By QUINTON SMITH/YachatsNews
If you buy a fresh Oregon Dungeness crab from the market this weekend, you’ll pay around $7.95 a pound – half what it cost this time last year.
But because of the dynamics of the industry – and the law of supply and demand – the crabber who has hundreds of thousands of dollars tied up in a boat and spent 36 hours tossed around at sea this week is being paid half — $2-3 a pound — of what he earned last year.
The owners and operators of Oregon’s 320-boat Dungeness fleet — just like their farming counterparts — are at the mercy of the sea and the market, which can range from boom to gloom depending on a number of factors. After a boom in Dungeness prices last year, this year it’s mostly gloom for the fleet because of the season’s late start and unsold, frozen crab from 2020-21.
Oregon’s most valuable commercial fishery officially opened Sunday. But stormy weather kept a lot of the fleet in port until mid-week. They’re just now delivering the bounty from pots that had been sitting on the ocean bottom for days.
“It’s largely weather, but if the price was $5 a pound you’d see a lot more boats out there,” said one industry expert who was granted anonymity to speak candidly. “But at $2 a pound, a lot may say ‘I’m not risking my crew for that’.”
Issues this year were set up last season, when commercial crabbing opened Dec. 1 – the first time in eight years it started on the earliest possible date. That opener came just in time for the holidays when consumers still had stimulus money and were ready to throw off pandemic restrictions.
The average price per pound in December 2021 was $4.91, rose to $5.98 in January 2022 and reached $7.58 in April. The average for the season, which can stretch to August, was $5.33 per pound, according to the Oregon Department of Fish & Wildlife.
That led to 15.3 million pounds of Dungeness crab being caught in December and January – nearly 90 percent of the 2021-2022 season’s total harvest.
This month the opening price for crab destined for the “live” and the whole, cooked market is $3 to $3.25 per pound. The price of crab that Oregon processors will freeze for shipping or store for the future is $2.25 per pound.
Those are half the prices of last January.
“It’s like anything else – it’s supply and demand,” said longtime crabber and fisherman Tony Pettis of Toledo, who owns the F/V Heidi Sue and sells to a buyer for the “live” market. “It’s a very dynamic fishery. But $2.25 a pound? That’s a tough price.”
Six week delay to season
While the Oregon Dungeness season can officially begin Dec. 1, state biologists sample crab weekly along the coast to monitor the amount of meat in each and to test for levels of domoic acid in their guts. If tests show low levels of meat or high levels of acid, then the season is delayed – sometimes coast wide or sometimes just in specific areas.
This season the coast-wide harvest was first delayed from Dec. 1 to Dec. 15, then again to Dec. 31, and a third time to Jan. 15 – but only from Manzanita in the north to Coos Bay in the south.
The north coast season opens Feb. 1; ODFW expects to know Friday when the south coast season might begin.
The delays this year led to the formation of a group of smaller boat owners who said state regulators could have opened specific areas of the ocean to crabbing in early December – in time to meet holiday demand. The group, which has formed a nonprofit organization to advocate for small- and mid-sized crabbers, is also critical of the makeup of an ODFW Dungeness advisory committee that it says is dominated by boat owners with 500-pot permits and processors who have an interest in keeping prices low.
“The bottom line is that the delays this season have been a disaster for most stakeholders … and for the family-wage jobs we support in our coastal communities,” Perry Bordeaux of Newport who fishes out of the F/V Das Bug, said in a statement accompanying the letter.
The publication of the letter led to an unusual rebuttal from the ODFW and Oregon Dungeness Crab Commission, which defended testing procedures and the late start as necessary to maintain high quality.
But this week’s opening during heavy winter storms forced Bordeaux to pay a larger boat $10,000 to drop his 300 crab pots because his 40-foot boat could not leave the Port of Newport. Since then, he’s returned once with nearly 10,000 pounds of crab for a fresh market buyer and his wife’s seafood store in Corvallis.
“It’s certainly enough to put food on the table,” he said Wednesday night. “But the next few days and weeks will determine how the season really goes.”
After an initial surge the first 3-4 weeks, Bordeaux said there is a marked decrease in the Dungeness success. That leads many boats – especially the bigger ones – to move on to shrimp, black cod, salmon and tuna later in the season.
