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Global Supply, Demand and Markets for Lobster
What are the Opportunities for N. American Lobster
John Sackton Seafood.com
Halifax Oct 14, 2007
World Lobster Species
Homarus (N. America)
Homarus (Europe)
Panulirus spp (Brazil, Australia)Jasus spp (S. Africa, Australi
Overview of Global Supply of LobsterWorld Lobster Producton 2004
American Lobster
Spiny Lobster44%
Rock Lobster6%
European Lobster2%
c
48%
Source: FAO Globefish
Major Lobster Producing Countries (2003)
Canada37%
USA25%
Australia12%
Bahamas7%
Indonesia4%
Brazil4%
Cuba4%
Mexico2%
Nicaragua
New Zealand2%
Canada and U.S. have 60% of world productionSource: FAO Globefish
Lobster Producton By Major Species
0
10
20
30
40
50
60
70
80
90
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
AMERICANSPINYROCKEUROPEAN
units: 000’s metric tons
American Lobster Landings Doubled in 25 years
Source: FAO Globefish
Growth in Global Value of Lobster Imports
0
200
400
600
800
1000
1200
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
$ U
S M
illi
on
frozenlive
Value of World Lobster Imports Rising FasterThan Production Increasing
Source: FAO Globefish
7
Summary• N. American lobster is primary lobster species
by volume
• Production of Homarus Americanus has doubled in 25 years.
• Spiny Lobster/ Rock lobster is next largest category.
• Spiny Lobster Production has increased 40% in 25 years.
• Spiny / rock lobster names are used interchangeably in the market
7
8
Price relationships among lobster types in U.S.
• Cold water lobsters command highest price
• Warm water spiny lobsters, sold as frozen tails, often higher priced than North American frozen lobster tails
• North American lobster has most variation in both product form and price
Cold water lobster tails
•Used almost entirely in foodservice•Considered best tasting by many chefs•This is what justifies higher price
Warm water lobster tails•Sources: Brazil, Central
America, Caribbean•Some regional preferences, in California and Florida where local lobster is spiny lobster•Some live spiny lobster imported from Mexico
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
Jan-
04Ap
r-04
Jul-0
4Oct
-04
Jan-
05Ap
r-05
Jul-0
5Oct
-05
Jan-
06Ap
r-06
Jul-0
6Oct
-06
Jan-
07Ap
r-07
Jul-0
7Oct
-07
Live
4 oz tails
2 lb vac pk CK dry
Brazil 5 oz
Aust 5-6 oz A
Relative Pricing of Major lobster Products(US Market)
Source: Urner Barry Publications
Legal Seafoods and Gorton’s frozen tail meat
In most years, N. American fzn tails sell at the lowest prices
N. American
Tails 5-6 ozBrazil 5 oz Australia 6-
8 oz
2005 $17.85 $16.98 $22.48
2006 $18.37 $20.06 $27.56
2007 $20.28 $22.07 $30.70
3 year avg prices
Brazil
N. AmericanCaribbean
Australia
Source: Urner Barry Publications
Valuing N. American lobsters
• Live and whole cooked
• Frozen Lobster Tail
• Claw, Knuckle, Leg meat
• Prices vary due to market demand in all 3 segments
Darden Restaurants
16
Issues in valuing our lobster
• Spiny lobster:
• Small live market in Asia, some in Mexico and U.S.
