OUTLOOK FOR JOHN SACKTON DUNGENESS CRAB NEWPORT, OR NOV 2, 2017 IN 2018
13 TH PRE-SEASON DUNGENESS CRAB PRESENTATION • Crab, shrimp and lobster market analyst since 1997 • Preseason price and market outlooks on shrimp and crab for 20 years – Atlantic Canada, Alaska, and US West Coast • Publisher of SeafoodNews.com News • First Dungeness Presentation: 2005
DUNGENESS CLUSTER PRICES VS. SNOW CRAB
SHELLFISH Shellfish Price Volatility Continues to be High Snow crab Lobster meat • Erratic Price Scallops Movements depress Lobster tail 4 oz purchases • Shellfish has had very high price volatility in Farmed Shrimp recent years • Currently lobster meat and snow crab exhibiting over 50% price increases.
SNOW CRAB PRICES HAVE NEVER TRADED AT THIS LEVEL: $8.00 PER LB 25 year Price History for Snow Crab $8.50 $7.50 $6.50 $5.50 2017 $4.50 $3.50 $2.50 $1.50
RETAIL CRAB PROMOTIONS 2 YEARS Retail Crab Promotions Dungeness Snow Crab King Crab Other 35000 30000 25000 20000 Stores 15000 10000 5000 0 O N D J F M A M J A S O N D J F M A M J A S O
DUNGENESS CRAB INCREASED PROMOTIONS IN 2017 25000 20000 15000 Stores 10000 5000 0 O N D J F M A M J A S O N D J F M A M J A S O Dungeness Snow Crab King Crab Other Linear (Dungeness) Linear (Snow Crab) Linear (King Crab)
WHOLE COOKS VS CLUSTERS AT RETAIL 3500 3000 2500 2000 Stores 1500 1000 500 0 O N D J F M A M J A S O N D J F M A M J A S O
RETAIL SEAFOOD MOST TYPES OF SEAFOOD HAD LESS VOLUME 2016 2017 PRICES AT RETAIL ROSE 900000 800000 700000 600000 500000 Stores 400000 300000 200000 100000 0
RETAIL SUMMARY • Dungeness Crab is Well Positioned as a Successful Retail item for 2017-18 • Pricing is favorable compared to snow crab • Snow crab prices not likely to decrease until well after Dungeness Season • Red King Crab Prices are coming down. • Current backwards relationship between snow crab and Dungeness prices is likely to correct • Whole Cooks will be major retail item. • Domoic Acid Could have Impact to push more product to clusters/sections.
MACRO FACTORS FOR US • US economy continues to expand • Foodservice Traffic has declined for 6 Straight Months; with restaurant sentiment weaker than in 2016. Foodservice was main driver of strong seafood demand in 2017. • Retailers have cut back promotions of items like salmon and crab due to high prices • Hurricanes, Fires, and other disruptions of all have the potential to destabilize consumer spending, and lead to lower demand. • Percent of Americans who feel the country is on the wrong track has gone up significantly. This can bleed into consumer confidence and spending patterns
RESTAURANTS IN US ‘FACING WORST PERIOD SINCE 2009’ SAYS MILLER PULSE • Storms Hurt Restaurant sales by 40 basis points in Aug, Sept. • But even without storm impact same-store sales remain historically low, declining for 13 of the past 16 months. year over year declining traffic • “the restaurant industry faces its worst period since 2009.”
SNOW CRAB USAGE IS BEING CUT BACK IN US GULF CASINOS CUT BACK RED LOBSTER DE-EMPHASIZES SNOW CRAB
DUNGENESS ALSO HAS FOODSERVICE OPPORTUNITY IN 2018 • As shown by Red Lobster, Foodservice is willing to shift to Dungeness due to better pricing and availability. • This is mostly for clusters. • Dungeness is now a very competitive substitute for Casual Dining, Buffets, and Casinos. • This is in addition to the traditional West Coast Foodservice Demand, where many restaurants must keep Dungeness crab on the menu.
WILD CARDS FOR 2018 • Economists Beginning to Worry about Recession in US as Fed is Tightening, But Many Signs of Weakness Abound. • Trump: His instability has had remarkably little economic impact so far. That could change with the coming year if he escalates trade disputes that have potential for significant disruption with China or NAFTA for example.
EXPORT MARKETS ALSO IMPORTANT FOR DUNGENESS • Live Exports to China have become a significant factor expanding demand for Dungeness • This year there were several short-lived disruptions by Chinese authorities in response to Domoic acid and other issues like Cadmium. • Ecommerce continues to drive Chinese Seafood Import Demand.
