CLOSING PLENARY: SPECIES SUMMARY · • Production is stable, price has increased due to less supply from Russia • China has become more of a buyer of live king crab from Russia

CLOSING PLENARY:

SPECIES SUMMARYJohn Connelly

National Fisheries Institute

Plenary Summary

Wells Fargo• Currency valuations, whether in US or elsewhere, are

designed to help country ….. but cause uncontrollable reactions

• Strength of dollar helps some and hurts others

• Oil impacts corn … impacts soy … impacts farmed feeds …. impacts protein pricing, including fish (both farmed and wild)

Cattle• Seafood is not only tough business to be in

• “Irrational competitors”

SHRIMP• Disease looms as major issue

– EHP vs EMS—EHP depresses growth, but does not destroy whole ponds

• Global predictions are flat in 2016

– Ecuador flat;

– India and Indonesia likely down due to disease and decreasing efficiency of ponds

– Thailand, Mexico, possibly Vietnam, will be up

• China, a critical factor in global shrimp markets, expected stable 2016

• Ecuador ships near 50% to China with head-on shrimp commanding higher

price than headless

• Strong US dollar sends shrimp our way vs. EU and Japan

GLOBAL PELAGICS• Squid

– Remains limited by fried, calamari reputation

– Needs to reinvent itself to increase consumption

– Health conscious millennials should be eating squid, but markets have work to do with chefs

• Octopus– In contrast, octopus promotes itself as a diverse meal-time

option with several preparations: grilled, sushi, salad

– Growth in octopus supply is processed in Spain, due to quality

• Herring and Mackerel – Herring and mackerel remain predominately regional

product, popular in Northern Europe and Nigeria

– Impacted significantly by political and currency issues

TUNA, MAHI, GROUPER, SNAPPER,

SWORDFISH• Mahi

– Mahi landings significantly impacted by El Niño

– Refusals up and FDA 2016 decomp review will focus on mahi

– Affordable price point of popular fish tacos, often featuring mahi, can subject the species to substitution for tilapia or other whitefish when too expensive

• Tuna (non-canned)– Indonesia’s rigorous enforcement of IUU laws has led to the sinking of over 100 foreign vessels affecting

Vietnam and Philippines’ supply

• Grouper– Low percentage of U.S. grouper catch shares being used

– Longer term concern of aging crews and captains

• Snapper– Relative stability to continue in 2016

– Quota likely up in 2016

– Some political challenges in Gulf from recreational boats working to limit commercial quotas

• Swordfish– Swordfish suffers in popularity due to chef disapproval and consumer concern over mercury levels

– Become under-utilized species that needs better education for improved market

SALMON• Farmed

– Atlantic salmon has become the benchmark salmon market indicator

– Stagnating supply, potentially negative supply, growth for farmed salmon in next two years

– Loss of money in Chilean industry will increase prices, following two years of decline

• Wild– Harvest of pink will be down

– Sockeye harvest similar to 2015 levels

– Markets should increase slightly

SHELLFISHCRAB MEAT, OYSTERS, CLAMS, MANGROVE CRAB

• Blue Swimming Crab– 2015 volatile year – Market expected to stabilize in 2016 after undergoing correction – Watch for more imports of green mangrove crabs in the next few

years (which can be used as an alternative to soft shell blue swimming crabs)

• Oysters– Demand growth expected to continue due to expanded offering in

aquaculture oysters– Fits chefs desire for local sourcing story and consistent supply and

ideal shapes, sizes

• Clams – Take as long as beef to get to market size (2 years)

– Resource isn’t expected to recover from the effects of harsh weather in 2015 until 2017

SHELLFISHLOBSTER, SNOW CRAB, KING CRAB, SCALLOP

Lobster• Record lobster landings in US and Canada though significant shortage of lobster meat, producing an

unsustainably high price

• Restaurant use of lobster meat soars

• Production hampered by Canadian preference to produce frozen whole cooks; they require less labor and have strong demand

• Total sales match last year, though not growing because of Chinese uncertainties

Snow Crab

• Snow crab supply tighter due to 40% reduction in Alaska, consequent price pressure

• Snow crab, a middle market item - the lowest cost in shell crab – may be challenged by high pricing

• Japan is getting less snow crab, but other Asian countries (Singapore, Korea) are taking more

• Canadian raw frozen snow crab emerges in Japanese market as a replacement for Russian suspected IUU crab, previously sold fresh in Japan

•

SHELLFISH LOBSTER, SNOW CRAB, KING CRAB, SCALLOP

King Crab• Production is stable, price has increased due to less supply from Russia

• China has become more of a buyer of live king crab from Russia

• About 30% of king crab is sold to retail

Scallops• Scallop landings increased about 6% in 2015 and may increase again in 2016

• Some closed areas set to open in 2017

• Expectation that by 2017 or 2018, US scallop landings will be more than double current landings

• High prices partly due to failure of scallop fishery in Japan and weak production in China

• El Nino in Peru likely to cut production

WHITEFISH PANGASIUS, FROZEN TILAPIA, COD, HADDOCK, POLLOCK

• Pangasius– Continued production challenges

– Potential elimination of 21% of white fish from pangasius, caused by USDA rules, will force market to be creative

• Frozen Tilapia– Harvest stable

– Experiencing trend towards organic feed

• Cod– Stable quotas over last two year

• Haddock– Increase supplies in 2014, 2015

– “Haddock buyers” and those that switch form haddock basedon pricing --- “a cultural thing”

• Alaska Pollock– Projected increase in pollock as fishery cycles towards larger stocks

– Name change has created opportunity for product to create identify

• Chinese processing challenges and consolidation … to where next?

WHITEFISHFresh Tilapia, Catfish, European Sea Bass, Barramundi,

Sablefish, Halibut, Chilean Sea Bass• Fresh Tilapia

– Growth and export volume to U.S. has been in decline

• Catfish– Production stabilized in last 3 years, after 10 year decline

– USDA catfish inspection program could cause others to get out of the industry

• European Sea Bass– Slight production increase 3-5% in 2016

– Becoming a popular product for chefs

• Barramundi– Underutilized species

– Struggled because of appearance, inconsistency

• Halibut and Sablefish– Production decline last 4 years

• Chilean Sea Bass– Vessel sunk and IUU activities halted

CLOSING PLENARY:

SPECIES SUMMARYJohn Connelly

National Fisheries Institute