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Maine's Surging Lobster Haul Shifts Focus to Processing
08/06/2013   Reported By: Jay Field

Decades ago, Maine never had to worry about its limited lobster processing capacity. The catch here was smaller back then and the market revolved around selling live lobsters. But in recent years, Maine's lobster haul has surged to well over a hundred million pounds, and that's shifted the focus to processing. Lobsters caught off the Maine coast have a softer shell than the ones Canada hauls in, making them more perishable and better suited for value added use by restaurants, retailers and other buyers. So as much as 70 percent of Maine's catch now goes to more than two dozen plants in Canada for processing. But as Jay Field reports, Maine is moving to increase its processing capacity - motivated, in part, by protests last summer across the border.

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Maine's Surging Lobster Haul Shifts Focus to Proce
Originally Aired: 8/6/2013 5:30 PM

The 2012 lobster season was one of those freakish examples where all the planets align for the worst possible outcome. Unseasonably warm water in the Gulf of Maine threw off the molting schedule for the lobster fishery. Millions of pounds of shedders flooded the market earlier than expected. The excess supply cratered the boat prices paid to Maine lobstermen. Dealers moved product to Canada as fast as they could, at rock bottom prices.

But when, all that cheap lobster started showing up at processing plants along the Acadian coast in New Brunswick, the local fishermen weren't too happy.

Audio from video: "I'm bending the shell! It's garbage! It's garbage!"

In this video, shot by the CBC last August, Canadian lobstermen dump out crates of soft-shell lobsters arriving on trucks from Maine. The fishermen, angry that the cheap Maine imports were driving down their prices, blocked the gates of three processing plants. The protests triggered serious soul searching in Maine among industry leaders, policymakers and top elected officials.

"I would like to be completely self-sufficient in processing the lobster caught off the coast of Maine within the next three years." Gov. Paul LePage laid out this ambitious goal late last week at the Maine Lobster Festival in Rockland. Four new processing plants have come on line in recent months. And Pat Keliher, who heads the state's Marine Resources Department, says the state is working to attract more facilities in the coming years.

"We continually have conversations with people who are interested in processing in Maine. They're exploring the concepts of whether they want to do it in Maine," he says. "I mean, Shucks is moving from Richmond to Portland to be closer to a larger number of people."

"This is the machine we call the big mothashucka!," says John Hathaway, CEO of Shucks Maine Lobster. Hathaway watches as workers load two crates of live lobsters into what looks like a tall, cylindrical basket. A heavy chain then lowers it into a narrow tank of water.

"It's just pure water and the pressure can go up to almost 100,000 PSI, which is probably about six times the pressure of the deepest point of the ocean," he says. "The pressure, alone, kills the lobster in about six seconds."

Shucks has been processing lobster for a little over seven years at its plant in Richmond. The company has been growing little by little each year. It now process 25,000 to 30,000 pounds of lobster a day, and ships it's tail, claw and knuckle meat, shucked or in the shell, to markets across the country.

Shucks just got approval to open a second plant next spring on the Maine State Pier in Portland. The Richmond site will remain open. Hathaway says the company will hire as many as 80 part- and full-time workers at the new plant, when it opens next spring.

"I think it's important for the state of Maine and people in the industry to create the value and to create the jobs here in Maine," he says.

Hathaway says the current business model in Maine's lobster industry is flawed, and the state's limited processing capacity is a big part of the problem.

"We sell the world's greatest food product in the highest product volume, at the lowest possible price, to Canadian processors, who are heavily subsidized," he says, "so that the Canadians can add value to it, then turn around and sell it back to us as product of Canada, even though it has Maine lobster inside the package."

But Canadian officials dispute the contention that government subsidies are giving the country an unfair processing advantage over Maine. Rick Doucet is the former fisheries minister in New Brunswick.

"I've heard that notion many times: lobster industry subsidized," he says. "Not that I know of. I haven't heard of that. I don't understand how there's subsidizing that's taking place."

At the very least, Canada's universal health care system means the country's more than two dozen processors don't have to pay workers heath insurance costs. The high cost of coverage is just one of the challenges Maine will face, as it tries to meet the governor's goal of processing all lobster in-state within three years.

Fourteen plants are currently operating in the state right now. Four of them are new, including a 100,000-square-foot facility in what was once the nation's last sardine cannery, in Prospect Harbor. But entering the market in Maine, and doing well enough to stay, are challenging endeavors.

"I don't think there's any easy place to get a processing facility up and running. It's a complicated difficult business," says Bob Bayer, who runs the Lobster Institute at the University of Maine at Orono. "You've got all kinds of agencies to get permits from. And you've got all kinds of agencies watching over you to make sure you're doing it properly and safely. The capital is huge. It's energy intensive as well."

And any processed seafood, of course, is highly perishable. The state hopes, over time, it will be able to convince would-be entrepreneurs to shoulder this and all the other risks that come with opening new plants. The long term health of the industry may depend, in part, on whether it succeeds.

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