What is Happening to Lobster Prices?

What is Happening to Lobster Prices?

David Neimanis
5 minute read

The stories are true. Lobster was once seen as an undesirable crustacean, relegated to the likes of livestock feed and prison food. Fast forward to the year 2021, where there is now an underlying sense that the ‘under $25 lobster roll’ is a thing of the past, and yes, it’s clear that much has changed.

Lobster prices have simply skyrocketed over the past decade. From 2020 to 2021, the price of live lobster in Canada has increased by nearly 100 percent, and has increased by roughly 167 percent since 2014.

Volatility within the price of lobster is nothing new. Based on seasonality and yield of the given season, prices have consistently fluctuated, but nothing has rivaled the rate of change seen this year. 

So what exactly happened?


A Quick Change in Demand


As we collectively learned how to cook, eat, and enjoy lobster, its reputation underwent an incredible transformation, developing exposure in steakhouses, lobster shacks, and foreign seafood markets. Simply put, demand for lobster increased.

The unprecedented increase witnessed between 2020 and 2021 is believed to have also been significantly impacted by COVID-19. In 2020, live lobster exports fell by $125 million in Nova Scotia compared to the year prior. With a struggling global economy and significant decrease in eating out, the industry felt the impact. Yet, a year later when restrictions have since softened, there has been a noticeable increase in diners going out to eat—both near and far.


China Rivaling U.S. Lobster Demand

Since 2019, China has begun to rival, and at times surpass, the U.S. as the primary export market of Canadian Lobster. The country’s willingness to pay a premium on imported seafood has been instrumental for the recovery of Canada’s recovering lobster industry, but has clawed at any semblance of what many consider reasonable lobster prices.

Canada faces the difficult task of creating balance and diversification with its exports. The Halifax Stanfield International Airport has invested heavily into upgrading its facilities to handle a significant increase in the number of cargo flights to China and other Asian countries. 

However, as quoted in CBS News, Geoff Irvine, executive director of the Lobster Council of Canada, expresses his desire to diversify exports by saying, “we're hoping we can diversify more. We never like to see ourselves all in one market and we're going to do more work in Europe in terms of our marketing and in other parts of Asia."

 

Warming Waters Impact Exports

The Canadian lobster export battle between the U.S. and China isn’t immune to climate implications. Whereas Maine lobster tends to exceed the prices of Canadian lobster, there is evidence that shows that Maine lobster will eventually begin inhabiting Canada as ocean temperatures increase, causing a significant risk to Maine’s economy.

This shift is bound to cause an increase in demand for Canadian-imported lobster in the U.S. and contribute to a price spike in an attempt to accommodate the palates of those accustomed to the food group.


Is There a Solution?

For now, the only solution is to increase lobster prices. Expecting restaurants, retailers, and producers of products using lobster to not raise their prices is asking them to give away free food—an impossible business prospect.

Fortunately, lobster fishing has a long tale of responsibility, being one of the easier to regulate industries on water. In both Canada and the U.S, lobster fishers are required to obtain very specific licenses that grant strict regulations on the number of traps that can be carried and where they can be placed. It is of the utmost importance that the populations of lobster are protected for future generations to enjoy, no matter the cost.

 

What Does This Mean for Scout Lobster?

Scout will be increasing the price of our Atlantic Canadian Lobster. While this decision was not easy, it is the only option available if we want to continue sharing the joys of the cold Canadian waters in a shelf stable, low impact product. 

In the event that lobster prices decrease in future harvest seasons, we will revisit our pricing in an effort to provide more value to our customers. We will continue supporting small lobster fisheries, offer fair wages at each stage of the supply chain, responsibly source all of our products, and do so while charging prices that reflect our costs. Prioritizing these values allows us to take care of our team, our oceans & waterways, and prevents us from pricing out our fellow fisheries that pride themselves on Atlantic Canadian Lobster.

Lobster stocks stand little chance of predictability moving forward—meaning Scout’s lobster stocks will likely continue to fluctuate from time to time. Currently we are experiencing inventory obstacles as a result of the current supply chain challenges. We apologize if you’ve been inconvenienced by these changes, but rest assured, lobster will return and Scout will continue to offer a diverse catalogue of responsibly sourced North American seafood.

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