July 3, 2019 — SEAFOOD NEWS — With a combined approach of effort limitation and rotating harvest areas, the Atlantic sea scallop (Placopecten magellanicus) is one of the most valuable fisheries in the United States, and is the most valuable wild scallop fishery in the world. It’s managed by the New England Fishery Management Council in cooperation with the Mid-Atlantic Fishery Management Council under the Atlantic Sea Scallop Fisheries Management Plan, which maximizes scallop yields while protecting beds of young scallops.
According to the NEFMC Council Report, Framework Adjustment 30 to the Atlantic Sea Scallop FMP, which contains catch specifications for the 2019 and 2020 (default) fishing years, has been approved by NMFS for implementation. The most likely scenario includes seven 18,000 lb. access area trips and 24 days-at-sea. These allocations are projected to result in landings of about 60 million pounds of scallops in FY 2019.
Scallop Trade
Scallop imports into the United States increased 12.4%, or 5.1 million pounds in 2018 compared to the previous year. However, this increase was largely due to the abundant volume rushed in from China in December 2018, ahead of the 25% tariff increase originally set for a January 1, 2019 implementation, which was later postponed. China continues to be the largest scallop supplier to the United States, accounting for about 46% of the 46.5 million pounds of scallops imported into the U.S. Shipping fewer scallops to the U.S. are Argentina (-13.6%) and Japan (-33%), while China (15.4%), Canada (5.5%), Mexico (2394.7%) and Peru (190.1%) have shipped more in 2018 than the previous year (Chart 1).
Export activity declined year-overyear. January to December exports totaled 14.1 million pounds, 14% fewer than the 16.4 million pounds shipped out in 2017. Canada remains our largest export destination, accounting for roughly 29% of annual exports; other significant destinations for U.S. production are the Netherlands, France, Belgium and the United Kingdom.
The Markets
More imports, larger landings, and a decline in exports, resulted in an increase in net supply. Our net supply calculation suggests an annual total of nearly 87 million pounds compared to 75 million in 2017; a 16% improvement (Chart 2).
The market for U.S. origin sea scallops fell as seasonally expected at the start of the new season, but strengthened throughout the end of the year amid little to no landings of larger domestic U/10 sized sea scallops. The market held somewhat of an unsettled undertone as varying inventory positions broadened the range of wholesale offerings available to customers. Those with thin inventories reported higher premiums, while those with more stable inventory holdings were able to offer a lower price. The average price paid for a domestic dry U10 in 2018 was $12.18, down 20% from the previous year average of $15.25/lb. Similarly, dry 10/20 count scallops decreased by 4.6%, averaging $10.30/lb. compared to $10.80 in 2017.
The market for Canada origin sea scallops saw premiums developing during 2018 Q4. Frozen inventory levels were not as abundant compared to previous years and one factor contributing to this were fewer exports from Japan into Canada. In 2018, while Japan harvested the same number of scallops as expected, the harvest was of a smaller size, attributing to about 25% less product available for export. Less exports paired with strong domestic demand in Japan was one of the factors attributing to the Canadian wholesale market strengthening at the end of their calendar year season.
The average price paid for a 10/20 count Canadian sea scallop in 2018 was $11.91/lb., down 12.8% from the previous average of $13.66/lb. in 2017.
Looking Forward
Conservation efforts have been strong resulting in productive years for fisherman. The outlook for this year is that with an increased net supply, prices could continue to fall, attracting a wider consumer base at the restaurant and retail levels this summer, once again. However, while landings thus far in the 2019 season have been abundant, the quality is being noted as “medium” with a higher than favorable percentage of splits and pieces. Will quantity outweigh quality and keep prices down? The coming months will tell…
This story was originally published on SeafoodNews.com, a subscription site. It is reprinted with permission.