Demand for Maine lobsters is running high, but prices remain flat, pinching profits, so the state is looking to diversify its fishing.
With tourism booming and demand for local lobster as popular as ever, life in eastern Maine this summer is good. But there's a catch.
Lobster prices have recovered very little from their historic lows last year, squeezing profits for lobstermen. That's prompted community leaders to push an idea that may seem radical to many Down Easters—making Maine less dependent on a single species from the sea. They're creating incentives for fishermen to catch a variety of high-quality marine food, at a fair price for the long haul.
Their collective efforts include the removal of Maine river dams to allow fish—including the endangered Atlantic salmon—to return to historic spawning grounds. Call it a lesson in fish diversification in eastern Maine, where lobster dominates the ecosystem.
"Long term, that's not a stable situation to have very few, other species and so much lobster," said Robin Alden, a longtime fisheries management expert and former Maine commissioner of marine resources.
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'Stored supply' glut
Lobstermen from Maine to Canada have again been battling excess supply this summer. Lobster off the boat is selling for as low as $2.20 a pound. That's up slightly from last summer, when lobster prices tumbled under $2 a pound in some regions.
Lobstermen were anticipating higher prices this summer, when stored lobster inventory began to emerge. "There's a back load of product in this market," said Carla Guenther, a fisheries science advisor for the Penobscot East Resource Center. The nonprofit, based in Stonington, Maine, supports fishing communities in eastern Maine.
Eight years ago, lobster boat prices averaged $4.63 a pound. Those prices have since tumbled nearly 50 percent, according to Maine fisheries landing data.
While Maine's Department of Marine Resources tracks boat prices for a variety of fish including lobster, there's no central database of real-time supply figures. That's coveted, market-driving information—much like data on the physical, spot oil markets.
"The stored supply (of lobster) is still high," said Guenther, adding inventory caught last fall may finally be showing up in the market. Lobsters are harvested year-round in Maine, although most are caught between late June and late December, when lobsters are most active.
But supply details emerging now—in the tail of August—are little comfort for independent lobstermen, who made financial plans for the year back in April, around tax season. Many had planned—and hoped—for lower supplies and higher prices that have not materialized. It costs a lobsterman around $500 just to leave the dock for one trip including fuel costs.
Maine lobsters usually are harvested by boat captains independently, or with one or two assistants. With lobster boat prices where they are, that leaves little profit for the independent operators.
Looking ahead, better prospects lie in weaning the region off lobster dependence, fisheries management experts say.
Fish lessons in diversification
As context, the economic diversity of marine resources harvested in Maine has collapsed nearly 70 percent, said Robert Steneck, a marine biologist at the University of Maine. Today, about 80 percent of the value of Maine's fish and seafood landings stems from lobsters. In 2012, the lobster catch generated more than $338 million in so-called dock value, according to the Maine Lobster Council.
In research published in Conservation Biology in 2011, researcher Steneck suggested Maine's economy was a "gilded trap," where short-term gains are overshadowing long-term ecological and social risks. The fear is of disease or other stress infiltrating Maine's lobster bounty, which would devastate the state's fishing and broader economy.
Hoping to create opportunities for fishermen to harvest more than just lobster, the Penobscot East Resource Center has created a permit bank for those who don't have federal access rights. The group is also working on a new plan for state licensing that would give fishermen more flexibility.
But even as wholesale lobster prices have collapsed in recent years, high-end restaurant lobster prices are buoyant, The New Yorker recently reported. Lobster, ironically, hasn't always been a gourmet item, marketed and priced as a luxury—not a commodity.
Live lobster became prevalent over canned lobster amid U.S. transportation innovations. As the country was linked by railroads, shipping live lobster in moist seaweed and ice became a reality, according to the Maine Lobster Council. As live lobster shipments from Maine increased, canneries began to shutter.
Then when air shipments became available during the 1950s, Maine lobsters could leave on a Monday and be eaten—fresh—in California on Tuesday to the delight of foodies.
A restored Penobscot River
But while fancy diners enjoy a premium lobster meal, east Maine community leaders hope to ensure diversity beyond the favorite crustacean.
The nonprofit Penobscot River Restoration Trust is improving access for sea-run fish along nearly 1,000 miles of historic fish habitat. The Penobscot in Maine is New England's second-largest river system. The restoration efforts will support nearly a dozen species of fish including Atlantic salmon, herring, American shad and alewives.
Alewives, in turn, will help restore ground fish including cod and haddock. Alwives also are an important source of local lobster bait.
Last year, the trust removed the Great Works Dam to improve access. The Veazie Dam removal began in July and is expected to wrap next year. A fish bypass will be built at a third dam, the Howland. "We're working to restore an entire suite of native sea-run fisheries," said Cheryl Daigle, the trust's community outreach coordinator.
The entire project, extending over several years, will also help boost existing hydropower production and spur business among a varied group of small-business owners—salmon anglers, fishing guides, fly and tackle shops and recreational companies. They're hopeful the restored river will support the regional economy, which includes fishing, paddling, canoeing and other kinds of outdoor tourism.
"We're talking about the system's resilience," said fisheries expert Alden. "The river restoration has the tremendous potential for rebuilding the health of the marine ecosystem in eastern Maine."
—By CNBC's Heesun Wee. Follow her on Twitter @heesunwee.
First published September 1 2013, 7:39 AM