Thinking Outside the Box- The Crab Price Dilemma

Barry Darby, February 5, 2025

I’d like to offer some comments on the recent news of the joint press conference by the ASP and the FFAW. Besides asking DFO to open the crab season two weeks early this year, both organizations are acknowledging that the threat of US tariffs creates significant challenges around developing a price-setting formula and setting wharf prices. The tariffs pose a risk that the harvest and processing might be severely disrupted, with serious impacts on all involved.

I have been studying and observing this price-setting problem for decades and I would like to suggest a potential solution. This is an extremely unusual year and we need to think “outside the box” to deal with it, at least for this season.

The goal must be to ensure that harvesting and processing will in fact occur, and that all participants will be working.

My suggestion is this:

Harvesters and processors would agree that for the 2025 season:

1. No fixed crab price should be set. Instead, a competitive market – i.e. competition among buyers/processors – would determine the price a harvester would receive in a given case. 

2. Processors would individually choose what price they would offer the harvester.

3. Harvesters would agree to go fishing. They would choose which buyer(s) they would sell their catch to.

4. Processors would guarantee their own employees a minimum of 40 hours per week for the duration of the season, provided, of course, that there is a supply. 

(There would be “i”s to be dotted and “t”s to be crossed for any actual agreement.)  

Both parties would be taking on a shared risk for the future. The harvesters  would risk perhaps receiving lower prices for their catch, and the processors would risk possible downward price trends in the markets they sell to. But the alternative would be much more risky for everyone – disruption of the harvest, lack of work for all involved, and potential loss of markets as a result of the uncertainty.

With this plan, the harvest would happen, providing work in both harvesting and processing, and there would be a continuation of dependable supply for the markets. Prices might even improve at some point.

Some observations:

Since the US tariff will be 25% of the wholesale price of crab as it crosses the border, the tariff-related percentage increase in the retail price to the American consumer will be significantly less than 25%.

Economists have suggested that the application of the tariffs will result in the weakening of the Canadian dollar. A change in the exchange rate from $1.34 Cdn for $1 US (2024) to $1.54 Cdn for $1 US (as projected under tariffs), would result in a 12 – 14 % increase in the dollar value that a Canadian processor would receive from a sale to the US. This would mitigate the damage of the 25% tariff by about half.

The above plan could be the basis for dealing with the looming threat of US tariffs, and the overall uncertainty of the present situation. It would offer a realistic way of ensuring that the harvesting, processing and marketing of crab will proceed with minimal disruption. I hope that the Union and the ASP will consider it, at least for the 2025 season.