Still in recovery from Hurricane Irma and facing a trade war on live lobster exports to China, Florida Keys lobster fishermen are still optimistic about the eight-month commercial season, which opened Aug. 6.
Simply put, the Chinese like live spiny lobster, and they’re willing to pay for it, said Bill Kelly, executive director of the Florida Keys Commercial Fisherman’s Association. That’s especially true as Asian holidays approach. How much they’re willing to buy and what they’re willing to pay this season are the unknowns, especially with higher tariffs now on live lobster exports to China.
Tom Hill, co-owner of Key Largo Fisheries, didn’t seem too concerned on opening day. About 15 to 20 commercial fishermen bring in lobster for him to sell through Key Largo Fisheries.
“I sell a fair amount to China, and will my price be affected by the tariff? Yeah. It’s going to be a challenge this year as far as finding different places to sell, but even if the price is lower, it may open up other doors in other places,” he said. “We can sell domestically or more to Europe and in that direction.”
He said the market price per pound will change in the coming days and weeks depending on supply and demand, like any other good.
“It’s too soon for anyone to say ‘This is the price.’ My Chinese customers, they don’t even know what to offer us because they don’t know what the market is going to be,” Hill said.
Gary Graves, vice president of Keys Fisheries in Marathon, agreed.
“We’ve been doing this for years,” he said of lobster sales from the Middle Keys fishery. “I sell all over the world — Japan, Korea, Australia, Singapore, Taiwan, France… the tariffs will have an effect, but China will buy. It’s just a matter of what the price is.”
For the past two seasons, the average retail price has been between $9.50 and $10.50 a pound, Kelly said. For a wholesaler to break even, it would have to be sold at $6 to $7 per pound, because the cost of operation for boat crewmen, fuel, ice, bait and so forth is about $1,000 a day.
U.S. lobster exports to China
Retail price: $10/lb
Existing tax: 17 percent
New tax: additional 25 percent
Cost to Chinese importer before new tariff: $11.70/lb.
Cost to Chinese importer with new tariff: $14.20/lb.
“The highest retail price we’ve ever seen it sold for was $20.50 a pound to China,” Kelly said.
On a positive note, the lobster that weren’t harvested last season after Hurricane Irma have had a year to grow. They hauled carapace to deeper waters after the storm, Kelly said. This year, Keys commercial lobster fishermen will harvest between 5.9 million and 7.2 million pounds of spiny lobster, and on the recreational side about 2 million pounds, he said.
“Last year, we left about 40 percent of that 5.9 to 7.2 million pounds unharvested, displaced in lost traps. We probably have another 2.5 million pounds of lobster that didn’t go anywhere,” he said. “The ones who got a new lease on life because of Irma are bigger and smarter. Every indication is that we’re going to have a banner season, barring any storms or hurricanes.”
Hill said he told his fishermen, prior to opening day of commercial season, it doesn’t matter what the price is “as long as there is plenty for us to catch and for everyone to enjoy.”
In July, the U.S. imposed $34 billion in tariffs on a variety of Chinese products, including flat-screen TVs, medical devices and aircraft parts.
The goods marked for tariffs now face a 25 percent border tax when they’re brought into the U.S., paid by the importers. The importers may raise the price of the goods to recoup the tax, which could make American consumers buy those products elsewhere.
In return, China is imposing $34 billion in tariffs on 545 U.S. goods, including lobster, corn, soybeans, pork and poultry. The additional tax on American goods to get them into China is 25 percent.
“There already was a Chinese tariff of 17 percent on live lobster,” said Bill Kelly, executive director of the Florida Keys Commercial Fisherman’s Association, adding the tariff brings the tax up to a whopping 42 percent.