NEW YORK — Seafood departments, always accustomed to volatile price swings, may be facing an unusual year in 2009, due primarily to lower demand from the restaurant industry.
According to a recent report by Packaged Facts, about 70% of seafood consumed in the U.S. is eaten in restaurants, and fine-dining and casual restaurants have been hit hard by the current recession. With fewer people eating out, supplies are up and prices are down for several species, including haddock and delicacies like lobster and swordfish.
“Prices on fresh seafood are as low as they've been in years,” wrote Mary Ellen Burris, senior vice president of consumer affairs for Rochester, N.Y.-based Wegmans, in a recent online column. “The reasons are varied, depending on the species, but boil down to supply and demand. The economic slowdown has decreased eating out in restaurants, country clubs, etc., and that means fewer orders, especially for shellfish. Live hard-shell lobster prices have dropped to their lowest level in years. Supply is up because the fishermen need to fish to have income; if they don't tend their traps, they have nothing to sell.”
Haddock, she noted, is priced at $3 per pound less than last year, due in large part to the financial crisis in Iceland, while dockside prices for lobster have decreased by as much as $4 per pound.
Shrimpers have also complained of falling prices due to lulls in demand, beginning this fall.
Overall, the Producer Price Index indicates that the cost of fish and shellfish is up 7.6% for the year, with fresh products up 6.2%, processed seafood up 9.4%, canned seafood up 14%, and frozen seafood prices up 6%, according to Fish Factor, a weekly syndicated column published by the Anchorage Daily News and other outlets.
However, Fish Factor writer and analyst Laine Welch last week predicted that prices still appear likely to fall for species including wild salmon and halibut, despite impending lower catch limits for halibut and production problems for Chilean farmed salmon.
“Wild salmon supplies will increase, especially for the lower-priced species, less so for the high-end products,” she wrote. “The big task for marketers will be to keep prices from sliding. Farmed salmon will be less available, due in great part to financial troubles and disease problems that continue to plague the Chilean industry. Production there could fall 25%-40% after the upcoming coho and steelhead harvests. This could mean reduced exports to the U.S. market, especially if buyers are unwilling to pay higher prices. Farmed Atlantic salmon from Norway and Canada will fill some of the void.”
In general, food price inflation is expected to slow significantly in 2009, led by substantial declines in prices for commodities and fuel, according to a report released last month by the U.S. Department of Agriculture.
Notably, USDA predicts that dairy prices could fall as much as 4% next year, while egg prices may fall 2%. The department still expects meat and poultry costs to rise 1.5% to 2.5%, and seafood prices to rise 3% to 4%, in line with broader food price inflation increases of 3.5% to 4.5%.