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Plummeting Lobster Prices Dragging Coastal Economies Down

August 11, 2009 - ROCKLAND -- Maine's lobster industry is struggling with the steepest price decline in generations, raising tensions between fishermen and wreaking economic havoc in communities up and down the coast.

The "boat price" of lobsters has crashed from a peak of more than $12 a pound in the spring of 2007 to around $2.50 a pound today. Moreover, lobstermen today are paying more for bait, fuel and gear, and many are burdened by debt they took on when they bought bigger, more powerful boats during the good times. Boats can cost as much as single-family homes.

Authorities say that desperation may play a role in what they say has been an above-average number of incidents of criminal mischief occurring along the coast this summer, such as cut trap lines and vandalized boats.

And there have been two high-profile attacks: a shooting on Matinicus Island and the sinking of three boats at Owls Head, a small town near Rockland.

Joe Ronco, 25, who works on a fish pier in Owls Head, said territorial conflict has been part of the industry for generations. But now, there are too many fishermen competing to catch too few lobsters.

"You cut a pie a hundred times, and all you have is mush," he said.

'BOAT PRICE' AT 19-YEAR LOW

The two high-profile incidents both took place in Knox County, where more lobsters were landed than in any other county in the United States. In 2007, fishermen there landed 19 million pounds of lobster – 30 percent of the state's total catch. The total value of the county's catch exceeded $83 million.

The Maine Marine Patrol shut down Matinicus Island's lobster grounds for three days after the shooting, and law enforcement officials have stepped up patrols in the area. No arrests have been made in the boats' sinking.

The problem comes down to supply and demand, said Jeff Woodman of Owls Head, who works both as a lobsterman and a wholesale buyer.

The lobster catch this summer appears normal. But hard-pressed consumers view lobsters as a luxury they can do without.

"What are you going to buy when you go to the store? Toothpaste and toilet paper," he said. "At the bottom of the list is lobster."

The boat price for lobster hasn't been this low since right around 1990 – and lobstermen's costs have risen considerably, said Bill Adler, executive director of the Massachusetts Lobstermen's Association, which tracks lobster prices in the region.

Last year at this time, lobster was selling for $4.50 to $4.75 a pound off the boats. In the market report for the week of Aug. 3, Canadian processors – which buy about half of the Maine catch – were paying between $2.50 and $3 a pound for soft-shell lobsters.

Adler blamed consumers' reluctance to buy what many see as a celebration food.

"Nobody's celebrating," he said.

DEPENDENT ON LOBSTERING REVENUE

In addition, the rainy summer in Maine has hurt tourism so much that there's less demand for live lobster from restaurants, said Pete McAleney, a Portland lobster wholesaler.

Maine fishing communities have become heavily dependent on lobster, which in 2007 accounted for 77 percent of the value of all fish landings in Maine.

For generations, fishermen had also caught groundfish, such as cod and haddock, for another source of income. But the groundfish industry in Maine has largely vanished, accounting for only 3 percent of landings.

The collapse of lobster prices is being felt for miles inland. The lost income has the same impact as the closure of a big employer, such as a paper mill, said Rodney Mason, who owns the Ship to Shore Lobster Co. in Owls Head.

"It's like being in a factory town when the factory closes, or where people who were making $20 an hour are now making $12," he said.

Fishermen are cutting back on supplies and equipment, such as rope, foul weather gear and traps, said Stephen Brooks, part owner of Brooks Trap Mill, a trap manufacturer in Thomaston. He said his yard now has twice as many unsold traps as normal.

A few years ago, lobstermen ordering custom traps had to wait six months. Now the wait is down to four to eight weeks. Demand has fallen so much that he hired four fewer people this summer.

"It's a strain all the way around. People are backed up to the wall," he said.

Steve Hixon, sales manager at Rockland Ford in Thomaston, ran a promotion in 2004 offering fishermen a $500 voucher at the Brooks trap company when they bought a truck. He sold 38 trucks to fishermen the first year.

By 2007, sales had dropped to eight. In 2008 and 2009, sales were so dismal that he dropped the promotion.

While the area can appear affluent because many wealthy people have moved here, Hixon said, there are also a lot of people who are in the cash economy and whose jobs are tied to the fishing industry. Not many local businesses can escape the effects of the industry's decline.

"It has devastated the midcoast," he said. "It has filtered through every business around."

Ed Kolmosky, owner of Fuller Oldsmobile Cadillac GMC Trucks Jeep Inc. in Rockland, said sales to fishermen are down 60 percent from three years ago. He said there are 4,000 fishermen in his market, and few are going to have enough money to order a new truck.

The same is true for other businesses, such as restaurants, bars and marine supply stores, he said.

"The only people who are getting more orders are law enforcement," he said.

– Staff Writer Matt Wickenheiser contributed to this report.
By TOM BELL, Staff Writer, Portland Press Herald, August 9, 2009


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