He runs Northern Wind in New Bedford, Mass., contracting with 74 fishing vessels and employing 125 people. In business 33 years, the company sells about 15 million pounds of scallops and about 6 million pounds of ahi tuna a year.
In the absence of sales, Melanson is running 150,000 pounds of sea scallops a day through individual tunnel freezers, banking them for when the pandemic is over. But cash flow is getting tight. And he worries that when regular life resumes, a glut of scallops will mean tanking prices.
“We could obviously tell our suppliers we would prefer if you don’t fish for the next 30 days,” Melanson said. “But I’m very concerned and nervous about the 28- and 29-year employees and the crews we’ve built up to produce these quantities. They all live paycheck to paycheck.”
The novel coronavirus pandemic has destroyed demand for seafood across a complicated U.S. supply chain, from luxury items such as lobster and crab, generally consumed at restaurants, to grocery staples sourced from the world’s fish farms.
Now, with restaurants closed, many of the nation’s fisheries — across geography, species, gear types and management — have reported sales slumps as high as 95 percent.
Boats from Honolulu to Buzzards Bay, Mass., are tied up dockside, with fisheries in the Atlantic, the Pacific, the Gulf of Mexico and Alaska affected, throwing thousands of fishermen out of work and devastating coastal communities.
And those in the fishing industry say that their portion of the $2 trillion relief package for American businesses and workers does not adequately account for losses incurred by the $100 billion U.S. seafood industry. The rescue package allots $300 million for operators experiencing losses greater than 35 percent, including subsistence, commercial and charter fisheries, as well as fish farms.
“We’re 80 percent off of where we need to be to break even,” said Peter Ramsden, who runs Foley Fish, a fourth-generation seafood company also based in New Bedford.
He sells the stuff that seldom makes it to grocery stores, splurge items for restaurants, fancy hotels, resorts and country clubs: Ora King salmon from New Zealand, Dover sole from Spain, fresh Nova Scotia halibut and 20 kinds of oysters.
“We will survive, we own our own buildings, although my retirement is starting to look different,” Ramsden said. “But fishermen have always been right on the knife’s edge.”
They have faced challenges before — natural disasters, too many fish, not enough. This is different.
Americans spend more than twice as much on seafood in restaurants as they do at home. And as restaurants across the country have closed or have turned exclusively to takeout and delivery, a major source of seafood sales has been erased.
U.S. consumers spent an estimated $102.2 billion for fishery products in 2017. Of that total, about $70 billion was spent at restaurants and other food service establishments, and about $33 billion was grocery and retail sales for home consumption. (The National Oceanic and Atmospheric Administration’s 2018 figures did not break down total sales by food service and grocery.)
Lobster, the highest-value fishery — $684 million in 2018, according to NOAA — has tanked, with wholesale prices falling from $8 to $10 a pound down to $2, according to Keith Decker, chief executive of Blue Harvest, a fishing company in New Bedford.
Sales of crabs — the second-highest-value seafood, with a landing value of $645 million in 2018 — have dropped precipitously, and flounder went from $4 wholesale to 50 cents. There is almost no demand for tuna or oysters.
“There’s a profound impact on the processors but more particularly to the individual fishermen,” Decker said. “They are going to be struggling to make ends meet, make payments on their boats, pay their crews.”
Gavin Gibbons, vice president of communications for the National Fisheries Institute, a trade organization, says that sales of seafood for restaurants are down more than 90 percent and that the effects reach far beyond commercial fishermen to processors, distributors, food service and retailers.
“The men and women working at sea and those farming fish start this complex system, and helping them is important,” Gibbons said. “It is essential that the entire value chain be helped. It does no good to catch fish if it just sits on the dock.”
For many segments of the food industry, restaurant sales losses have been partially offset by huge surges in grocery sales. This is not the case for seafood, partly because of consumer tastes but also because many grocery stores have streamlined their meat and seafood offerings.
James Mullin, vice president of sales for Atlantic Capes Fisheries, based in Cape May, N.J., said that grocery stores have closed their counters for fresh meat and seafood. They have reduced all meat and seafood sales to prepackaged items that do not require selecting, cutting, weighing, wrapping and being handed to a customer over the counter.
He says grocery stores that might offer 20 to 30 fresh seafood items under normal circumstances are cutting that to maybe 10. Stores have reduced their offerings to the most commonly consumed seafood, such as farmed salmon, farmed tilapia, a cod item and shrimp, Mullin said, in an effort to streamline restocking and minimize delivery frequency.
“We read in the newspaper about retail business booming,” Mullin said, “and there’s some truth to that — there was a spike in demand. But as awareness of the economic situation dawns on people, sales for high-priced seafood items is weak. We’re seeing the trending go to hot dogs.”
As consumers stockpile and hoard out of fears about supply-chain disruption, there have been steep increases in sales of some animal proteins: Fresh turkey sales are up 126 percent since March 1, fresh pork is up 101 percent, beef is up 95 percent, and chicken is up 70 percent, according to IRI, which compiles grocery data.
Robert Vanasse, executive director of Saving Seafood, an industry group, said that those industries are disproportionately benefiting under the Cares Act.
“While $300 million is a large amount of money, when you consider the number of commercial fishermen and employees in fishery-related businesses, it will not go far enough,” Vanasse said. “And it does not compare to the $9.5 billion allocated for livestock, specialty crops and other parts of the food system.”
Without more aid, Vanasse said, the downturn could drive thousands of commercial fishers, many of them third- or fourth-generation operations, into bankruptcy and adversely affect coastal communities around the country. New Bedford, the top American port by seafood value, brought in $431 million in seafood in 2018.
The pandemic is another major blow to the seafood industry after the trade wars, which cut into U.S. sales to China and other countries, especially for high-value items such as lobster, crab, scallops and wild Alaska salmon.
In 2018, there was a $12 billion trade relief package for farmers, followed in 2019 by a $16 billion aid package expanded to some specialty crops such as cranberries and almonds in addition to row crops, dairy and pork. The seafood industry was excluded from those two trade relief packages.
The Cares Act provides an additional $14 billion for row crops, pork and dairy and some specialty crops affected by the trade wars, but not for seafood.
Gibbons, of the National Fisheries Institute, said a number of fisheries have been affected by Trump’s trade wars.
“The Maine [lobster] folks are a great example,” Gibbons said, citing a dramatic decrease in the crustacean’s sales to China. “They’ve been taking it on the chin.”
In Honolulu, the country’s sixth-highest-value port, more than 100 of the port’s 140 long-line vessels are tied up, with three or four more coming in each day, said Eric Kingma, executive director of the Hawaii Longline Association. These boats catch premium fish such as bigeye and yellowfin tuna, as well as swordfish and mahi mahi, most of it sold fresh to the restaurant industry. Kingma said fishing trips for these boats cost $45,000 each “before you leave the dock, just to break even.”
“Our daily value dropped by 80 percent, and trip costs exceeded the landed value,” he said. “We’ve tried to shift demand into local retail consumers.”
But local consumers are not looking to buy expensive fresh fish now that Hawaii’s tourism industry is cratering.
“It’s a complete disaster,” Kingma said, “a disaster that many vessels will not recover from.”
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