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Opening of N.L. crab fishery will inject new money into provincial economy

Crab pots have been stacked on the wharf at the small boat basin in St. John's for the past several weeks , awaiting the start of this season's crab fishery. The fishery is due to open Monday. Glen Whiffen/The Telegram - Saltwire
Crab pots have been stacked on the wharf at the small boat basin in St. John's for the past several weeks , awaiting the start of this season's crab fishery. The fishery is due to open Monday. Glen Whiffen/The Telegram - Saltwire - Glen Whiffen

After nearly a month of delays prompted by COVID-19 fears and a wrangle over prices, crab fisherman from Newfoundland and Labrador are ready to put pots in the water.

The crab fishing season stats midnight, Monday, May 11, putting thousands of skippers and crew members back to work.

While there is still some angst — with fish harvesters seeking a federal aid package to help them through what they say is an extra challenging year — the start of this fishery is a relief for many, like the people who work on the processing lines at places like the Ocean Choice International (OCI) plant in Bonavista.

Barry Randell has worked at this production facility for over 40 years. He’s the local representative for the workers at the plant, who are members of the Fish Food and Allied Workers (FFAW).

He told SaltWire this week it’s been an extra anxious time for plant workers.

In addition to the worry of having no work if the crab fishery didn’t start, there was also concern over COVID-19 and the potential health risks of returning to a busy workplace with a potentially deadly virus still active.

According to Randell, the concern over COVID-19 is a little lower thanks to measures put in place by plant owners — from staggered lunch hours and breaks to plexiglass barriers to separate workers on the assembly line, and the provision of face shields — and the fact that the number of active coronavirus cases in this province is now very low. As of Thursday, there were just 14 active cases in the province.

“People are a little more comfortable with going back to work, with the cases being low,” he told SaltWire.

And for those who earn their livelihood on the plant floor in Bonavista, a busy crab season, followed by some caplin and turbot could mean up to 16 weeks, or more, of steady work and decent pay.

“A lot of people here make enough money to get top unemployment, which means they’re averaging about $1,000 a week at the plant,” said Randell.

It’s money that would be missed if the season didn’t open.

Randell, who is also member of the Bonavista town council, adds the spin-off from the crab fishery benefits not just plant workers but the local economy as a whole.

“This is a billion-dollar industry,” he said of the fishery, “and the impact of it is all over Newfoundland and Labrador.”

NEW MONEY FOR PROVINCIAL ECONOMY

COVID-19, however, has impacted the value of snow crab this year.

The main market for this shellfish is the United States, with about half of the Atlantic Canada catch ending up in restaurants, casinos and cruise ships. With those industries shut down, the only market left is the grocery store, where crab is often sold as a promotional sale item.

As a result, fishers in N.L. will get $2.90 a pound, a drop from last year’s average price of $5.14.

However, fishers are also getting a little more crab to catch. The Department of Fisheries and Oceans (DFO) increased the overall quota by 10 percent for the Newfoundland and Labrador region.

That means 64 million pounds of crab — with an overall worth (landed value) of $185 million — coming out of the water in this province this season.

In addition to providing direct income for fishers, the crab will power up 21 processing plants and provide employment for about 2500 to 3000 workers, says Derek Butler, executive director of the Association of Seafood Processors (ASP), the group that represents most of the processing companies in Newfoundland and Labrador.

Then there’s the spin-off effect for other industries, like trucking companies, fuel sales and supply services, which is roughly measured as a multiplier of 2.1 of the landed value, says Butler, adding up to about half a million dollars for businesses that provide sales and services to the crab fishing industry.

SETTING THE PRICE

The deciding voice on fish prices in this province is the Fish Price Setting Panel, after considering proposals by the FFAW and the ASP.

The FFAW had proposed a price range of $3.20 to $3.50 for crab.

The ASP proposed $3. That’s the price crab fishers in the Gulf region (Nova Scotia and New Brunswick) settled for in April. They started fishing over two weeks ago.

