Two-thirds of the live lobster sold overseas by the U.S. last year ended up on plates in Asia, up 36 percent from the year before.
The growth in the $231.9 million Asian market is welcomed by the Maine lobster industry, which accounts for 83 percent of the U.S. haul. The increase helps offset Maine losses in Europe, which spent $40.3 million less on live U.S. lobster in 2017 than it had the year before, according to WISERTrade.org, a firm that tracks exports and international trade.
The main culprit? A Canadian trade deal that makes that country’s lobster cheaper for Europeans to buy.
The Asian gains of 2017 may have eased the pain of last year’s European losses for Maine’s $533.1 million lobster industry, but the shift affects individual lobster dealers differently. Not all dealers have invested equally in both markets, which means some companies that invested in opening up the Asian market have profited from the shift, while other more established dealers with a dominant European clientele have suffered.
CATCHING THE WAVE ON ASIA SALES
Tom Adams is one of the lucky ones. The 47-year-old lobster dealer founded Maine Coast, a wholesaler in York, in 2011. He had a few years to get his company up and running before the Asian lobster market took off. Maine Coast needed to build new markets to establish itself, he said. The timing of the Asia boom was just right.
In its first year, Maine Coast sold 1 million pounds of lobster, almost exclusively to domestic and European customers, Adams said. In 2012, the company doubled sales. It began to court some of the first Asian lobster buyers, whom Adams said were “kicking the tires” to see if this North American crustacean would appeal as a celebratory food for China’s growing middle class. That year, one out of every $5 earned by Maine Coast came from Asia.
In the five years since, Maine Coast hasn’t looked back.
In 2017, it shipped about 7 million pounds of live lobsters, with about 40 percent of it headed to Asia.
“The timing was just right for us,” Adams said. “As a young company, we had to take some risks. Not all of them panned out. We had to weed out who was who in these new markets. Not a lot of information was available. Who should we extend credit to? Even our credit insurer didn’t know a lot of these guys. Who could, and who would, take care of the lobster along the way, make sure it got to where it was going alive? We took a lot of risk, but for us, it paid off.”
Not counting exports to Canada, which is Maine’s trade partner and rival in a complex back-and-forth border exchange, U.S. and Maine exports of live lobster were up in 2017, said Jeff Bennett, a seafood trade specialist at the Maine International Trade Center in Portland. China led the way, with the U.S. exporting $128.7 million worth of live lobster there last year, Bennett said. That’s $44.3 million, or 53 percent, more than in 2016.
That is particularly impressive considering that America only cracked the $1 million mark for live lobster exports to China in 2010, Bennett said.
Overall, seafood was the state’s top export commodity in 2017 for the fifth straight year, driven largely by the sale of live lobsters.
DECLINING DEMAND ACROSS THE POND
Adams watches the European market closely. Canada’s Comprehensive Economic and Trade Agreement, or CETA, is definitely weakening demand for Maine lobsters in Europe, but it is also giving Asian buyers the leverage to negotiate lower prices on their U.S. lobster, he said. After all, Asian buyers know Maine must sell its lobsters somewhere, and if Europe is buying from Canada, then Asia can exploit the excess U.S. supply to drive down prices.
But Adams notes that European demand for U.S. live lobster had begun to soften even before CETA implementation. Other factors, such as Sweden’s proposal to deem American lobsters an invasive species and ban the import of live North American lobsters, and some countries deciding to ban the practice of boiling lobsters alive, claiming it is inhumane, also could have weakened the European appetite for our lobsters, Adams said.
Just as CETA is shaking up Maine’s European lobster market, Adams said the Asian market is not immune from wild fluctuations, whether they be driven by trade deals, political uncertainty or currency exchanges. In Asia, lobster is a popular celebratory meal – for example, lobster dealers see a spike in demand leading up to Friday, the Lunar New Year – but lobster is not Asia’s only option. Buyers there could decide to replace lobster with King Crab from Russia, he said.
And if Asia stops celebrating, demand there could quickly dry up, prompting dealers like him to always be on the lookout for the next emerging lobster market.
WORKING ON SHIPPING SURVIVAL RATES
Looking ahead, Adams warns that even a robust Asian market cannot absorb all the live Maine lobsters that were once sold to Europe – Asian customers prefer lobsters that are larger than the ones that Maine used to sell to Europe, and those lobsters once bound for Europe aren’t hardy enough to survive the long trip to Asia. Maine lobster dealers and scientists are trying to improve the shipping survival rate of Maine’s softer summer catch.
“The lobster we catch in Maine in the summer, with a little bit of firming up, they can ship to Europe, but getting them to mainland China, that’s a challenge,” Adams said.
On Thursday, Ready Seafood Co. of Portland was notified that it had received a $2.25 million grant from the Maine Technology Asset Fund to help build a facility to research and test ways to improve the hardiness of lobsters for shipping. The company already was collaborating with the University of Maine to see if it can speed up the shell-hardening process of recently molted lobsters. The grant will help offset the $6 million cost of the entire project.
Penelope Overton can be contacted at 791-6463 or at:
poverton@pressherald.com
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