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Overview of the Atlantic Canada seafood industry:
structure, markets, marketing
Overview of the Atlantic Canada seafood industry:
structure, markets, marketing
MonctonFebruary 23, 2007
MonctonFebruary 23, 2007
HalifaxHalifax Gardner PinfoldGardner Pinfold 22
Atlantic seafood industry worth $3 billionAtlantic seafood industry worth $3 billion• New Brunswick
production from capture fisheries and marine aquaculture worth about $1 billion, that’s 25% of the Canadian total
• New Brunswick production from capture fisheries and marine aquaculture worth about $1 billion, that’s 25% of the Canadian total
Value of seafood exports from the Atlantic Provinces and
Quˇbec, 2006
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Value of exports
$000
sNSNBPEQUNL
HalifaxHalifax Gardner PinfoldGardner Pinfold 33
Focus: how derive more valueFocus: how derive more value
• Getting the structure right: optimal harvesting and processing structure with a common aim of producing high quality products to diversified markets
• Improving the terms of trade: a more coordinated approach to limit the increasing market power of distributors
• Getting to the right market: product & market development to reduce exposure to commodity conditions
• Establishing the brand: healthy products/ clean environment/ sustainable harvesting practices
• Getting the structure right: optimal harvesting and processing structure with a common aim of producing high quality products to diversified markets
• Improving the terms of trade: a more coordinated approach to limit the increasing market power of distributors
• Getting to the right market: product & market development to reduce exposure to commodity conditions
• Establishing the brand: healthy products/ clean environment/ sustainable harvesting practices
HalifaxHalifax Gardner PinfoldGardner Pinfold 44
TopicsTopics
• Industry overview• Global supply and demand• Resource status• Harvesting• Production and markets• Issues and options• Sector performance & challenges
• Industry overview• Global supply and demand• Resource status• Harvesting• Production and markets• Issues and options• Sector performance & challenges
HalifaxHalifax Gardner PinfoldGardner Pinfold 55
Crab: key statisticsCrab: key statistics
• Crab 2006– $280 million landings– $400 million exports– 4,000 vessels– 82 plants– 22,000 employed
• Crab 2006– $280 million landings– $400 million exports– 4,000 vessels– 82 plants– 22,000 employed
– Trends• Resource• Landings• Price• Export
– Outlook 2007
– Trends• Resource• Landings• Price• Export
– Outlook 2007
HalifaxHalifax Gardner PinfoldGardner Pinfold 66
Shrimp: key statisticsShrimp: key statistics
• Shrimp 2005– $240 million landings– $485 million export– 470/13 vessels– 20 plants– 6,200 employed
• Shrimp 2005– $240 million landings– $485 million export– 470/13 vessels– 20 plants– 6,200 employed
• Trends– Resource– Landings– Price– Export
– Outlook 2007
• Trends– Resource– Landings– Price– Export
– Outlook 2007
HalifaxHalifax Gardner PinfoldGardner Pinfold 77
Lobster: key statisticsLobster: key statistics
• Lobster 2005– $600 million landings– $1,000 million export– 9,770 vessels– 50 plants– 35,000 employed
• Lobster 2005– $600 million landings– $1,000 million export– 9,770 vessels– 50 plants– 35,000 employed
• Trends– Resource– Landings– Price– Export
– Outlook 2007
• Trends– Resource– Landings– Price– Export
– Outlook 2007
HalifaxHalifax Gardner PinfoldGardner Pinfold 88
Key speciesKey species
• $1.6 billion total landed value
• Three species dominate: lobster, crab & shrimp
• Lobster: decline & recovery
• Crab: cyclical growth & price instability
• Shrimp: steady revenue decline
• $1.6 billion total landed value
• Three species dominate: lobster, crab & shrimp
• Lobster: decline & recovery
• Crab: cyclical growth & price instability
• Shrimp: steady revenue decline
Atlantic fisheries, landed value by species ($000)
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1990 1993 1996 1999 2002 2005
