The Lobster Market: On a Roll

There were two National Lobster Days in 2015. On June 15 we celebrated but then the Senate (unanimously) proclaimed that September 25th was the day to honor the lobster.

With 2015 a very good year for the lobster, two days of celebration were appropriate.

Where are we going? To lobster demand and supply

Lobster Demand

Lobster demand is on the rise.

Domestic

Domestically, we have more lobster demand from restaurants and consumers. McDonald’s had a lobster roll that it temporarily offered in New England and Canada while you could have had some lobster with your burger at a Steak Shack in Boston or Connecticut. Food critics at Eater panned the McDonald’s lobster roll saying it had too much mayo, too much lettuce filler, no recognizable lobster taste.  Meanwhile for its Surf N’ Shack, Shake Shack has a dollop of lobster salad atop a burger on a bun.

From: eater.com

International

Lobster has become an aspirational food in China and also a good luck symbol because of its red color. With demand up, Maine is benefiting. Having previously depended on Australia, China switched when Maine’s lobster prices plunged in 2012 at the same time that the Australian catch decreased. Now though, perhaps because of the Chinese slowdown, lobster demand is not as strong as last year.

Destined for China, cargo planes typically transport live lobsters packed in newspapers and styrofoam coolers. You can see the increase.

Supply

Meanwhile on the supply side, the weather helped to buoy price. The source of 94 percent of the U.S. lobster supply, Maine’s fisheries had chillier water from an unusually cold winter. As a result, late molting lobsters diminished the harvest.

Our Bottom Line: Demand and Supply

Maine lobster price changes are a classic demand and supply story. With demand up and supply down, wholesale prices are the highest since 2007. This year they touched $4.00.

From: Portland Press Herald

Telling a similar story of less supply and more demand, the following graph has a new higher equilibrium price where the darker blue lines cross.

So, you can see why two National Lobster days are okay.