Alaska King and Snow Crab Updates
Supplies of king crab and snow crab have fallen in recent years, resulting in historically high prices despite a deep recession in the United States. King crab supplies declined by 58 percent from 2007 to 2010 and will decline further in 2011. Wholesale prices jumped in reaction to the news of a lower TAC for Alaska's biggest king crab fishery.
Snow crab production declined 18 percent in 2010 from the prior year. Global snow crab production will essentially be flat in 2011. Larger TACs in place for the upcoming Alaska snow crab fishery could increase global production in 2012 if fisheries in Canada and Russia do not suffer shortfalls. Snow crab prices have risen substantially given two years of below-average supply.
The U.S. dollar has weakened versus the Japanese yen but strengthened versus the Canadian dollar and Russian ruble, since last January. This is generally good for Alaskan producers, as it increases the purchasing power of foreign buyers. Even if prices remain the same from the foreign buyer's perspective, a weaker dollar means Alaskan firms realize higher prices in dollar terms.
Alaska King Crab
The 2011/2012 Bristol Bay red king crab fishery kicked off October 15th and ran through January 15, 2012. Virtually all the king crab harvested is shipped out of Alaska prior to the new year.
King crab TACs are down 28 percent this season, and down 47 percent in the Bristol Bay red king crab fishery, versus last year. St. Matthew blue king crab TACs increased in 2011. Although a biomass of blue king crab exists to support a fishery these crab are more difficult and more expensive to catch than red king crab. The Aleutian Islands golden fishery opened August 15th, fishermen will be allowed to harvest 6 million pounds of golden crab in that fishery.
Less supply coming out of Russia and declining Alaska TACs have resulted in high prices throughout the value chain. Fishermen received an average of $7.30/lb for Alaskan red king crab in 2010, and industry sources report ex-vessel prices topped $10/lb in 2011.
Supplies of king crab into the U.S. and Japan declined by 64 percent from 2006 to 2010. Alaska and Russia are the world's primary king crab producers, and relatively little product is sold to markets outside of Japan or the United States. The dramatic decline in supply is partly due to declining TACs in the Bristol Bay red king crab fishery, but is mainly due to a decline of illegal, unregulated, and undocumented (IUU) harvest activity coming out of Russia.
IUU crab fishing was common in the mid-2000s in Russia; in fact, the volume of crab exported out of Russia in some years exceeded the entire legal Russian crab harvest several times over. Russian officials have worked to detain and prosecute IUU harvest in recent years with the issue garnering attention from Vladimir Putin himself. Prices have risen as supply has declined.
Snow Crab and Tanner Crab
The Bering Sea opilio (snow) crab fishery opens October 15th and runs through May 15th, but most crab will be harvested in January or February. The mature biomass of Alaska snow crab is 1.1 billion pounds and this year's TAC has been set at 88.89 million pounds. In addition to snow crab, the Alaska Peninsula and Kodiak bairdi crab fisheries can harvest up to 3.27 million pounds (combined). Bairdi crab and opilio crab are very similar in appearance, as both species are members of the Chionoecetes genus. However, bairdi crab (also referred to as tanner crab) are typically larger.
The Bering Sea snow crab fishery TAC is up 64 percent this year, which will bring much needed to supply to an undersupplied crab market. Total imports of snow crab in to the U.S. and Japan, the world's major importers of snow crab, are running slightly behind last year (through November).
Snow crab prices are at historically high levels, as shown by the chart. Higher crab prices have led to a decline in crab sales at U.S. retail stores, compared to the prior year. However, buying activity for Alaska's 2011/12 season is expected to be brisk due to a strong Japanese yen and two straight years of low supply. In addition, buying pressure may be increased as some buyers may look to substitute snow crab for more expensive king crab in market segments where consumers would accept such a trade-off.