Snow crab producers could limit production to help international market, says seafood association

Association of Seafood Producers executive director Derek Butler says fast-paced production has caused the market to stall, leaving buyers to wonder where it will go next.

Fish, Food & Allied Workers union president says nothing should be done to jeopardize incomes

Derek Butler is the executive director of the Association of Seafood Producers, an industry trade association in Newfoundland and Labrador that represents more than two dozen seafood processing companies. (Terry Roberts/CBC)

The supply of snow crab produced in Newfoundland and Labrador is outpacing demand, leaving industry figures to ask if it's worth slowing production to allow the market to catch up.

The provincial snow crab quota was set at 50,470 tonnes by Federal Fisheries Minister Joyce Murray in March, a 32 per cent increase from the previous year. More than 60 per cent of the total quota has already been caught and processed, according to Derek Butler, executive director of the Association of Seafood Producers.

Butler says the fast-paced production has caused the market for crab to stall, causing the industry to wonder where it will go next.

"It's a situation where we continue to buy, produce and to build inventories without the required sales to support those inventories," Butler said Monday.

"Snow crab is a fantastic product.… But now with inflation and the other fiscal realities consumers are facing, snow crab is not in the same demand as those levels."

Butler said the uncertainty has caused hesitancy in markets such as the United States and Japan, which are waiting to see where the price of snow crab bottoms out. The current price sits at $6.15 per pound, down from $7.60 at the beginning of the season.

Tell us what you think!

Help shape the future of CBC article pages by taking a quick survey.

Although the decision to limit production is up to producers, Butler says it could be beneficial for the fishery — sending a message to buyers that producers are supporting the market by limiting supply and stabilizing the price.

"The market needs to signal that at this point. We will begin to curtail production to support the market, basically. To allow the market to say, 'Now we're at the bottom. We can step in and we can be begin to buy in confidence,'" he said.

"We've bought to this point over a half a billion dollars worth of crab.… We cannot continue to produce crab and not have sales and have the level of expenditure, over half a billion dollars, that we have had."

Fish, Food & Allied Workers president Keith Sullivan says harvesters have a 'high level of concern' about Butler's comments. (Terry Roberts/CBC)

Butler said he believes decisions from producers to limit production could start coming through later this week, but the head of the union that represents harvesters in the industry says he has "a high level of concern" about the suggestion.

"This is a main income for so many people in the province, and we hope there's nothing done to really jeopardize that," said Keith Sullivan, president of the Fish, Food & Allied Workers union.

Sullivan said plants workers he's spoken to have questions about what scaling back would mean for their employment, and what it would mean for harvesters on the water as the season continues into August.

"People are not going to accept being tied on while these 'company boats' as they're called, tied directly to fish companies, are able to harvest," Sullivan said. "Or if they continue to bring in high price crab from out of the province and not allow local harvesters to fish and land their product."

Read more from CBC Newfoundland and Labrador

With files from The Broadcast