northern shrimp outlook 2018 - oregon trawl commission · 2018. 3. 16. · shrimp processing...

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Northern Shrimp Outlook 2018

John Sackton Seafood Datasearch

Oregon March 8, 2018

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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

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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

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Global Fishing Areas Pandalus

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Global borealis landings may have stabilized with increases in Greenland and Barents Sea

0

50000

100000

150000

200000

250000

300000

350000

2013 2014 2015 2016 2017 est 2018

Global Landings of Pandalus borealis May Have Stabilized

North Sea Barents Iceland Greenland W greenland East Skagerrak Canada Norwayest

Seafood Datasearch Estimates and ICWPF

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Picture is the same including P. jordani

0

50000

100000

150000

200000

250000

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350000

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2013 2014 2015 2016 2017 est 2018

Global Landings of Pandalus borealis Have Stabilized

North Sea Barents Iceland Greenland W greenland East Skagerrak Canada Norway West Coastest

Seafood Datasearch Estimates and ICWPF

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Dr. Carsten Hvingel

Head of Research Section

Benthic Resources and Processes

Institute of Marine Research, Norway

Northeast Atlantic Catches stabilizing; Western Atlantic Declines will continue

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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.

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10-15% Decline expected in Newfoundland area 6

• 2018 biomass 86 K tons; at 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.

NL area 6:

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Gulf will see big reduction of 35% to 40%

• Major reduction in Sept Iles and Anticosti

• Both areas land large size shrimp - 90-125 100-150

• Quebec also biggest seller of Canadian shrimp to US

Sept Iles Anticosti

Net result: higher prices for large size shrimp, less Canadian

shrimp to the US in 2018

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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

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Coast wide historical landings and yearly avg price

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Met

ric

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State Pink Shrimp Landings

Calif Ore Wash Calif Price Ore Price Wash Price

Pacfin Data

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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.

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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 open on age 0 and 1; smallest size shrimp

Forecast from annual

pink shrimp report

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

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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

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Cooked and peeled coldwater shrimp prices rose in 2nd 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.

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Icelandic Prices to UK Show Recovery but weakness on smallest size

$-

$0.50

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Iceland Double Fzn Price per Pound in UK £

100-200 250-350 500-800

100-200

250-350

500-800

Seafood Datasearch

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US Imported P. borealis pricing

Price spread has increased on larger sizes

This trend may be more pronounced in 2018

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Exports Declined along with landings

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2013 2014 2015 2016 2017

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Cooked and Peeled Shrimp Exports

Canada China Denmark Netherlands Sweden Other Europe Other Asia Other

Seafood Datasearch: US Customs, West Coast Ports

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Exports of head-on fzn continue

0

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2,000,000

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4,000,000

5,000,000

6,000,000

7,000,000

2013 2014 2015 2016 2017

Shell on Exports

Denmark China Iceland Japan Other Europe Other

Seafood Datasearch: US Customs, West Coast Ports

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Total Exports compared to landings (shell on wgt)

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

2013 2014 2015 2016 2017

po

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Exports as Percent of Live Landings

pounds Total exports

Seafood Datasearch

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US has been the most consistent Market for Canada

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

UK US DK Other Europe Asia

Kil

ogr

ams

Canadian Exports C&P by Country

2014 2,015 2016 2017

Seafood Datasearch, Intracen

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Total Canadian Exports Declining

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2014 2,015 2016 2017

Total Exports Declining as Landings Fall

UK US DK Other Europe Asia

Seafood Datasearch, Intracen

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Canadian Exports by State

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2014 2015 2016 2017

po

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Canadian Exports by State

Massachusetts California Florida Maine

Virginia Michigan Others

Most CA exports from Quebec; Reduction in Gulf will

have impact in 2018 Seafood Datasearch, Intracen

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Ex- Vessel Prices declined in 2017

$0.00

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2009 2010 2011 2012 2013 2014 2015 2016 2017

Pacfin Report on Shrimp Prices by State

C O W

Pacfin data

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Oregon Price and Volume by Month

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April May June July August September October November

Po

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Oregon Pounds Oregon Price

Pacfin data

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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 2nd 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.

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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.

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Recruitment outlook is moderate

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

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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

end of 2017. If age 1 shrimp become

the target of the fishery earlier,

count issues could arise”

131 per lb

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

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Prices reflect both mkt demand and size

2015 had both strong

market demand and the

second largest average

size shrimp in the past 9

years.

2015

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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.

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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.

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Foodservice sales of all shrimp grew

Seafood Datasearch: NFI Global Seafood Market Conf

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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%

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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

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One factor was a shift from crab to shrimp at retail

Seafood Datasearch: NFI Global Seafood Market Conf

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Overall US imports grew to a record level

Seafood Datasearch: US customs

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Global warm water shrimp producton will continue growing

Seafood Datasearch: NFI Global Seafood Market Conf

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West Coast Shrimp equaled 1/3 volume of Gulf shrimp in 2017

West coast shrimp landings: 33.36 million pounds Seafood Datasearch

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Shrimp price volatility at a record low

This makes it very difficult for shrimp importers

to make money

Seafood Datasearch and Urner Barry Publications

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Margins are Squeezed for Headless shrimp

Sales costs are closer to replacement costs

Difference is shrinking

Seafood Datasearch and Urner Barry Publications

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Cooked and Peeled show same pattern

This is the same chart but for cooked and peeled shrimp

Margins are lowering here also

Seafood Datasearch and Urner Barry Publications

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Restaurant sentiment has been improving

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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.

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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

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Thank you

• Time for Questions