On Thursday, August 2, three lobster processing plants in New Brunswick were blockaded by area fishermen, according to a press release from the Maine Department of Marine Resources.
“[T]he blockading of Canadian processing plants and the prevention of deliveries of Maine lobsters on some trucks was very disturbing,” said DMR Commissioner Patrick Keliher in the press release.
Three plants were shut down and “at least two Maine trucks were escorted back to the border, unable to deliver the lobsters they carried,” continued Keliher.
Over the weekend and into the early part of this week, Canadian fishermen continued to block processing plants and several plants have stopped accepting U.S. lobster, according to Canadian broadcaster CBC News. On Tuesday, Governor Paul LePage issued a statement that he had been in conversation with New Brunswick Premier David Alward.
“I conveyed my concerns about the effects this could have on Maine’s fishing industry which provides a mutual benefit for both countries,” said LePage. “Maine fishermen have my complete support and should know that my administration is working with Canadian officials, fishermen and processors to reach a successful conclusion.”
The DMR Commissioner’s office declined to comment further on the issue.
Why so few processors in Maine?
The governor’s Tuesday statement said Canada “has an advantage due to the fact it has two dozen lobster processors, while Maine only has three.” The governor said the difference between the two countries “points to a much broader issue involving capacity of our own plants.”
Brent and Su Oliver, owners of Stonington Sea Products in Stonington, say that facility could be used for processing lobsters. Right now it is leased to Delbert Gross, who processes seafood, though not lobster on a grand scale. “We could do a gourmet thing,” said Oliver in a late July interview.
The cost of starting up even a small processing plant is substantial, said Brent Oliver. “It’s three million dollars to sit down at the table,” he said. Up-front costs include purchasing enough lobsters for processing (as much as 200,000 pounds for the 40,000 pounds that would make up a shipment), paying for labor, transportation and freezer storage. A processor must be able to “sit” on the processed lobster until there is a truckload, and even then there could be quite a delay before receiving payment for the initial shipment.
While Oliver is open to processing lobster at his facility, he isn’t sure who would have that kind of startup capital to take that risk. He notes that a government subsidy or grant might help such a venture get started, or investors.
Canada has subsidized employment costs that the U.S. can’t compete with, said Oliver, who cited payroll taxes, workman’s comp and other labor costs as prohibitive for a processing facility. State regulations can also create red tape that can add to startup costs, he said.
“I think the Island should process here, with a Stonington brand on it,” said Oliver. “It wouldn’t be quick fix this year.”
Kerin Resch, owner of Eastern Traders processor and dealer in Nobleboro, said during the August 1 Lobster Advisory Council committee meeting that the Maine market has the capacity to absorb this year’s unusually heavy catch. “People weren’t ready. But the capacity does exist,” said Resch. More important than increasing capacity, said Resch, is to increase market share.
Processor Cozy Harbor’s President and CEO John Norton said at the same meeting the downward pressure on boat price is creating new opportunities for market changes. Norton pointed to the processed, frozen lobster market as an example, which he said came out of the tumultuous seasons in the early 1990s. “Out of that shut down came processing lobster tails,” he said. “And for 15 to 18 years prices increased until 07/08. Out of these kind of times, new markets are created.”