LobsterCrabShrimpScallopGroundfish
Source: DFO
HalifaxHalifax Gardner PinfoldGardner Pinfold 99
TopicsTopics
• Industry overview• Global supply and demand• Resource status• Harvesting• Production and markets• Issues and options• Sector performance
• Industry overview• Global supply and demand• Resource status• Harvesting• Production and markets• Issues and options• Sector performance
HalifaxHalifax Gardner PinfoldGardner Pinfold 1010
Global supply and demandGlobal supply and demand
• Snow crab supply– Steady at 150-170,000 t– Canada produces 65%– Five others produce 35%– Alaska source of instability– Substitutes influence prices
• Snow crab demand– Two markets: US & Japan– Food service & retail
commodity in U.S.– Mainly food service in
Japan (sushi & sections)– Demand price sensitive
• Snow crab supply– Steady at 150-170,000 t– Canada produces 65%– Five others produce 35%– Alaska source of instability– Substitutes influence prices
• Snow crab demand– Two markets: US & Japan– Food service & retail
commodity in U.S.– Mainly food service in
Japan (sushi & sections)– Demand price sensitive
• Coldwater shrimp supply– Up 50% to 450,000 t since ‘98– Canada produces 40%– Three others produce 45%– Competing with 65 species– 7% of global supply 6 MM t
• Coldwater shrimp demand– Two markets: US & EU (UK) for
C&P - mainly retail– Japan & China for shell-on
frozen - retail & restaurant– Demand not keeping up with
supply
• Coldwater shrimp supply– Up 50% to 450,000 t since ‘98– Canada produces 40%– Three others produce 45%– Competing with 65 species– 7% of global supply 6 MM t
• Coldwater shrimp demand– Two markets: US & EU (UK) for
C&P - mainly retail– Japan & China for shell-on
frozen - retail & restaurant– Demand not keeping up with
supply
HalifaxHalifax Gardner PinfoldGardner Pinfold 1111
Global supply and demand:lobster and groundfishGlobal supply and demand:lobster and groundfish• Lobster supply
– Steady at 80-90,000 t– Canada produces 55%– U.S. produces 45%– High exploitation rate– Canada processes 50-70%
of U.S. catch• Lobster demand
– U.S. consumes over 80% of total supply
– Live & processed at 50% each
– Demand is price sensitive
• Lobster supply– Steady at 80-90,000 t– Canada produces 55%– U.S. produces 45%– High exploitation rate– Canada processes 50-70%
of U.S. catch• Lobster demand
– U.S. consumes over 80% of total supply
– Live & processed at 50% each
– Demand is price sensitive
• Groundfish supply– Declined from 12 to 7
million tonnes– Cod/pollock main species– Farmed finfish has
substituted (tilapia/salmon)• Groundfish demand
– U.S. & EU major markets– Limited growth in frozen– Fresh segment exhibits
strongest growth
• Groundfish supply– Declined from 12 to 7
million tonnes– Cod/pollock main species– Farmed finfish has
substituted (tilapia/salmon)• Groundfish demand
– U.S. & EU major markets– Limited growth in frozen– Fresh segment exhibits
strongest growth
HalifaxHalifax Gardner PinfoldGardner Pinfold 1212
Global snow crab supply stableGlobal snow crab supply stableGlobal supply of snow crab, 1990-2005
0
50
100
150
200
250
90 92 94 96 98 00 02 04
000s
tonn
es
OtherJapanKoreaGreenlandRussiaCanadaAlaska
Source: FAO, GINR, NMFS, DFO
HalifaxHalifax Gardner PinfoldGardner Pinfold 1313
Coldwater shrimp supply increasingColdwater shrimp supply increasing
Global supply of coldwater shrimp, 1990-2004
-
50
100
150
200
250
300
350
400
450
500
1990 1994 1998 2002
000s
tonn
es OtherIcelandGreenlandNorwayCanada
Source: FAO
HalifaxHalifax Gardner PinfoldGardner Pinfold 1414
Lobster landings fairly stableLobster landings fairly stable
Lobster landings: Canada and the U.S.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
1990 1993 1996 1999 2002 2005
tonn
es CanUSTotal
HalifaxHalifax Gardner PinfoldGardner Pinfold 1515
Farmed species substitute for reduced groundfish supplyFarmed species substitute for reduced groundfish supply
Global "whitefish" supply
02468
10121416
1988 1992 1996 2000 2004
Source: Groundfish Forum 2005
Groundfish Flatfish Farmed fish
HalifaxHalifax Gardner PinfoldGardner Pinfold 1616
