Northern Shrimp Outlook John Sackton Seafood Datasearch Oregon March 8, 2018

Transcription

1 Northern Shrimp Outlook 2018 John Sackton Seafood Datasearch Oregon March 8,

2 40 Years in Seafood Industry Crab, shrimp and lobster market analyst since 1997 Preseason price and market outlooks on shrimp, crab, lobster US West Coast, Atlantic Canada, Alaska Price arbitrator for Alaska crab Shrimp Analyst for NFI Co-Founder of NFI s Global Seafood Market Conference Publisher of Seafood.com News Background 2

3 Long term supply outlook Global supply of pandalus on long term decline However year to year changes are variable Market concern is what is available today West coast shrimp governed by different factors Recruitment variable in short term Long term outlook for ocean regime shifts 3

4 Global Fishing Areas Pandalus 4

5 Global borealis landings may have stabilized with increases in Greenland and Barents Sea Global Landings of Pandalus borealis May Have Stabilized est 2018 est North Sea Barents Iceland Greenland W greenland East Skagerrak Canada Norway Seafood Datasearch Estimates and ICWPF 5

6 Picture is the same including P. jordani Global Landings of Pandalus borealis Have Stabilized est 2018 est North Sea Barents Iceland Greenland W greenland East Skagerrak Canada Norway West Coast Seafood Datasearch Estimates and ICWPF 6

7 Northeast Atlantic Catches stabilizing; Western Atlantic Declines will continue Dr. Carsten Hvingel Head of Research Section Benthic Resources and Processes Institute of Marine Research, Norway 7

8 Volume in Canada and on US West Coast have most impact on Oregon Shrimp Canadian exports to US are mostly larger size shrimp. Prices of larger shrimp are likely to be higher this year due to cuts in the Gulf of St. Lawrence. Volume of US landings is still not known. 8

9 10-15% Decline expected in Newfoundland area 6 NL area 6: 2018 biomass 86 K tons; at 10% exploitation quota would be 8600 tons vs tons in 2017 Quota is not set, most expect 10-15% decline. Area 5 is mostly stable, mostly offshore shrimp Some industrial offshore production flowing to NL shrimp processing plants. 9

10 Gulf will see big reduction of 35% to 40% Sept Iles Anticosti Major reduction in Sept Iles and Anticosti Both areas land large size shrimp Quebec also biggest seller of Canadian shrimp to US Net result: higher prices for large size shrimp, less Canadian shrimp to the US in

11 West Coast and Oregon Supply West coast in low supply cycle Size trend may (??) be more favorable in 2018 Lower volumes mean less exports, more domestic shrimp market share going to US customers 11

12 Metric tons Coast wide historical landings and yearly avg price State Pink Shrimp Landings Calif Ore Wash Calif Price Ore Price Wash Price 50,000 $ ,000 40,000 35,000 30,000 $0.70 $0.60 $ ,000 $ ,000 15,000 10,000 5,000 $0.30 $0.20 $ $- Pacfin Data 12

13 Prior declines in landings have not been reversed after 1-2 yrs Groth, S., M. Blume, K. Lawrence, J. Smith, and C. Good th Annual Pink Shrimp Review. 13

14 For 2018 volume could be similar to 2017; Size is questionable Forecast from annual pink shrimp report Shrimp report says survival of multiple year classes is moderate, suggesting a fishery on mixed ages and larger overall size. But the Fall Survey failed to confirm this, so fishery might open on age 0 and 1; smallest size shrimp Groth, S., M. Blume, K. Lawrence, J. Smith, and C. Good th Annual Pink Shrimp Review. 14

15 Summary Global landings stable for 2018 West Coast Landings likely similar or slightly improved from last year. Changes may occur in size distribution Less large size Pandalus from Canada Possible (??) improved size on US West Coast 15

16 Cooked and peeled coldwater shrimp prices rose in 2 nd half of 2017 Lowest pricing for the year was last spring, just prior to the 2017 season. Prices recovered from mid-year. But spread between smallest and largest size increased substantially. 16

17 Icelandic Prices to UK Show Recovery but weakness on smallest size $5.00 Iceland Double Fzn Price per Pound in UK $4.50 $4.00 $ $3.00 $ $2.00 $1.50 $1.00 $0.50 $- Seafood Datasearch 17

18 US Imported P. borealis pricing Price spread has increased on larger sizes This trend may be more pronounced in

19 Pounds Exports Declined along with landings 9,000,000 Cooked and Peeled Shrimp Exports 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Canada China Denmark Netherlands Sweden Other Europe Other Asia Other Seafood Datasearch: US Customs, West Coast Ports 19

20 Exports of head-on fzn continue 7,000,000 Shell on Exports 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Denmark China Iceland Japan Other Europe Other Seafood Datasearch: US Customs, West Coast Ports 20

21 pounds Total Exports compared to landings (shell on wgt) 250,000,000 Exports as Percent of Live Landings 200,000, ,000, ,000,000 50,000, pounds Total exports Seafood Datasearch 21