"The pandemic that we're dealing definitely brought a lot of uncertainty and unknowns,” FFAW president Keith Sullivan told SaltWire this week, just hours after the union membership decided they would start fishing.

“People are unsure about how the market will react, but that cannot give a panel the reason to put the prices lower. That is doing a disservice to harvesters.”

The drop in price will impact fishers in different ways, depending on the fishing licences and quotas they hold, Sullivan added.

For the inshore fleet, boats under 35 fleet fishing within 50 miles of shore, the quotas are much smaller, ranging anywhere from six thousand to 15,000 pounds. Larger longliners — in the midshore to offshore fleets fishing further offshore — have significantly larger quotas.

“But it’s incredibly varied, with 30 different fishing areas in the province,” said Sullivan. “Some (offshore) enterprises in 3L could have up to 200,000 pounds of crab to catch, while an inshore fisher could have only six to eight thousand pounds.

“It’s impacting everybody to different degrees.”

Butler allows that if COVID-19 was not a factor, the markets for crab for this season would have been probably very similar to last season.

Derek Butler
Derek Butler

“I think it would have been in that higher (price) band; the market was strong in the US with low unemployment, and the restaurant trade was good. So … yes we were looking to a good year.”

The reality for this year, though, is that the restaurant market is not there.

The only alternatives is grocery store sales, typically a lower-priced item than a restaurant menu item.

“This year it has to be consumed through retail (grocery stores). So that’s the market challenge. We have to hope we can sell substantially more volume through the retail sector.”

It its report on crab for the 2020 season, the price setting panel shed some light on the “exceptional difficulty” in coming to a decision on prices.

“These are unprecedented times resulting in much uncertainty in terms of the market outlook. There is considerable economic disruption in the U.S.A. and Japan from COVID-19.”

In addition to the arguments and rebuttals made by the FFAW and ASP in the price-setting process, the panel also considered recent reports from seafood market analysts Seafood Datasearch Marketing Consulting (Sackton) focused on the U.S. markets, and the Meros Report, focused on the market in Japan.

For the past couple of years about 30 percent of N.L. snow crab has gone to the Japanese market. The main market, however, is in the United States.

The Sackton Report, and weekly updates, noted the “foodservice and restaurant sales have collapsed … the biggest portion of the market — casinos, cruise ships, amusement parks, hotels and many restaurants — has ceased buying, full stop.

“The collapse of the foodservice sales has been nearly total — sales are down 70 to 90 per cent,” Sackton noted in its market report in April.

“More sales may emerge in the days/weeks ahead but the panel’s decision is required by Friday, May 1 … and the parties have been adamant that it can only consider information available at the time of the hearing,” the panel stated in its final report.

“A formula approach to dealing with the uncertainty would have been helpful. However, under the Final Offer Selection (process), the panel must choose one of the minimum price offers presented by the parties.

Keith Sullivan
Keith Sullivan

The decision from the fish price setting panel is here: https://www.gov.nl.ca/fishpanel/pricingdecisions/2020/Crab_Fishery_Decision_May_4.pdf

“The decision is quite challenging given the uncertainty and risk to both sides.”

Still, the panel noted the price set on May 1 may not be the final chapter in the saga that has been the start of crab fishing season 2020.

Both the ASP and the FFAW have the opportunity to seek a reconsideration from the price setting panel as more market information on crab is available.

Sullivan says the FFAW is prepared to go back to the panel to ask for a review, but he could not say exactly when that would happen.

The price setting panel noted in their report that a reconsideration request is likely and “(we) will be available to expeditiously deal with any that come forward.”

Meanwhile, the FFAW, along with other fishing groups in Atlantic Canada, have been pressing the federal government for an aid package to help sustain fishing enterprises and crews through this out-of-the-ordinary season impacted by a global pandemic.

barb.dean-simmons@thepacket.ca

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