TopicsTopics
• Industry overview• Global supply and demand• Resource status• Harvesting• Production and markets• Issues and options• Sector performance
• Industry overview• Global supply and demand• Resource status• Harvesting• Production and markets• Issues and options• Sector performance
HalifaxHalifax Gardner PinfoldGardner Pinfold 1717
Resource status: CanadaResource status: Canada
• Snow crab– Stocks declined most areas– No area has strong
recruitment pulse• Variation by area
– NE NL: long-term prospects uncertain
– S. Gulf: stock in declining phase
– N. Gulf: biomass begins to decline in 2007
– ENS: stocks down recovery possible in 2007
• Snow crab– Stocks declined most areas– No area has strong
recruitment pulse• Variation by area
– NE NL: long-term prospects uncertain
– S. Gulf: stock in declining phase
– N. Gulf: biomass begins to decline in 2007
– ENS: stocks down recovery possible in 2007
• Shrimp– Stocks stable with uncertainty– Outlook positive for major
stocks • Variation by area
– NE NL: stocks stable with positive/uncertain outlook & some decline in average size
– Gulf/Estuary: stocks strong but decline to long-term average biomass in 2006 & beyond
– ENS: unstable with decline in average size and biomass
• Shrimp– Stocks stable with uncertainty– Outlook positive for major
stocks • Variation by area
– NE NL: stocks stable with positive/uncertain outlook & some decline in average size
– Gulf/Estuary: stocks strong but decline to long-term average biomass in 2006 & beyond
– ENS: unstable with decline in average size and biomass
HalifaxHalifax Gardner PinfoldGardner Pinfold 1818
Resource status: CanadaResource status: Canada
• Lobster– Mostly stable, declines
in some areas– No area shows strong
growth• Variation by area
– Northern gulf: stable– Southern Gulf: decline– Newfoundland: stable– Nova Scotia: decline
• Lobster– Mostly stable, declines
in some areas– No area shows strong
growth• Variation by area
– Northern gulf: stable– Southern Gulf: decline– Newfoundland: stable– Nova Scotia: decline
• Groundfish– No recovery most areas– Science unable to predict
when stocks may recover
• Variation by area– Some recovery in 3Ps cod,
Georges Bank haddock– Small redfish fisheries off
NL and NS – Turbot fisheries in Gulf and
off NL
• Groundfish– No recovery most areas– Science unable to predict
when stocks may recover
• Variation by area– Some recovery in 3Ps cod,
Georges Bank haddock– Small redfish fisheries off
NL and NS – Turbot fisheries in Gulf and
off NL
HalifaxHalifax Gardner PinfoldGardner Pinfold 1919
TopicsTopics
• Industry overview• Global supply and demand• Resource status• Harvest• Production and markets• Issues and options• Sector performance
• Industry overview• Global supply and demand• Resource status• Harvest• Production and markets• Issues and options• Sector performance
HalifaxHalifax Gardner PinfoldGardner Pinfold 2020
Crab landings reflect stock statusCrab landings reflect stock status
• Total down to 94,000 t in 2005 from 2003 peak of 106,800 t
• NL lands 47%, down from peak of 73% in 1999
• Gulf lands 46%• NS (SS) lands
7%
• Total down to 94,000 t in 2005 from 2003 peak of 106,800 t
• NL lands 47%, down from peak of 73% in 1999
• Gulf lands 46%• NS (SS) lands
7%
Crab landings by province
010,00020,00030,00040,00050,00060,00070,00080,000
1990 1993 1996 1999 2002 2005
tonn
es
NL NB NS QC PESource: DFO
HalifaxHalifax Gardner PinfoldGardner Pinfold 2121
Shrimp landings reflect stocks & market price Shrimp landings reflect stocks & market price • 80% of catch in
northeast NL waters• NL landings up three-
fold since 1997• Other provinces remain
steady or slight decline since 2003
• Low price make the shrimp fishery a marginal or losing proposition
• 80% of catch in northeast NL waters
• NL landings up three-fold since 1997
• Other provinces remain steady or slight decline since 2003
• Low price make the shrimp fishery a marginal or losing proposition
Atlantic Shrimp landings by province
0
20
40
60
80
100
120
140
1990 1992 1994 1996 1998 2000 2002 2004
Source: DFONL NS Que NB
