Covid-19’s effects on the lobster business
The COVID-19 protection measures that were imposed in March 2020 both domestically and internationally had an instant negative effect on the fish industry.
The revenue from commercial fish landings grew by three percent in January and February. Nonetheless, income decreased each month, beginning in March with a 19% decline and concluding in July with a 45% decline.
Five-year averages that account for inflation show that this translates into a 29 percent decline over those seven months.
This piece explores the effects of the worldwide health crisis on the lobster market as well as the industry’s prospects.
Minimal Demand
Is a high-end item that is usually consumed on special occasions. The global COVID-19 case count finally began to drop as lobster consumption increased.
At the end of 2019, China closed its borders, which had an impact on all significant lobster growers. The European Union soon followed suit with trade restrictions.
Furthermore, the impact of COVID-19 on the hospitality business resulted in the closure of restaurants, bars, and other culinary establishments that purchased fresh lobsters.
As a result, South Africa stopped exporting almost 90% of its rock lobster to China in February 2020. Another country that depends on the Chinese market for its lobster production, Australia, attempted to manage the situation by lowering its annual quota.
As the continent’s two biggest exporters of lobster, the US and Canada suffered the most as a result of the EU’s border controls.
Cheap Costs
The sector took off once China opened its doors to exports. However, fewer lobster sales in 2020 meant that lobster populations had decreased. Lower pricing were the result of abundant supply and low demand.
In the US, lobster prices fell to a four-year low at the start of 2020. Prices dropped by twenty percent.
The worst-hit region wasn’t Maine. In Florida, the cost of spiny lobsters decreased significantly. A pound of Florida spiny lobster can run up to $20 during the Chinese New Year holiday. 2020 saw a drop to $6.
The decline in lobster prices can be attributed in part to the leisurely pace of recovery in the hospitality sector.
Scarcity of labor
Limitations and social alienation resulted in fewer persons and fewer hours worked by employees. Therefore, sectors like fishing and lobster diving that depended on human labor were bound to experience a manpower shortage.
According to one FAO estimate, COVID-19 would result in a reduction of 1.7% of global seafood production, or three million metric tons (MT), and a $5.8 billion decline in the value of the seafood trade. Additional projections called for a 1.4 percent reduction in aquaculture production (1.2 million MT) and a two percent decline in capture fisheries production (1.9 million MT).
Businesses further down the supply chain were also negatively impacted by the shortage of raw materials, and logistics became more expensive and time-consuming due to growing delays in health checks, road border closures or restrictions, and widespread airplane cancellations.
Despite the fact that food processing was acknowledged as a necessary service, social separation laws and processing facility closures prevented certain fisherman from accessing the ocean.
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A fresh approach to conducting business
Roughly 70% of Maine lobster is offered for sale in dining establishments, casinos, and cruise ships. However, these lines are either completely stopped or run at a reduced capacity at the pandemic’s peak.
Revenue was lost by producers and processors who sold their goods through these channels. In an effort to counteract the economic effects, new business models evolved.
Producers of lobster discovered that consumer demand remained strong even after the pandemic. They simply needed to concentrate on a different market.
In Maine, for example, customers might buy lobsters from their neighborhood fish market, lobster co-op, or lobsterman.
Additionally, in an effort to maintain the sustainability of the commercial seafood business during the coronavirus epidemic, Rhode Island implemented a scheme that permits fishermen to sell specific species—including lobsters—to customers and retailers directly from the vessel where they were taken.
Economic Loss
Maine’s lobster supply chain supports $1 billion in yearly state economic growth and creates 4,000 employment statewide. Numerous lobstermen and processors were put out of business by the coronavirus outbreak.
The number of workers at restaurants, pubs, and catering companies decreased as well because of how much the crisis hit those industries. During the pandemic, 39% of job losses were in the leisure and hospitality sector.
Federal funding designated for fisheries and independent operators impacted by the coronavirus pandemic was given to numerous states, including Maine. However, it was insufficient to prevent the collapse of the seafood and aquaculture industries.