US LIVE EXPORTS TO CHINA 1,200,000 $10.00 2015 2016 2017 $/lb $/lb $/lb $9.00 1,000,000 $8.00 $7.00 800,000 Per LB. Customs Price $6.00 Pounds 600,000 $5.00 $4.00 400,000 $3.00 $2.00 200,000 $1.00 0 $0.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
LIVE EXPORTS TO CANADA 4,000,000 $12.00 3,500,000 $10.00 3,000,000 $8.00 2,500,000 Prce per Lb Pounds 2,000,000 $6.00 1,500,000 $4.00 1,000,000 $2.00 500,000 0 $0.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 2016 2017 $/lb $/lb $/lb
BC LIVE EXPORTS TO CHINA, US Canada Live Exports BC has not published updated export 8,000,000 statistics for Live Crab, but it remains a major gateway for live shipment to China. 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2014 2015 2016 United States of America China (Incl HK etc)
ECOMMERCE IS DRIVING PROCUREMENT IN CHINA First live Lobster and Crab Sales focused • on hotels and banquets in China • Competition and Lower Prices brought lobsters and crabs to many mass restaurants. Ecommerce popularized imported • seafood like Dungeness, Lobster and King Crab. • Alibaba’s Hema Fresh Stores are revolutionizing merchandising Hema: All Commerce on Smart Phone: Order, Delivery, Pick-up or In store shopping Alibaba uses Customer data to determine locations and what to carry
BANNER YEAR FOR CRAB FISHERY IN 2017 • West Coast Landings Totaled 58 million pounds through July. • Oregon saw record landed value as good volume combined with high prices • California value in 2017 increased by about 33% over 2016. • Washington landed 17.1 million pounds but with lower overall value than in 2016
DUNGENESS SHOULD BE IN FAVORABLE POSITION 22 IN 2018 • Other crab products at record prices last year • Wholesale Prices were near record levels two years ago due to supply cutbacks but section prices have since declined • Red King Crab is now correcting from high prices • Snow Crab is still at record highs, but prospects are for lower volumes in 2018 • Dungeness has stable pricing by contrast, so can take advantage of market demand.
DUNGENESS ISSUES FOR 2017-2018 • Will Season Open on Time? • Will volume be similar or above last year • Lately there have been Domoic Acid Issues in California • Inventory situation is good. With favorable pricing, no signs of excess inventory • Both retail and foodservice likely to expand use of Dungeness in 2018 if supply is there • China continues to be a very strong market
DUNGENESS SECTIONS AND WHOLE COOKS HAVE STABILIZED IN PRICE Snow crab +50% Lobster meat +60% Other Products Have Come Down from their Highest Prices Dungy whole cooked + 30% Dungeness section prices have declined over 2 seasons Snow Crab May be vulnerable Dungy sections + 20% to a future price correction
SNOW CRAB IS NOT IMMUNE TO A FUTURE MARKET CORRECTION Lobster meat Other Products Have Come Down from their Highest Prices 21-25 shrimp Crab meat However no relief from short Snow crab Supply of snow crab is in Sight. Russia is selling most of it snow crab to Japan.
26 000's pounds 10000 12000 14000 2000 4000 6000 8000 0 Dec-12 OREGON DUNGENESS LANDINGS Jan Feb-13 Apr-13 Jun-13 Aug-13 Oregon Dungeness Landings and Price Oct-13 dec Dec-13 Feb-14 Apr-14 Jun-14 dec Aug-14 Landings Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Ex Vessel Price Aug-15 Oct-15 Dec-15 Jan Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Jan Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00
10000 15000 20000 25000 30000 35000 5000 0 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Monthly Dungeness Landings By State Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Alaska California Oregon Washington
CALIFORNIA NOV DUNGENESS LANDINGS RETURN TO NORMAL 28 California November and Season Dungeness Landings Calif november Calif Main Season 20000 18000 16000 14000 12000 000' lbs 10000 8000 6000 4000 2000 0 2012 2013 2014 2015 2016
COAST WIDE NOV-DEC -JAN LANDINGS Nov-Dec-Jan Landings of Dungeness 29 CA OR WA 45000 40000 35000 30000 000's Pounds 25000 20000 15000 10000 5000 0 2013-14 2014-15 2015-16 2016-17
NOV-JAN COMPARED TO ENTIRE SEASON Coast Wide Landing Months 70000 60000 50000 000's pounds 40000 30000 20000 10000 0 2013-14 2014-15 2015-16 2016-17 Nov-Jan Rest of Season
OREGON PRICE AND VOLUME 2017 Oregon Dungeness Landings and Price 2017 31 Oregon Oregon Price 14,000,000 $6.00 $5.55 $5.06 $4.97 12,000,000 $5.00 $4.74 $4.48 $4.33 10,000,000 $4.00 update $4.00 $3.65 8,000,000 POUNDS $3.00 $2.95 $2.89 $3.00 6,000,000 $1.86 $2.00 4,000,000 $1.00 2,000,000 0 $0.00 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Source: ODFW
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