HalifaxHalifax Gardner PinfoldGardner Pinfold 2222
Lobster landings declining in most areasLobster landings declining in most areas• Landings down
by 15% from 2001 peak
• QC fairly stable• Major decline in
Northumberland Strait
• Landings down by 15% from 2001 peak
• QC fairly stable• Major decline in
Northumberland Strait
Lobster landings by province
0
5000
10000
15000
20000
25000
30000
35000
1990 1993 1996 1999 2002 2005
Source: DFO
NSNBPEIQCNL
HalifaxHalifax Gardner PinfoldGardner Pinfold 2323
Crab shore prices at historic lowsCrab shore prices at historic lows
• Peaked in 2004 with increase in Japanese & U.S. demand
• Dropped sharply in 2005 as customers resisted high distributor prices
• Stayed low in 2006 as inventories cleared
• Peaked in 2004 with increase in Japanese & U.S. demand
• Dropped sharply in 2005 as customers resisted high distributor prices
• Stayed low in 2006 as inventories cleared
Average snow crab shore prices
0.000.501.001.502.002.503.003.504.00
1990 1995 2000 2005
$/lb
NSNBPEQCNL
Source: DFO
HalifaxHalifax Gardner PinfoldGardner Pinfold 2424
Crab prices sensitive to supplyCrab prices sensitive to supply
• Swings: high of US$4.50/lb and low of US$2.25/lb
• Drop in 2005 due to speculation
• By mid-2006 price down to US$2.75
• Upturn in Alaska landings may have played small role
• Swings: high of US$4.50/lb and low of US$2.25/lb
• Drop in 2005 due to speculation
• By mid-2006 price down to US$2.75
• Upturn in Alaska landings may have played small role
Crab landings and Canadian export price
020,00040,00060,00080,000
100,000120,000140,000160,000
1980 1985 1990 1995 2000 2005
tonn
es
0.00
2.00
4.00
6.00
8.00
10.00
12.00
US$
/kg
Alaska landings (t) Canadian landings (t)Can. export price ($/kg)
Source: ADF&G, DFO, NMFS
HalifaxHalifax Gardner PinfoldGardner Pinfold 2525
Crab price down by 50% since 2004Crab price down by 50% since 2004
• 35% due to price drop
• 15% due to exchange rate
• US$ price likely to strengthen in 2007, but could be partially offset by weakening economy
• 35% due to price drop
• 15% due to exchange rate
• US$ price likely to strengthen in 2007, but could be partially offset by weakening economy
Monthly U.S. snow crab import price
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06
$/kg
US$ price CAN$ priceSource: NMFS and Bank of Canada
HalifaxHalifax Gardner PinfoldGardner Pinfold 2626
Shrimp shore price at historic lowsShrimp shore price at historic lows
• Shore price down by 50% over decade as global supply exceeds demand
• Shore price approaches break-even level for harvesters
• Larger shrimp and stronger competition explain higher Québec price
• Shore price down by 50% over decade as global supply exceeds demand
• Shore price approaches break-even level for harvesters
• Larger shrimp and stronger competition explain higher Québec price
Inshore shrimp shore prices, 1990-2005
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1990 1992 1994 1996 1998 2000 2002 2004
Source: DFO
NLNBQC
HalifaxHalifax Gardner PinfoldGardner Pinfold 2727
Shrimp price drop worsened by exchange rateShrimp price drop worsened by exchange rate• Price decline
reflects supply > demand & availability of substitutes
• US$ price down 33% since 1995
• Stronger dollar means CDN$ price down 50% since 1995
• Price decline reflects supply > demand & availability of substitutes
• US$ price down 33% since 1995
• Stronger dollar means CDN$ price down 50% since 1995
Monthly export price of C&P shrimp to the U.S.
0.001.002.003.004.005.006.007.00
1995 1997 1999 2001 2003 2005
Source: NMFSU.S.$ price CAN$ price
HalifaxHalifax Gardner PinfoldGardner Pinfold 2828
Lobster market weakening, exchange rate cuts revenuesLobster market weakening, exchange rate cuts revenues• US$ price starting
to show some weakness after several years of steady growth
• CAN$ price shows downward trend since 2003
• US$ price starting to show some weakness after several years of steady growth
• CAN$ price shows downward trend since 2003
Monthly average export price of live lobster to the U.S.
