Northern Shrimp Outlook 2018 John Sackton Seafood Datasearch - PowerPoint PPT Presentation

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

Background • 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 2

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

Global Fishing Areas Pandalus 4

Global borealis landings may have stabilized with increases in Greenland and Barents Sea Global Landings of Pandalus borealis May Have Stabilized 350000 300000 250000 200000 150000 100000 50000 0 2013 2014 2015 2016 2017 est 2018 est North Sea Barents Iceland Greenland W greenland East Skagerrak Canada Norway Seafood Datasearch Estimates and ICWPF 5

Picture is the same including P. jordani Global Landings of Pandalus borealis Have Stabilized 400000 350000 300000 250000 200000 150000 100000 50000 0 2013 2014 2015 2016 2017 est 2018 est North Sea Barents Iceland Greenland W greenland East Skagerrak Canada Norway West Coast Seafood Datasearch Estimates and ICWPF 6

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

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

10-15% Decline expected in Newfoundland area 6 • 2018 biomass 86 K tons; at NL area 6: 10% exploitation quota would be 8600 tons vs 11625 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

Gulf will see big reduction of 35% to 40% • Major reduction in Sept Iles Anticosti Sept Iles and Anticosti • Both areas land large size shrimp - 90-125 100-150 • Quebec also biggest seller of Canadian shrimp to US Net result: higher prices for large size shrimp, less Canadian shrimp to the US in 2018 10

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

Coast wide historical landings and yearly avg price State Pink Shrimp Landings Calif Ore Wash Calif Price Ore Price Wash Price 50,000 $0.80 45,000 $0.70 40,000 $0.60 35,000 $0.50 30,000 Metric tons 25,000 $0.40 20,000 $0.30 15,000 $0.20 10,000 $0.10 5,000 0 $- 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Pacfin Data 12

Prior declines in landings have not been reversed after 1-2 yrs Groth, S., M. Blume, K. Lawrence, J. Smith, and C. Good. 2018. 29th Annual Pink Shrimp Review. 13

For 2018 volume could be similar to 2017; Size is questionable • 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 Forecast from annual open on age 0 and 1; smallest pink shrimp report size shrimp Groth, S., M. Blume, K. Lawrence, J. Smith, and C. Good. 2018. 29th Annual Pink Shrimp Review. 14

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

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

Icelandic Prices to UK Show Recovery but weakness on smallest size Iceland Double Fzn Price per Pound in UK £ 100-200 250-350 500-800 $5.00 $4.50 100-200 $4.00 250-350 $3.50 $3.00 500-800 $2.50 $2.00 $1.50 $1.00 $0.50 $- Seafood Datasearch 17

US Imported P. borealis pricing Price spread has increased on larger sizes This trend may be more pronounced in 2018 18

Exports Declined along with landings Cooked and Peeled Shrimp Exports 9,000,000 8,000,000 7,000,000 6,000,000 Pounds 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2013 2014 2015 2016 2017 Canada China Denmark Netherlands Sweden Other Europe Other Asia Other Seafood Datasearch: US Customs, West Coast Ports 19

Exports of head-on fzn continue Shell on Exports 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2013 2014 2015 2016 2017 Denmark China Iceland Japan Other Europe Other Seafood Datasearch: US Customs, West Coast Ports 20

Total Exports compared to landings (shell on wgt) Exports as Percent of Live Landings 250,000,000 200,000,000 150,000,000 pounds 100,000,000 50,000,000 0 2013 2014 2015 2016 2017 pounds Total exports Seafood Datasearch 21

US has been the most consistent Market for Canada Canadian Exports C&P by Country 3,500,000 3,000,000 2,500,000 Kilograms 2,000,000 1,500,000 1,000,000 500,000 0 UK US DK Other Europe Asia 2014 2,015 2016 2017 Seafood Datasearch, Intracen 22

Total Canadian Exports Declining Total Exports Declining as Landings Fall 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2014 2,015 2016 2017 UK US DK Other Europe Asia Seafood Datasearch, Intracen 23

Canadian Exports by State Canadian Exports by State Massachusetts California Florida Maine Virginia Michigan Others 3,000,000 2,500,000 2,000,000 pounds 1,500,000 1,000,000 500,000 0 2014 2015 2016 2017 Most CA exports from Quebec; Reduction in Gulf will have impact in 2018 Seafood Datasearch, Intracen 24

Ex- Vessel Prices declined in 2017 Pacfin Report on Shrimp Prices by State $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 C O W Pacfin data 25

Oregon Price and Volume by Month 8,000,000 $0.90 $0.80 7,000,000 $0.70 6,000,000 $0.60 5,000,000 $0.50 Pounds 4,000,000 $0.40 3,000,000 $0.30 2,000,000 $0.20 1,000,000 $0.10 0 $0.00 April May June July August September October November Oregon Pounds Oregon Price Pacfin data 26

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

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

Recruitment outlook is moderate Groth, S., M. Blume, K. Lawrence, J. Smith, and C. Good. 2018. 29th Annual Pink Shrimp Review. 29

Count 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 131 per lb end of 2017. 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. 2018. 29th Annual Pink Shrimp Review. 30

Prices reflect both mkt demand and size 2015 had both strong 2015 market demand and the second largest average size shrimp in the past 9 years. 31

Summary • 2018 will see a wider gap in value between 250-350 count shrimp and smaller 300-500 and 500-800 shrimp. • Any changes in market pricing from 2017 are more likely to occur on larger sizes: 125-175, 150-250 and 250-350. • Any strategy to maximize the size of shrimp harvested will return the most value. 32

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

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

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 2016. • Coldwater share of foodservice shrimp could be as small as 0.4% 35