Evidence of meeting #78 for Fisheries and Oceans in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was product.
A recording is available from Parliament.
11:30 a.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Right.
Why is it they were getting such a low price—$2.68—when Canadians were getting over $4?
11:30 a.m.
Executive Director, Lobster Council of Canada
Well, the Canadians who fished during the time that Maine was at its peak didn't get $4. They got much less.
11:30 a.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Has that collapse spread? You mentioned that Maine precipitated it, but what's the current state of it?
11:30 a.m.
Executive Director, Lobster Council of Canada
Well, you need to look at sort of a 12-month window. I'll explain that if you like—
11:30 a.m.
Executive Director, Lobster Council of Canada
—because it's extremely important.
This whole situation today started about 12 months ago. Last spring, everyone was worried about the prices paid to harvesters being too high. Harvesters weren't; they loved it. The sellers, processors, the shippers, realized late in June that they had paid too much last spring, because they saw the influx of the Maine product.
At the Boston Seafood Show last year, in March, there was already chatter about the Maine product coming early. By the end of June, when all the spring seasons were finished and all the processors had bought all the Canadian lobster, the Maine product hit much earlier than ever, and at very low prices because the landings were so high in Maine.
That meant that the LFA 25 season, which starts in the middle of August, was opening in a collapsing market. All the processors that put up lobster based on those $4.50 and $5.00 shore prices last spring, suffered greatly.
Then in the fall of the year, when the Southwest Nova guys started, you'll recall the prices there were very low as well. What we're seeing right now is a hangover from that. There was inventory left from last spring as we entered this spring. There was a recognition by the processors that they were not going to get caught again, so that's why you see these lower prices today.
11:30 a.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
I don't want to take that too far, but it sounds as if it's a situational occurrence and it might right itself by the time we move into the fall. Is that a possibility?
11:30 a.m.
Executive Director, Lobster Council of Canada
Hopefully.
These things always do right themselves. Year in and year out people pay too much, people pay too little. It ebbs and flows, but generally it works itself out. We've now seen 12 months of a tough market.
The crazy thing about this industry, which we all have to remember, is that there is a live market and a processed market. The live market, through this whole time, has generally been quite steady. As we know from the spring, people who were producing for the live market were getting $4.50 a pound, while people who were producing for the processing market were getting $3.50 a pound. They're distinctly different markets, which everyone has to remember.
The live market has been quite steady. The product for the live market was actually extremely short this winter, which is why it went up to $10 a pound in March. There were crazy shore prices in the winter, because we actually had a winter and there was no product available.
11:35 a.m.
Conservative
11:35 a.m.
Conservative
11:35 a.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
I'm out of time, so I'll have to try later, perhaps.
Thank you very much, sir.
11:35 a.m.
NDP
Philip Toone NDP Gaspésie—Îles-de-la-Madeleine, QC
Sorry, Mr. Woodworth. We don't have a lot of time for our questions.
Perhaps I will take on from where you left off.
Is there a difference between spring lobster and fall lobster? You're mentioning that one of the things we need to do is a quality grading program. Is there a difference in quality between those products?
11:35 a.m.
Executive Director, Lobster Council of Canada
Absolutely.
There's a difference in quality between every area, and between every region. A lobster is not a lobster. It's different everywhere.
11:35 a.m.
NDP
Philip Toone NDP Gaspésie—Îles-de-la-Madeleine, QC
Thank you.
Is it safe to assume that the product that's harvested in the fall is of a lesser quality than that harvested in the spring?
11:35 a.m.
Executive Director, Lobster Council of Canada
It depends on exactly when. It's all about when the lobster has recovered from its moult.
Biologists study that all the time, and we study it as well. But fall lobster in most of Canada hasn't fully recovered yet. Any season that isn't in the fall can have a large percentage of soft shells and poorer meat-yielding lobsters. Generally in the spring, in every LFA it's top quality. But there are still differences in quality, even in the spring. You can't ship all spring lobster to China, and you can't ship all spring lobster to Europe. The dealers, the processors, and the shippers know this very well, and that's how they price it. That's why you see different prices throughout the industry.
11:35 a.m.
NDP
Philip Toone NDP Gaspésie—Îles-de-la-Madeleine, QC
When you say you can't ship it all to China, and you can't ship it all to Europe, are you saying that most of it still goes to the United States?
11:35 a.m.
Executive Director, Lobster Council of Canada
I'm speaking about the live industry. For the live sector you have to have the very best quality to go in the air, to go to Osaka, or to Shanghai.
11:35 a.m.
NDP
Philip Toone NDP Gaspésie—Îles-de-la-Madeleine, QC
I noticed on your graph that the other regions, other than the United States, especially Asia, are growing quite rapidly. Has DFO assisted in marketing our product overseas, and if so, what's been the result of that?
11:35 a.m.
Executive Director, Lobster Council of Canada
Well, DFO doesn't do any marketing anymore. Agriculture Canada has the marketing file.
Yes, there have been some dramatic increases in China. The numbers are something like this. In 2008, we sold a couple of million dollars' worth of lobster to China, and last year it was $60 million. That's in five years, so China has become a real bright light. But 90% of the Chinese market is live, so you need the best lobster to go to China. Processing is growing very nicely, but....
Most of the marketing dollars come from the provinces and from the companies who are marketing.
11:35 a.m.
NDP
Philip Toone NDP Gaspésie—Îles-de-la-Madeleine, QC
What is a top-quality product, then? I hear often that carapace size is a measure of quality lobster.
11:35 a.m.
Executive Director, Lobster Council of Canada
No. It really has nothing to do with it.
11:35 a.m.
NDP
Philip Toone NDP Gaspésie—Îles-de-la-Madeleine, QC
What is the difference between the different sizes? I hear often that we have smaller lobsters, below 80 millimetres in carapace size, say, and we have 82 to 83 millimetres in the Magdalen Islands, for instance, which seems to be a higher quality.
How does size matter?
11:35 a.m.
Voices
Oh, oh!