0.00
2.00
4.00
6.00
8.00
10.00
12.00
jan jul jan jul jan jul jan jul jan jul
$/lb
CAN$/kgUS$/kg
Source: U.S. Dept. of Commerce and Bank of Canada
2002 2003 2004 2005 2006
HalifaxHalifax Gardner PinfoldGardner Pinfold 2929
Lobster shore price closely tracks U.S. marketLobster shore price closely tracks U.S. market• Price differences
by province reflect mainly size and product form
• Strong competition in NS and QC means low margins for shippers
• Price differences by province reflect mainly size and product form
• Strong competition in NS and QC means low margins for shippers
Average shore price of lobster by province
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
1990 1995 2000 2005
Source: MPO
NSNBPEIQCNL
HalifaxHalifax Gardner PinfoldGardner Pinfold 3030
Salmon market gains strengthSalmon market gains strength
• Salmon suffers long slide as supply exceeds demand
• Proximity to market and direct sales mean price premium for NB and BC
• Price began to turn the corner for Canadian producers in 2006 as suppliers to the U.S. shifted to EU in response to higher returns
• Salmon suffers long slide as supply exceeds demand
• Proximity to market and direct sales mean price premium for NB and BC
• Price began to turn the corner for Canadian producers in 2006 as suppliers to the U.S. shifted to EU in response to higher returns
U.S. import price, Atlantic salmon whole dressed,
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
1991 1994 1997 2000 2003 2006
U.S
. $/k
g NorwayChileCanada
HalifaxHalifax Gardner PinfoldGardner Pinfold 3131
Exchange rate cuts salmon pricesExchange rate cuts salmon prices
• Steady 1990s price decline offset by rising exchange rate
• Weakening U.S. dollar causes sharp drop in CAN $ price after 2002
• Steady 1990s price decline offset by rising exchange rate
• Weakening U.S. dollar causes sharp drop in CAN $ price after 2002
Annual average price of U.S. imports of Canadian whole dressed salmon
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
1991 1994 1997 2000 2003 2006
$/kg US $/kg
CAN $/kg
HalifaxHalifax Gardner PinfoldGardner Pinfold 3232
TopicsTopics
• Industry overview• Global supply and demand• Resource status• Crab & shrimp harvest• Production and markets• Issues and options• Sector performance
• Industry overview• Global supply and demand• Resource status• Crab & shrimp harvest• Production and markets• Issues and options• Sector performance
HalifaxHalifax Gardner PinfoldGardner Pinfold 3333
Crab exported to two markets:United States & JapanCrab exported to two markets:United States & Japan• $860 million
industry in 2004 drops to $600 million in 2005 and about $400 million in 2006
• Exports to China are processed for re-export to Japan
• $860 million industry in 2004 drops to $600 million in 2005 and about $400 million in 2006
• Exports to China are processed for re-export to Japan
Atlantic Canada total crab exports by market
0
100
200
300
400
500
600
700
800
900
1000
1996 1998 2000 2002 2004
$ m
illio
ns U.S.JapanChinaTotal
Source: Statistics Canada
HalifaxHalifax Gardner PinfoldGardner Pinfold 3434
Crab: market and cash driven exportCrab: market and cash driven export
• Sold to distributors who take position in market
• Export pattern reflects commodity product & consumption pattern
• Low margins limit ability to inventory/ brand and develop market
• Sold to distributors who take position in market
• Export pattern reflects commodity product & consumption pattern
• Low margins limit ability to inventory/ brand and develop market
Crab landings and exports by month, 2005
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
J F M A M J J A S O N D
Source: DFO and NMFS
exports landings
HalifaxHalifax Gardner PinfoldGardner Pinfold 3535
C&P shrimp exports by countryC&P shrimp exports by country
• $136 million industry in 2005
• US is main market (55%) despite adverse exchange
• C&P shrimp faces 20% tariff entering EU
• $136 million industry in 2005
• US is main market (55%) despite adverse exchange
• C&P shrimp faces 20% tariff entering EU
Atlanic shrimp C&P exports
0
10
20
30
40
50
60
70
80
1996 1999 2002 2005
mill
ions
de
dolla
rs
United StatesUnited KingdomDenmarkOthers
Source: Statistics Canada
HalifaxHalifax Gardner PinfoldGardner Pinfold 3636
Shrimp mainly a retail productShrimp mainly a retail product
• Sold to customers on as needed basis
• Demand far less seasonal than crab
• Imposes high carrying costs
• Competes with many other shrimp species
• Sold to customers on as needed basis
• Demand far less seasonal than crab
• Imposes high carrying costs
• Competes with many other shrimp species
Shrimp landings and C&P exports by month, 2004 & 2005
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
Jan
Mar Mai Jul
Sep NovJa
nMar Mai Ju
lSep Nov
Source: DFO and Statistics Canada
NL Gulf Atlantic exports
HalifaxHalifax Gardner PinfoldGardner Pinfold 3737
Lobster exports market and supply drivenLobster exports market and supply driven• NB accounts for
60% of Canadian processed lobster exports
• Over 90% of NB exports goes to the U.S.