22 Kilograms US has been the most consistent Market for Canada 3,500,000 Canadian Exports C&P by Country 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 UK US DK Other Europe Asia , Seafood Datasearch, Intracen 22

23 Total Canadian Exports Declining 6,000,000 Total Exports Declining as Landings Fall 5,000,000 4,000,000 3,000,000 2,000,000 1,000, , UK US DK Other Europe Asia Seafood Datasearch, Intracen 23

24 pounds Canadian Exports by State 3,000,000 Canadian Exports by State Massachusetts California Florida Maine Virginia Michigan Others 2,500,000 2,000,000 1,500,000 1,000, , Most CA exports from Quebec; Reduction in Gulf will have impact in Seafood Datasearch, Intracen

25 Ex- Vessel Prices declined in 2017 $0.80 Pacfin Report on Shrimp Prices by State $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $ Pacfin data C O W 25

26 Pounds Oregon Price and Volume by Month 8,000,000 $0.90 7,000,000 $0.80 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 1,000,000 $ April May June July August September October November $0.00 Oregon Pounds Oregon Price Pacfin data 26

27 Size is important component of average price In 2017, market prices were lowest just at the time the new Oregon season was opening. Prices recovered in the 2 nd half of the year The smallest size shrimp had the greatest price weakness, and the slowest recovery For 2018 size will be the critical factor in determining value, as no significant market changes are expected. 27

28 Macro Factors for Coldwater Shrimp Export markets will be less important for US producers More expensive Canadian shrimp will provide market opportunity for domestic shrimp. Size will still be a factor. Some users (especially of Canadian Shrimp) may drop sizes that are too expensive. 28

29 Recruitment outlook is moderate Groth, S., M. Blume, K. Lawrence, J. Smith, and C. Good th Annual Pink Shrimp Review. 29

30 Count per lb. 131 per lb we do expect count issues could arise early on in the season, depending on fishing effort. Age 2 and 3 volumes are not expected to be on par with recent years based on the low catch rates at the end of If age 1 shrimp become the target of the fishery earlier, count issues could arise Groth, S., M. Blume, K. Lawrence, J. Smith, and C. Good th Annual Pink Shrimp Review. 30

31 Prices reflect both mkt demand and size had both strong market demand and the second largest average size shrimp in the past 9 years. 31

32 Summary 2018 will see a wider gap in value between count shrimp and smaller and shrimp. Any changes in market pricing from 2017 are more likely to occur on larger sizes: , and Any strategy to maximize the size of shrimp harvested will return the most value. 32

33 US Market for Shrimp was very healthy in 2017 The overall US market for shrimp was very healthy in Shrimp continues to be one of the best values among seafood products saw record US imports of shrimp; consumption likely near record as well. Coldwater shrimp benefits from the overall buoyancy of this market. 33

34 Foodservice sales of all shrimp grew Seafood Datasearch: NFI Global Seafood Market Conf 34

35 Sales of Coldwater Shrimp Fell Industry reports suggest Foodservice volume fell around 9%; likely due to lower harvest. At the same time, prices rose over Coldwater share of foodservice shrimp could be as small as 0.4% 35

36 Retail sales of warm water shrimp increased Household penetration measures how many households make at least one grocery purchase of the product in a year. Rising household penetration indicates higher sales. Seafood Datasearch: NFI Global Seafood Market Conf 36

37 One factor was a shift from crab to shrimp at retail Seafood Datasearch: NFI Global Seafood Market Conf 37

38 Overall US imports grew to a record level Seafood Datasearch: US customs 38

39 Global warm water shrimp producton will continue growing Seafood Datasearch: NFI Global Seafood Market Conf 39

40 West Coast Shrimp equaled 1/3 volume of Gulf shrimp in 2017 West coast shrimp landings: million pounds Seafood Datasearch 40

41 Shrimp price volatility at a record low This makes it very difficult for shrimp importers to make money Seafood Datasearch and Urner Barry Publications 41

42 Margins are Squeezed for Headless shrimp Sales costs are closer to replacement costs Difference is shrinking Seafood Datasearch and Urner Barry Publications 42

43 Cooked and Peeled show same This is the same chart but for cooked and peeled shrimp pattern Margins are lowering here also Seafood Datasearch and Urner Barry Publications 43

44 Restaurant sentiment has been improving 44

45 Something will change in warm water shrimp market The volatility and margin charts show that something will have to change. Either overseas prices can decrease Or US prices can go up. But when this might happen, or what direction it might go, is unknown. My own feeling is that further growth in global supply will bring down prices. 45

46 Conclusions Stability appears to be the watch word for 2018 in shrimp. Both coldwater and warmwater shrimp outlooks do not show anything pushing for significant change. Challenge for 2018 will be to increase the value of coldwater shrimp within their category. Two advantages are domestic production and an expected fall off in Canadian imports 46

47 Thank you Time for Questions 47