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

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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
• utlooks 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

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 Norway

est

Seafood Datasearch Estimates and ICWPF

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Picture is the same including P. jordani

50000 100000 150000 200000 250000 300000 350000 400000 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 Coast

est

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

$- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Metric tons

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

• pen 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 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00

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

1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 2013 2014 2015 2016 2017

Pounds

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

1,000,000 2,000,000 3,000,000 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)

50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 2013 2014 2015 2016 2017

pounds

Exports as Percent of Live Landings

pounds Total exports

Seafood Datasearch

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US has been the most consistent Market for Canada

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

Kilograms

Canadian Exports C&P by Country

2014 2,015 2016 2017

Seafood Datasearch, Intracen

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Total Canadian Exports Declining

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

500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 2014 2015 2016 2017

pounds

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 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 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

$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 April May June July August September October November

Pounds

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
• verall 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

• ne 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
• utlooks 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