• Processing sector relies heavily on imports from U.S.
• NB accounts for 60% of Canadian processed lobster exports
• Over 90% of NB exports goes to the U.S.
• Processing sector relies heavily on imports from U.S.
New Brunswick monthly lobster exports, 2005-2006
0
5
10
15
20
25
30
35
40
Dec Mar Jun Sep Dec Mar Jun Sep
$ m
illio
ns meatfrozenlive
HalifaxHalifax Gardner PinfoldGardner Pinfold 3838
TopicsTopics
• Industry overview• Global supply and demand• Resource status• Crab & shrimp harvest• Production and markets• Issues and options• Sector performance
• Industry overview• Global supply and demand• Resource status• Crab & shrimp harvest• Production and markets• Issues and options• Sector performance
HalifaxHalifax Gardner PinfoldGardner Pinfold 3939
Crab issues: control in hands of marketCrab issues: control in hands of market
• Structured to under-perform: capacity/competition• Limited ability to influence harvest rate & quality• Fragmented. Pressure to sell. Little scope to market
• Processing
• Structured for short seasons: biology/fleet/economics• Poor handling practices, gluts and poor quality• Fleet viability an issue in some areas
• Harvest
• Dependent on distributors in just two markets• Commodity demand: price highly sensitive to supply• Threat of substitutes: Alaska/other crab species
• Markets
• Cyclical abundance• Low period in Gulf - long terms prospects uncertain• Climate unknowns pose threat to sustainability
• Resource
HalifaxHalifax Gardner PinfoldGardner Pinfold 4040
Crab options: measures to enhance valueCrab options: measures to enhance value
• Eliminate/limit financial support to industry• Promote quality ethic and price/quality relationship• Assess merits of ISO 14000 certification
• Processing
• Stretch season to biological limits using price• Invest in quality: vessels/holding and education• Harvest
• Diversify into new market areas, eg, Europe• Promote alternatives to commodity consumption • Use consolidated/coordinated marketing approach• Consider regional branding
• Markets
• Improve scientific knowledge about the resource• Resist pressure to increase exploitation rates & TACs• Consider certification for eco-label
• Resource
HalifaxHalifax Gardner PinfoldGardner Pinfold 4141
Shrimp issues: market awash in shrimpShrimp issues: market awash in shrimp
• Overcapitalized/limited ability to influence harvest rate• High inventory carrying costs - distress selling• Weak financial position & limited scope for optimism
• Processing
• Quality: many vessels not designed for shrimp fishery • Poor returns limit scope for fleet upgrading• Harvest
• Concentrated market dependence (C&P/Shell-on)• Supply consistently running ahead of demand• Price weakness will continue/ product characteristics
• Markets
• Stocks stable with some uncertainty• Stocks benefit from ecosystem change• Resource
HalifaxHalifax Gardner PinfoldGardner Pinfold 4242
Shrimp options: measures to enhance valueShrimp options: measures to enhance value
• Eliminate/limit financial support to industry• Cut capacity from sector, promote 8-month season• Promote product/market development
• Processing
• Extend season to practical limits• Restructure fleet with fewer vessels, better technology• Harvest
• Target new market areas, eg, S. Europe/US/Far East• Continue action to eliminate EU tariff• Develop consolidated marketing/ regional branding
• Markets
• Improve scientific knowledge about the resource• Resist pressure to increase exploitation rates & TACs• MSC/eco-label important for EU market
• Resource
HalifaxHalifax Gardner PinfoldGardner Pinfold 4343
Lobster issues:Highly competitive industryLobster issues:Highly competitive industry
• Generates low margins: capacity/competition• Relies heavily on imports of U.S. lobster• Need product development in processed sector
• Processing/shipping
• Structured for short seasons: fleet/economics• Good handling practices but highly peaked supply• Strong competition means high shore price
• Harvest
• Dependent on one major market - U.S.• Price sensitive to supply/state of economy• Rising concern from animal rights activists
• Markets
• Overall abundance stable or declining slightly • High exploitation rate in most areas a concern• Unknowns pose threat to sustainability
• Resource
HalifaxHalifax Gardner PinfoldGardner Pinfold 4444
Lobster optionsmeasures to enhance valueLobster optionsmeasures to enhance value
• Eliminate/limit financial support to industry• Ensure adequate holding capacity to time the market• Promote product/market development
• Processing
• Ensure vessels have best holding methods• Extend fishery over the season• Remove any obstacles to competition at port market
• Harvest
• Diversify into new market areas: EU & Far East• Develop consolidated marketing approach• Market the environment & and optimal quality
• Markets
• Improve scientific knowledge about the resource• Reduce harvesting pressure/exploitation rate• Introduce increased minimum legal size/Eco-label?
