December 4, 2013
US scallop sales remain on the rise despite high prices
Despite prices being at record highs, US scallop sales remain steady in the run-up to Christmas, though pressure is expected to continue into next year as further quota reductions may likely to increase.
"Supply was obviously down substantially this year, and next year is looking a little bit worse," Terry Molloy, general manager of Chesapeake Bay Packing said.
While the 2014 quota is still being hashed out, general opinion is that it could be around 23–30 days in the open area and one closed area trip.
"That''s down from this year. Depending who you talk to, that''s down 10 or 15% from this year. Much depends on the production out of the open area, that''s the one that dictates the percentage it will be down by," said Molloy.
A National Oceanic and Atmospheric Administration (NOAA) spokesperson said that the council has yet to finalise quotas for 2014. "There are proposals under consideration which would result in quotas consistent with this year or reduced. The council votes on this in January."
A second source was more pessimistic again on estimates for next year. "We anticipate high prices through until March 2014. This year the quota was cut back by 30%, and next year it''s expected to decrease 15% or 20% – so a 50% reduction on 2012," David Cournoyer, general manager of Marder Trading, told Undercurrent.
Ken Salzinger, producer of email newsletter ''Ken''s Catch'', also reports hearing about a cut in the 2014 quota for the US fisheries, on top of the 30% drop for 2013, which was set at 20 million pounds.
There has been some talk in Canada about US quotas being further reduced, but nothing more than that, according to Dale Oldford of Ocean Choice International.
Expectations are for prices to remain strong in 2014, then in 2015 fishing areas will be re-opened, for instance those in the mid-Atlantic region that have not been open in a while. Therefore 2015′s outlook is an increase in production, potentially back to 2010-11 levels, suggested Molloy.
While Christmas is not as much of an important time for scallops as it is for a species such as shrimp, some upsurge in sales is expected. Prices continue to hover around the US$14 mark for the largest sized scallops (compared to US$11.60 this time last year, according to our prices portal), yet sales remain steady, said Molloy.
Sales of US scallops are mainly to foodservice, particularly in Chesapeake Bay''s case. Retail has shown more sensitivity to the prices, displaying some resistance, he said.
In terms of substitutions, foreign imports are starting to find their way into the US market more. When Japanese Hokkaido scallops first came in this year they had quality issues which was reflected in selling prices, but now are beginning to have more presence.
There are now probably more Peruvian scallops in the US market than there has been in years, added Molloy, and was echoed by Cournoyer, though he was keen to emphasise they were not a like for like substitution. Plus with less of Peru''s roe-on being sold to Europe than usual, more of that is being adapted and sold to the US, he added.
Maine-based supplier Bristol Seafoods said on its website in October it will be providing customers with Peruvian scallops, after the fishery was upgraded to sustainable by the Gulf of Maine Research Institute (GMRI).
It also announced an increase in demand for Japanese scallops, which it put down to the strong domestic scallop prices and quality of the Japanese product. The buyer has apparently secured a supply of Japanese product to ensure it can meet demand, including for U10s, for which there is even stronger demand, it said.
There is strong demand for Canadian scallops too, said Oldford, though he added that the country''s exports were only a fraction of what the US requires. The Canadian quotas for scallops in 2013 were around 6,300 tonnes, while the 2014 season has not been decided yet, a spokesperson from Fisheries and Oceans Canada said.
Overall, supplies of domestic scallops are expected to be fine for Christmas, with any potential shortages likely to be in U10s and U12s, which has often been the case historically.