUT SALES FALL

Lobster prices collapsed last fall, a casualty of the global financial meltdown.

While people around the world stopped ordering expensive lobster dinners, Canadian seafood processors – buyers of about 70 percent of Maine's annual catch – couldn't get the loans they needed and stopped buying Maine lobsters.

Wholesale prices paid to lobstermen, known as boat prices, plunged to as little as $2.25 per pound in some parts of the coast, the lowest in more than a decade. While Maine lobstermen last year caught 3 million pounds more lobster than the year before, their sales fell by nearly $50 million to $235.6 million, making for a lean winter in many households and coastal communities.

Boat prices this spring have hovered between $3.50 and $4, close to what some lobstermen need to cover their primary costs: fuel, bait, labor and boat payments that can total thousands of dollars a month. Prices rose as much as a dollar in the past week but are expected to settle back down after Father's Day and the Fourth of July.

Many fear boat prices could tank to between $2 and $3 a pound by the end of summer when lobster catches peak and the tourists go home.

"A lot of these guys simply aren't able to earn enough out there to warrant going out," said Jim Acheson, a University of Maine anthropology professor and expert on the lobster industry. "I haven't ever seen the situation anywhere near as bad as this."

'WE JUST WANT A FAIR PRICE'

The traditional way for a lobsterman to sell his catch is to accept whatever price is set by his usual dealer, often the same person who owns the wharf and supplies the bait. A typical dealer then supplies restaurants, seafood markets and other customers in Maine and around the world.

Despite the perennial – and unproven – complaints about price fixing by dealers, the arrangement typically works well for both. Now that there is less money to go around, however, that relationship is breaking down in some cases.

Andrews, a 35-year-old lobsterman, said fishermen are like family farmers. "Farmers always get the short end of the stick, but that's why you see farm markets," he said. "We don't want to do this stuff. We just want a fair price."

Andrews and fellow lobsterman Mike Davis have been selling their lobsters for $5 or $6 apiece Friday evenings and Saturdays at the gas station.

Another group of lobstermen has been selling their catches on weekends out of pickups parked alongside West Commercial Street in Portland.

Some lobstermen have hung "lobsters for sale" signs outside their homes for the first time. And a few are even advertising their lobsters on the Internet at prices ranging from $3.50 to $5.25 per pound.

Brent Nappi of Falmouth is putting an addition on his barn and installing a large tank to store and display his lobsters. He's now pre-selling lobsters that he'll trap later this summer, a marketing strategy based on community-supported agriculture programs for fresh produce.

Customers are paying $125 ahead of time for 25 or 30 pounds of lobster – $4 to $5 per pound. Those who buy shares in the Linda Kate Lobster Co-op can pick up the lobsters whenever they want them during a two-month period, and Nappi will even take customers aboard his boat and teach them about lobstering, he said.

Nappi hopes being creative will allow him and his helper to stay in the business even if boat prices fall below $3.

"It costs $2.50 to $3 just to tend a trap," he said. "Within the next 12 to 24 months, probably 10 percent of the fleet's going to go out of business."

The industry will be in for an even bigger fall if more lobstermen start selling on their own at wholesale prices, according to some dealers.

DEALERS FORESEE FATAL SPIRAL

Thirteen Maine lobster dealers and retailers wrote a letter last month to state officials, urging them to put a halt to the practice and require that catches be sold only to licensed lobster dealers.

"Retailers have far too much overhead to be able to sell at the same price that the roadside fishermen set," it says. The only way they can compete "and stay in business is to pay less for lobsters."

And that would lead to a deadly spiral, said Bushey, the lobster dealer in Milbridge.

Four lobstermen who used to sell their catches to Bushey now sell directly to consumers, he said. Some of them recently started selling through a local supermarket for $3.75 per pound, the same price Bushey was offering them at the dock.

"These lobster fishermen who are becoming dealers, if they try to take over a market, the only way they can do it is to cut the price, and it's just going to go into a spiral," he said. "Have them run a load to Boston and wait 60 days for their money and take a hit for all the dead lobsters in the crate. It's not all fun and profit."

In Portland, Ben Lindner has the same concerns.

His fish market, the Fishermen's Net, is less than a mile up Forest Avenue from the Citgo station where Andrews and Davis sell their lobsters.

"They (sell) at peak times and low-ball. It's not helping the other people around here," Lindner said.

It is the dealers and retailers – with their expensive tanks, full-time year-round employees and advertising budgets – who build and supply the markets that keep lobstermen employed, according to Lindner and others.

"I think a lot of them don't realize that. Yeah, they got expenses, but everybody else does, too," Lindner said.

State officials have stayed out of the dispute, saying they have no authority to tell lobstermen how to sell their catches. They also have no authority to tell dealers to increase boat prices, as some lobstermen have demanded, they said.

The only apparent effect of the letter, in fact, was to stoke the anger of lobstermen, who saw it as more proof that dealers have always conspired against them.

Dealers do have a legitimate point about the risk of driving prices down even further, said Andrews. "That would hurt everybody, we know that," he said.

Andrews and Davis said that's why their prices are closer to those at local fish markets than to the boat prices offered by dealers.

When the Fishermen's Net was selling lobsters for $4.99 per pound, for example, Andrews and Davis sold 1-pound lobsters for $5 apiece.

"We used to have pretty good relations with the dealers," Andrews said.

"I still want to," Davis replied. "I have two little kids and I'm going to do what I have to do."

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