• Resource
HalifaxHalifax Gardner PinfoldGardner Pinfold 4545
TopicsTopics
• Industry overview• Global supply and demand• Resource status• Crab & shrimp harvest• Production and markets• Issues and options• Sector performance
• Industry overview• Global supply and demand• Resource status• Crab & shrimp harvest• Production and markets• Issues and options• Sector performance
HalifaxHalifax Gardner PinfoldGardner Pinfold 4646
Crab short-term prospectsCrab short-term prospects
• Relatively stable harvest level for near term contributes to price strength
• Short season & glut/quality issues could be worse in 2007 as harvesters try to recover from two bad years
• Market outlook promising for 2007, full recovery may be held back by weak US economy
• Processors continue to be caught between supply-driven harvest and commodity-led demand
• Need to find a way to reduce cash flow pressures to allow focus on product and market development
• Relatively stable harvest level for near term contributes to price strength
• Short season & glut/quality issues could be worse in 2007 as harvesters try to recover from two bad years
• Market outlook promising for 2007, full recovery may be held back by weak US economy
• Processors continue to be caught between supply-driven harvest and commodity-led demand
• Need to find a way to reduce cash flow pressures to allow focus on product and market development
HalifaxHalifax Gardner PinfoldGardner Pinfold 4747
Shrimp short-term prospectsShrimp short-term prospects
• Limited prospects for price recovery in near term unless supply drops or markets expand
• Weak harvesting and processing returns unless costs are reduced & marketing enhanced
• Improvement in quality/yield tied to more appropriate harvesting technology - difficult to achieve given low prices & poor returns
• Improved returns tied to more disciplined marketing approach and market development in US, Far East and Europe
• Need to focus on optimizing industry structure/capacity to restore financial health to tackle marketing issues
• Limited prospects for price recovery in near term unless supply drops or markets expand
• Weak harvesting and processing returns unless costs are reduced & marketing enhanced
• Improvement in quality/yield tied to more appropriate harvesting technology - difficult to achieve given low prices & poor returns
• Improved returns tied to more disciplined marketing approach and market development in US, Far East and Europe
• Need to focus on optimizing industry structure/capacity to restore financial health to tackle marketing issues
HalifaxHalifax Gardner PinfoldGardner Pinfold 4848
Lobster: short-term prospectsLobster: short-term prospects
• Decline in supply puts upward pressure on price• Weakening U.S. economy puts downward pressure on
price - key factor for 2007• Processing sector relies heavily on U.S. landings, keeps
upward pressure on price in live market• Expect stable to lower U.S. prices, with some further
weakening of U.S. dollar.• Need to continue optimizing industry structure/capacity
to restore financial health to tackle marketing issues
• Decline in supply puts upward pressure on price• Weakening U.S. economy puts downward pressure on
price - key factor for 2007• Processing sector relies heavily on U.S. landings, keeps
upward pressure on price in live market• Expect stable to lower U.S. prices, with some further
weakening of U.S. dollar.• Need to continue optimizing industry structure/capacity
to restore financial health to tackle marketing issues
HalifaxHalifax Gardner PinfoldGardner Pinfold 4949
ChallengesChallenges
• Getting the structure right: optimal harvesting and processing structure with a common aim of producing high quality products to diversified markets
• Improving the terms of trade: a more coordinated approach to limit the increasing market power of distributors
• Getting to the right market: product & market development to reduce exposure to commodity conditions
• Establishing the brand: healthy products/ clean environment/ sustainable harvesting practices
• Getting the structure right: optimal harvesting and processing structure with a common aim of producing high quality products to diversified markets
• Improving the terms of trade: a more coordinated approach to limit the increasing market power of distributors
• Getting to the right market: product & market development to reduce exposure to commodity conditions
• Establishing the brand: healthy products/ clean environment/ sustainable harvesting practices