Lobster Industry Faces “Unprecedented Gauntlet” of Issues

by Laurie Schreiber

PORTLAND, ME—The American lobster fishery is the most valuable single-species in North America.

But in both Canada and the United States, the fishery is facing an “unprecedented gauntlet” of challenges, according to a press release from the University of Maine Lobster Institute, which hosted the 15th Canadian/U.S. Lobstermen’s Town Meeting, April 5–6 in Portland.

The theme of the meeting was “Two Nations, Two Fisheries: Shared Challenges, Shared Opportunities.” Lobstermen, dealers, processors, scientists and policymakers from the Northeast United States and Atlantic Canada gathered to discuss the status of the lobster resource and the business of lobstering.

Challenges facing the industry include shifting lobster distributions in a warming ocean, dwindling bait supply, new gear restrictions to protect the endangered North Atlantic right whale population, and unpredictable global markets.

With each challenge comes new opportunities, said Richard Wahle, director of the Lobster Institute and a research professor in UMaine’s School of Marine Sciences.

“We share this amazing, iconic resource,” Wahle said in his opening remarks.

But the urgency of issues facing the industry made the meeting all that more timely, he said.

“We’re at a juncture,” he said.

Lobster is the No. 1 single species fishery in the United States and Canada. 90 percent of the U.S share comes from the Gulf of Maine and 80 percent of the U.S. share comes from Maine. Lobster is Maine’s No. 1 export commodity. Lobster landings constitute 1 percent of Maine’s gross domestic product, and there are significant multipliers through the supply chain, plus ancillary businesses like trap-making, boatbuilding, and tourism, Wahle said.

“We’ve surged to the pinnacle of this fishery,” he said. “This rise has come at a time when things like groundfish have declined dramatically over the past three decades.”

76 percent of Maine’s total fishery value comes from lobster alone.

“That’s a huge dependency,” he said. “The big questions are, How long will this last and what happen if there’s a downturn? So we’re facing some big prospects in the coming years.”

The Lobster Institute aims to contribute to the discussion by maximizing Maine’s engagement with industry stakeholders, in both the U.S. and Canada, he said.

“We all have this common goal of ensuring a sustainable and profitable fishery on both sides of the border,” he said.

Canada “shell game”

Stewart Lamont, managing director of Nova Scotia-based Tangier Lobster Co. – a Canadian exporter of live lobster to the international marketplace – said the lobster fishery in Canada in recent years has been “a shell game.”

“We can call it a business model but that would be mistaken,” Lamont said. “We clearly have our challenges.”

Lamont said the Canadian lobster has made a number of business mistakes over the past year. Those included paying prices to the fishermen that ignored market realities, and ignoring processing capacities in both Canada and the U.S. Canada, he said, focused on collecting and storing lobsters rather than on processing them in time for big sales periods, like the winter holidays and Chinese New Year. That resulted in lower price points, when the lobsters came out of storage, he said.

“We play this game in Canada called ‘hide the lobster,’” Lamont said. “That’s where we underrepresented how many lobsters we really have. If I have 100 pounds, I tell you I have 65. It allows us to leverage influence in the market. But this winter, it didn’t work at all. We have a lot of residual inventory now that’s gone from $11 to $7 per pound. There will be serious losses.”

The Canadian fishery underestimated the potential for catches, which turned out to be “phenomenal,” he said. But the fishery also overestimated the quality of the catch.

The fishery also made the mistake of falling “in love with China,” he said. “Our lives changed July 6, 2018. That was the date China imposed retaliatory tariffs on American seafood. We all of a sudden had a 25 percent advantage in Canada. We won he lobster lotto.”

For the next four months, the Chinese market demand propped up Canadian prices and sales,” he continued. “We suddenly had charter flights running directly from Nova Scotia to mainland China that we had never seen before.”

But Canada priced its lobster too high for the Chinese market, he said.

“China has not been in love with what we did to them,” he said.

“So we in Canada certainly have issues,” he said. “We haven’t quite figured out how to…market our product in a realistic way.”

Still, he said, “We think, if we can get back to a few fundamentals, the future is bright.” That includes improved transportation logistics to Asia, with direct charter flights from Nova Scotia to Korea and mainland China.

“We’ve done a good job of expanding Asia markets,” he said. But Canada needs to do a better job of serving customers in the U.S. and Europe, he said, adding that, currently, Canada’s transportation logistics makes it easier to get lobster to China than to the U.S. Midwest or to Europe.

Stefano Tijerina, head of the Canadian-American Center at the University of Maine, said the center’s goal is to forge partnerships in support of the U.S. and Canada fisheries.

“My goal is to educate the public and my students on…how things that happen in Maine have a global impact and how things that happen in around the world impact Maine,” Tijerina said. “The Maine lobster industry impacts the global market. The issues have global and local dynamics and impact many stakeholders.”

Beyond tariffs

Scout Wuerthner, who works in South Portland for Atlanta, Georgia-based Inland Seafood’s lobster division, said marketing problems are shared by both the U.S. and Canada.

Inland Seafood supplies over 5,500 restaurants and 2,500 retail outlets, according to its website, It has a complete processing plant, including butchering, packing, frozen storage, lobster tanks, cooking facilities, test kitchens, and more.

“There’s plenty of money to share,” Wuerthner said. “We just have to be smart about what we do with it.”

Wuerthner noted the China tariff was a blow to the lobster industry.

“But we adjusted,” he said of Inland Seafood. “We built a lot of other strong markets.”

His company, for example, expanded its U.S. market by figuring out how far it could truck lobsters. Now trucking lobsters 60 hours from the processing plant, the company has placed product as far away as Texas, in supermarkets, for example, that had never before handled lobster.

The Lobstermen’s Town Meeting was first held in 2004, and alternates between the U.S. and Canada each year.