Cape & Islands News

Lobster prices fall as economy slows

 Consumer demand drops, Icelandic credit lines dry up for processors

 A lobster at Osterville Fish & Lobster contemplates what worldwide economic trends mean for its fate.

Lobsters fetching a third of what they sold for three years ago

By James Kinsella

As the economy sags, prices have been falling on high-ticket items.

Jewelry. Luxury automobiles. Cape Cod real estate.

And don't forget that especially tasty denizen of upscale life: lobster.

In mid-December, small lobsters were being sold on the Cape for just under $5 a pound, about a third of the price that the crustaceans could fetch three or four years ago.

Prices since have ticked up a little - on Sunday, Osterville Fish & Lobster was selling small lobsters (inside pool at right) for $5.99 a pound - but they remain significantly below a more typical price in recent years, $10 or more per pound.

Customers are seeing a classic example of supply and demand: lots of lobsters, and not much lobster buying.

"Right now, they're dirt cheap," said Paul Dean, who's owned Osterville Fish & Lobster, on Route 28, for the past decade.

The slump in lobster prices has spread across the American seafood economy, abetted by consumers who are more concerned about making the next mortgage payment than laying out big bucks for high-end seafood.

But an aspect of the worldwide economic slump has played an even more key role in those low lobster prices.

Remember the crisis that hit Icelandic banks last year? Among other things, it turns out that the banks were key financiers of seafood processors who annually buy and freeze Maine lobsters.

When those credit lines dried up, the Detroit Free Press reports, the result was a rapid rise in the number of unprocessed, unfrozen, very much alive lobsters.

And they had to go somewhere. One place: retail seafood outlets.

Andrew Earle, co-owner of the Cape Codder Seafood Market on Route 28 in West Yarmouth, said the store has been running a special on lobsters since Columbus Day, with prices running below $6 per pound for small lobsters and below $8 for larger lobsters.

"We moved an abundance of them," said Earle, who worked on both inshore and offshore lobster boats for years before buying the fish market this past January.

Dean, left, said retail lobster prices, already low this autumn, began dropping even more precipitously after Thanksgiving, falling $1 or $1.25 per week for several weeks.

"There was an influx of product onto the market," he said. "Whether it was the world economy or the local economy, there was just less demand on the product."

Customers are responding, buying more lobster than usual.

The glut has led to a somewhat surreal scenario where Dean is using low lobster prices to lure shoppers into the fish market, where they then also might buy some pricier seafood, such as cod or haddock.

Though the Osterville market's price is higher on groundfish than on lobster - early Sunday afternoon, Dean was charging $11.99 per pound for scrod and $10.99 per pound for haddock - Dean said the fish still represent a better value per ounce than the crustaceans. Given the weight of a lobster's shell, he said, it takes about five small lobsters to generate a pound of lobster meat.

Whether retail lobster prices stay low on Cape Cod is another question.

The Cape's inshore lobster fishery has shut down for the season, though boats such as the Rachel Leah out of Hyannis continue to fish about 200 miles east of Hyannis.

At this time of year, the bulk of the lobster supply is from Canada - and that nation's lobstermen may choose to harvest fewer lobsters in a move to push prices back up.

On the other hand, the holidays are over, along with their pleasant excuse to splurge on special treats such as lobster.

So cool holding tanks at fish markets, rather than boiling pots on stoves, likely await some captive crustaceans for their immediate future.

 Truck tells passersby the tale of low-priced lobsters.