Last week thousands of Maine lobstermen kept their boats securely tied to their moorings and didn’t go fishing for a week, hoping to reduce the glut of lobsters in the market that has led to prices as low as anyone can remember for the past 30 years.
The great wonder of Maine lobster fishing is the diversity of its multiple thousands of owner operators, many of whom are from families that have gone lobstering for generations upon generations. Old ways die hard among them. Colorful is an adjective journalists use to describe grizzled individualists who don’t want anyone or anything to get between them and the next lobster pot buoy that is attached to a trap that holds the key to their economic security. So when a thousand or more of these icons of New England’s independent live-free-or-die spirit spontaneously tie up in protest about something, it attracts attention. Sometimes the wrong kind of attention.
More about that in a moment, but first, let’s crawl around in the barnacled-encrusted wire trap of a lobsterman’s worldview. In the minds of many—perhaps most—lobstermen, they work hard to catch lobsters that they hope will bring them $3 a pound or more on average during the spring, summer and fall seasons. They know the bottoms they fish like the back of their hand, as well as who is catching what and where, especially if their neighbors are catching more than them. They take risks every day that a freak storm will not end their season—or their lives—prematurely. At the end of the day, they sell their catch for the going price in the harbor which generally does not vary more than a nickel a pound no many how many buyers are on the docks or floats. So it is easy to see why lobstermen think the dealers are all in collusion with each other. After all, the dealers are on the telephone with each other all the time feeling out the market conditions.
But the buyers, or dealers as they are called, are a diverse lot, too. They range from the entrepreneurial guy with a refrigerated truck who buys lobsters for cash directly from fishermen on a public wharf and races them to some East Coast City where he might supply a few restaurants, to four or five very large dealer-distributors who have a lock on the largest wholesale seafood markets in the country. And everything in between. A lobsterman may not have ever heard of the economic concept of inelastic demand, but his experience has been that price has never been a constraint on consumers’ demand for Maine lobsters. Even as their catches doubled and tripled and quadrupled during the past 30 years, prices never decreased dramatically until three years ago.
But the dip in price in 2008 was true for the western world’s economy across the board, and could not be helped. But now a lobstermen looks at the shockingly low price he gets from his buyer at the wharf and knows that some consumer will pay three or four—or even 10 times as much for that lobster a day or two hence. So he believes he is being taken advantage of. His answer as to why there is a price problem all of a sudden is that some unethical group of dealers who control too much of the market must be getting together to keep the price low. So his solution is to tie up and refuse to sell unless the price goes back to between $2.50 and $3 per pound. Sounded like a good idea to thousands of lobstermen along the coast who tied up for all or most of last week.
The problem is that this is considered to be illegal by the United States Justice Department under the Sherman Anti Trust Act. Hard to believe that the Act passed by Congress and used by Teddy Roosevelt to brake up Standard Oil’s monopolistic grip on the oil market in the early 1900s could be used against lobstermen in 2012. But since the purpose of the Act is “to protect the consumers by preventing arrangements designed, or which tend, to advance the cost of goods to the consumer,” and since the effect of lobstermen meeting in groups large or small in order to get higher prices might tend to advance the cost of lobsters to consumers”¦ Well, you get the picture: to a Washington lawyer, a law preventing rich and poor from sleeping under bridges must be applied even handedly.
Which is why a big meeting of lobstermen called for last Sunday in Rockland was suddenly called off. People could go to jail.
But back to the root of the problem: too many soft shelled lobsters that cannot travel to far flung markets without dying in unacceptably large numbers thus, exceeding the demand in more local markets. Hence lower prices. This is a structural problem that the lobster industry has yet to face up to.
After a week of not hauling, lobstermen saw prices rebound on Monday to $2.50 per pound in Penobscot Bay. The thrill of victory! But then today the price dropped by a quarter as landings continue to surge. The agony of defeat.
Most don’t expect much to change anytime soon in this industry which is celebrated for its tradition-bound practices. At least until the pain of continuing business as usual exceeds the pain of restructuring thousands of independent businesses.
Philip Conkling is president and founder of the Island Institute based in Rockland, Maine.