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Panel sides with union on summer shrimp prices for Newfoundland and Labrador fishers

Workers process shrimp at a fish plant on Fogo Island. CONTRIBUTED PHOTO
Workers process shrimp at a fish plant on Fogo Island. - Contributed

The decision has been made on shrimp prices for Newfoundland and Labrador fish harvesters for the 2020 season.

Today, July 2, the Standing Fish Price Setting Panel announced it had accepted the Fish Food and Allied Workers (FFAW-Unifor) submission on $1.18 per pound for cold water shrimp.

The Association of Seafood Producers (ASP) had suggested a price of 70 cents per pound, a 57 percent reduction from the minimum prices paid in the summer of 2019.

Both sides made their arguments during arbitration hearings to the panel last Thursday, June 24.

In its final report on the matter, the pricing panel summarized the arguments of both sides.

The panel said the ASP claimed that 2019 was a difficult year for shrimp processors’ viability and  . . . "most of the 2020 shrimp will be caught during the summer when yields are low, and the product will be marketed in an already depressed market that is further compromised by the COVID-19 pandemic.”

The ASP also told the panel there is still unsold shrimp in the market from 2019.

The FFAW offer of $1.18 per pound is a 28.5 percent reduction from last summer’s prices.

In its submission to the Price Setting Panel, the FFAW said it agreed the 2020 markets are down significantly and impacted by COVID-19.

“However, they feel the COVID situation is improving, particularly in the U.K. where the economy is due to open in the coming weeks,” the panel noted. “They also contend that the amount of inventory carried over from 2019 is relatively small at 10 to 15 percent of 2019 production and will be cleared in the next couple of months.”

The FFAW also argued that, in the case of other species like crab, “the impact of the pandemic has lessened as time passes and the same can be expected for shrimp.”

To make its decision the Fish Price Setting Panel also used market reports from Gemba Seafood International, as well as data on landings and export value provided by the Department of Fisheries and Oceans (DFO).

The Gemba report noted that shrimp markets are stable but have bottomed out at very low levels. The report also noted the overall worldwide catch of shrimp in 2020 will be below 2019 levels, with decreased landings from Norway and Russia.

The Gemba report also stated, “COVID-19 has had an impact on both the supply and demand side of Shrimp, however, in different ways in the different European countries.”

Under the legislation that governs the process, the Fish Price Setting Panel can choose only one of the offers. They cannot suggest a middle-ground price.

After assessing the information on shrimp, the panel decided the ASP had overreached by seeking a 57.6 percent reduction in harvesters’ prices.

“At the same time, the Panel recognizes that the FFAW offer will likely put considerable pressure on the viability of shrimp processors in 2020, particularly if bonus payments continue to be in play in the competitive port market environment. However, bonus payments are at the discretion of processors.”

Therefore, effective midnight July 2, the average price for shrimp for NL harvesters will be $1.18/pound for shrimp landed at the plant, and $1.15/pound for trucked shrimp.

The panel report also noted, “. . .  the situation this year is unpredictable and will be available to the parties to reconsider its decision should factors change and alter the market trajectory as currently forecasted.”

The full report from the panel is available here: 

http:// https://www.gov.nl.ca/fishpanel/pricingdecisions/2020/Summer_Shrimp_Decision_July_2.pdf

Derek Butler, executive director for ASP, in an email to SaltWire, said, “I guess it is fair to say we are disappointed in the decision, but that is the nature of arbitration. We knew the risks.”

Butler added, “As the Panel said in selecting the FFAW price position, ‘The Panel recognizes that the FFAW offer will likely put considerable pressure on the viability of shrimp processors in 2020.’

Butler concluded his email by saying, “Individual operators have some big decisions to make. We are still at least a couple of weeks away from a fishery at this point.”

Related stories

https://www.saltwire.com/business/regional-business/decision-on-2020-shrimp-prices-for-nl-fishers-goes-to-arbitration-466850/

https://www.saltwire.com/business/local-business/atlantic-canada-inshore-shrimp-fishers-send-sos-to-ottawa-455621/

https://www.saltwire.com/business/regional-business/possible-quota-reduction-on-northern-shrimp-concerns-newfoundland-fishers-and-communities-426330/

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