• Most sold as Frozen tails
• Tail represents entire value of the lobster
• No need for meat production
N. American lobster
•Large live market
•Frozen tail represents only a portion of the lobster
•Value varies based on market demand in three markets: live, tails, and meat
17
Review of Lobster Supply to N. American Market
• Canadian Total Supply (landings plus imports)
• Canadian Production by product type
• Domestic sales in CA
• U.S. supply
• landings, imports of Homarus, imports of spiny Lobsters
• Exports: to Canada; U.S. exports overseas
• Usage by product, product type
Total Canadian Landings and Imports (live)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2000 2001 2002 2003 2004 2005 2006
Source: DFO and Stats Canada data from World Trade Atlas
Total Canadian Supply of Live Lobster
Imports Plus Landings
0
10,000
20,000
30,000
40,000
50,000
60,000
2000 2001 2002 2003 2004 2005 2006
Live for ExportLive for Processing
ve Exports and Domestic Volume Available for Processin
Exports
Processing (live weight, domestic landings)
units: Metric tons
Source: DFO and Stats Canada data from World Trade Atlas
Total Live Wgt Avail for Processing
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
2000 2001 2002 2003 2004 2005 2006
Local Production
Imports
Total Lobster Available for Processing including imports
Source: DFO and Stats Canada data from World Trade Atlas
Fzn Meat incl CKL packs and Cooked
shell off tails27%
Meat Other1%
Meat Canned2%
Meat fresh
Fzn in Brine incl. popsicles
14%
Fzn Cooked & Raw including boiled in
shell56%
7 year average breakdown of Lobster Exports
Avg live weight for processing =39,000 tons
Source: Stats Canada from World Trade Atlas
2006 N. American Fzn Lobster in shell imports
N. American Whole & Tails43%
Coldwater Tails11%
Warmwater Tails38%
Other8%
U.S. frozen lobster imports by type (2006)
Source: US Customs data from NMFS
Canadian whole fzn and tails = 43% of market
Shell on products only
N. American Whole & Tails33%
Coldwater Tails9%Warmwater Tails
30%
Other6%
Meat22%
Source: US Customs data from NMFS
U.S. shell on imports plus meat
Canadian market share 55%
N. American Whole & Tails19%
Coldwater Tails5%
Warmwater Tails17%
Other4%Meat
12%
Live43%
Source: US Customs data from NMFS
Total U.S. Imports: Live, fzn in shell and meat
Canadian total import market share for all lobster products: 74%
Legal Seafoods marketing live Lobster as haute cuisine
US 2006 supply showing Main Canadian Products
CA Live34%
Other Live24%
CA fzn14%
Other fzn & tails19%
CA meat9%
Total US Supply inlcuding domestic landings
Canadian Mkt share 57% US Domestic share 24%
Other lobster imports 19%Source: US Customs and data from NMFS
Total CA origin Ca Percent Product78,071,901 45,060,858 57.72% Live
19,441,256 19,441,256 100.00% Fzn in Shell
17,312,984 Warm Water Tails
5,235,592 Cold water tails
12,569,007 11,579,150 92.12% Meat
3,668,729 Other tails136,299,46
9 76,081,264 55.82% Total
Canadian products by volume (2006)
Source: US Customs data from NMFS
Major Overseas Markets for Live Lobster 2006
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
ITAL
Y
SPAI
N
FRAN
CE
JAPA
N
S Ko
rea
GERMAN
Y UK
BELG
IUM
TAIP
EIHon
g Ko
ngSW
ITZE
RLAN
DNET
HERLA
NDS
CAUS
Overseas markets for Live N. American lobster
Source: US and Canadian customs data
Seasonal Live lobster Shipments from US to Spain, France, Italy
0
100,000
200,000
300,000
400,000
500,000
600,000
Janu
ary
Febr
uary
March
April
May
June
July
Au
gust
Se
ptem
ber
Octob
er
Novem
ber
Decem
ber
FranceItalySpain3 Yr Avg France
Seasonal patterns of live lobster shipments
30Benchmarking Study on Canadian Lobster by Gardner Pinfold - Agriculture & Agrifood Canada
Issues in Valuing Lobster
Tail - 20-24%
Claw knuckle leg meat:9% to 13%
Live - 100%
Whole Cooked - 86%(average cook loss, can be reduced about 5% with STP
Yield is key to understanding processed lobster
Raw Frozen Tails Frozen raw split lobster body and ta