Many operators, many goals
The Dungeness crab fleet ranges from small operators like Bordeaux, to Pettis’ 60-footer which has a 55,000 pound capacity, to massive crabbers with a 200,000 pound capacity that stay at sea for weeks.
Some of the largest boats are owned by Clackamas-based Pacific Seafood, which dominates the Newport bayfront and the Oregon seafood industry after aggressively expanding up and down the West Coast.
Industry observers, crabbers and processors say it was the early start and heavy demand in 2021-22 that led to the record-high prices. “Last year’s price raised a lot of eyebrows,” the industry expert said.
But Pacific Seafood kept buying at the high prices for its large frozen market, then got caught with inventory during the summer when consumers suddenly stopped spending as they began to worry about high inflation and prospects of a recession.
“And then it just came to came to a halt,” Dan Obradovich, Pacific Seafood’s Dungeness crab manager told the industry publication SeafoodSource in November. “Once we work through that bubble of inventory then I feel like things will get back to normalcy. It’s going to take a little while, but definitely that adjustment in price was painful for a lot of people. The prices are going to have to adjust. But I don’t see the market getting back to where it was a year ago, just because I don’t see that kind of demand happening.”
Crabbers generally do not come together to negotiate prices with processors. They tried several times over the last six years, then broke apart when some crabbers left port to set and pull pots. The fleet is too varied and each operator has their own issues and goals to easily organize.
Oregon law allows associations to try to organize crabbers at each of the coast’s major ports, but they need 51 percent of the permit holders to sign on in order to represent the entire group. Processors can also organize into a bargaining group, but also need cooperation from processors who handled 51 percent of the harvest.
There has not been enough participation from either side the last three years to have the Oregon Department of Agriculture help with price negotiations.
The organization in Newport – called the Newport Crab Marketing Association – currently has about 20 members.
“It’s hard to organize fishermen to bargain,” said association secretary Bob Kemp, who owns the 51-foot F/V My Lee.
On Jan. 12 Pacific Seafood sent a letter to Oregon crabbers notifying them it would pay $3 a pound for the first 400,000 pounds of live crab and $2.25 for cooked quality crab. It gave crabbers wanting to sell to them 48 hours to sign on. Prices are similar for the handful of other commercial processors along the coast.
Once the season is under way, Pacific Seafood said, its managers at each processing plant had authority to adjust prices based on quality, ability to sell to live or frozen markets, the harvest volume and operating costs.
Dungeness crabbers are also seeing greater demand for live crab shipped in containers to China and other Asia markets. Oregon’s main processors sell to that live market, but crabbers like Bourdeaux and Pettis also sell directly to Asian buyers who then ship or process it.
“The small boat fisherman has more of the ability to get into self-selling,” said Kemp.
Bordeaux said his low operating costs and ability to sell directly to fresh-market buyers right off the dock make the effort sustainable for him.
“It’s similar to ‘farm-to-table’ but just called ‘deck-to-table’,” he said. “I’m certainly in the minority on that, but it’s a growing trend because of the consolidation in the main processing industry.”
Balancing the market
Missing the two major U.S. winter holidays and the Chinese New Year is more of a blow to the smaller crabbers, industry experts say, not the big processors who take in millions of pounds of crab and focus on the frozen market that spreads their sales over the rest of the year.
The question is if demand for Dungeness – especially after the collapse of the King crab fishery in Alaska and export ban on Russian snow crab – can hold up to make it worthwhile for crabbers like Bordeaux, Pettis and Kemp to keep at sea for more than a month.
Many consumers consider Dungeness a luxury purchase, especially when prices go over $10 a pound. So the low prices this year may help keep demand up – even if the holidays are over.
“There’s so much that goes into it,” Pettis said. “There are 400 fishermen who are all very different and all of these boats work other fisheries … it’s very dynamic. We want to get a good price. But we don’t want to drive customers away with too high a price.”
- Quinton Smith is the editor of YachatsNews.com and can be reached at YachatsNews@gmail.com
So well researched and informative. Thank you.
Exactly. Thank you, Quinton, for this in-depth and clear examination of the market forces at play and their impact on our local fleet.