Yield issues make it important to “sell the shell”
Lobster Price at
Dock
Tails @ 23%Meat @ 14%
Tails @ 20%Meat @ 10%
$5.00 $13.51 $16.66
$6.00 $16.21 $20.00
Impact of yield on price
Lobster processing line at Ocean Choice PEI
Production breakdown of Processed Lobster78% is in-shell product
Frozen Products Breakdown (Gulf Region 2001)
meat15%
raw tail in shell31%
cooked in shell42%
blocks5%
in shell raw2%
KC tail meat
knuckle claw in shell3%
Source: DFO Policy and Economics Branch, Moncton
Darden’s menuing of cooked shell on frozen American lobster tail
Western Australia rock lobster production breakdown 2000-2006
(100% in shell)
Live, Frozen Whole Cooked, Raw go to Asia (China, Japan,
Taiwan)
Fzn Tails go to U.S., some to
Europe
Raw tails
Whl cooked
Whl raw
Live
Canner vs Market pricing in Canada3 Years of Lobster Prices
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
1/6/
04
3/6/
04
5/6/
04
7/6/
04
9/6/
04
11/6
/04
1/6/
05
3/6/
05
5/6/
05
7/6/
05
9/6/
05
11/6
/05
1/6/
06
3/6/
06
5/6/
06
7/6/
06
9/6/
06
11/6
/06
1/6/
07
3/6/
07
5/6/
07
7/6/
07
9/6/
07
CA Mkt NSCA MKT NBCA CN NBUS 1/4 in $CA
Source: PEI Dept. of Fisheries and Aquaculture and Urner Barry
Australia
South Africa
4 oz.5 oz.6 oz.7 oz.8 oz.9 oz.10 oz.11 oz.12-14 oz.14-16 oz.16-20 oz.20-24 oz.
Brazil, Caribbean
Size is key to pricing of lobster tails
3-4 oz. $18.50-19.004 oz. $19.75- 20.004-5 oz. $20.50- 20.755-6 oz. $21.50 - 22.006-7 oz. $22.50 - 23.00
N.American(w/ pricing)
40
Why lobsters go to processing
1. Too small for live market in U.S. (cannot sell lobster under 1 lb - 82 mm carapace)
2. Soft shell will not survive shipping or pound storage
3. Live market is saturated, further production depresses price, making price attractive for processing
41
Canners very sensitive to price
changes• A 20 cent change in dock price is equal
to
• $1.43 to $2.00 change in meat cost
• $.83 to $1.00 change in fzn tail price
• A $0.22 to $0.24 cent change in whole cooked price
Use of lobster claw knuckle meat by Darden
Popsicle packs containing a small whole lobster are mostly sold overseas, while canned lobster meat is a
small volume item
44
U.S. Live Market• Largest lobster
market
• Selling live is most cost effective way to sell lobster - no loss of yield.
• Market very volatile depending on supply
• Price varies by quality level: hard shell & soft shell
• Market channels are stable; little innovation or new presentation
• Retail is most price sensitive; takes soft shell
• White tablecloth foodservice takes highest quality
• Risk of dead loss from transport
• Not all lobsters suitable for storage in pounds
Hydrostatic pressure processing
Tray Pack of hydrostatic treated lobster
Issues: delicate to cook, has moisture loss, expensive
47
U.S. Fodservice Market for Frozen Lobster Products
• Frozen tails: mostly foodservice; chef’s tend to stick with what they know; regional preferences, takes major price swings to create adjustments
• Coldwater tails perceived as best quality and value
• Warm water tails and Am. lobster tails have been competitive lately
• Lobster meat bought extensively by Darden and regional distributors
48
U.S. Retail Market for Frozen Lobster
Products• Live sales of lower quality lobsters made at retail
• Many specialty retail products for use of claws and legs
• Also there is small market for lobster meat but cost is very high
• Processor must sell claws and knuckles in order to sell tails
• Any oversupply in any of these separate markets can cause problems
49
Summary• Live lobster sales are stagnant
• US Market is less attractive due to currency issues
• Live markets subject to oversupply/price collapse
• Growth is likely to be in value-added products and non-U.S. export markets
• Value added products require stable raw material prices
• Canadian industry not well structured to support growth of processed lobster industry
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