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Preliminary Report HERRING REVIEW and MARKET OUTLOOK, 1978

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Preliminary Report HERRING REVIEW and MARKET OUTLOOK, 1978 Preliminary report .LIBRARY I BIEUOTHf~QUE A ,,,. FISHERIES AN1J OCEANS f JPECHES ET OCEANS OTTAWA, ON'fAJUO, CANADA KIA OE6 : "~: :.,.·~":~ ~;:... ~:;~ HERRING REVIEW AND MARKET OUTLOOK, 1978 Prepared b,y The Marketing Servtces Branch, Fisheries and Martne Service, Department of Fishertes and the Environment. June 1978 TABLE OF CONTENTS Page Summary . • . • . • . • • . • . • . • . • . • • . • • . • . 1 Landings . • . • . • 2 Catch Outlook.................................. 2 Landed Value . 3· Landed Value Forecast ......................... 4 Exports . 4 Exports of Round Fresh Herring ................• 7 Exports of Round Frozen Herring ................ 7 Exports of Frozen Herring Fillets . 8 Exports of Smoked Herring ...................... 8 Exports of Vinegar-Cured Herring ............... 8 Exports of Pickled Herring ......•.............. 9 Exports of Canned Herring ...................... 10 Exports of Herring Roe, Meal and Oil ........... 10 Possible Export Control of Round Frozen Herring ..... 11 APPENDIX ONE: Th~ French Herring Market ............ 13 APP~NDIX TWO: The Icelandic Herring Fishery ........ 15 APPENDIX THREE: The West German Herring Market ..... 18 List of Stati~ttcal Tables Table l Canadian Herring Catch 2 Canadian Herring Landings - Average Price Received by Fishermen · · 3 Exports of Canadian Herring Products 4 Export Value of Canadian Herring Products 5 Exports of Round Herring 6 Exports of Frozen Herring Fillets, by Country 7 Exports of Smoked Herring, by Country 8 Exports of Salted and Vinegar-Cured Herring, by Country g Exports of Pickled Herring, by Country 10 Exports of Canned Herring, by Country 11 Exports of Herring Roe, Meal and Oil, by Country HERRING REVIEW AND MARKET OUTLOOK, 197slf Summary The Canadian herring industry has undergone phenomenal growth during the past few years. It has achieved a substantial increase in earnings at both the fishing and processing/exporting levels. Between 1975 and 1977 the average price paid to herring fishermen increased by 82 percent, from $89.76 to $163.12 per ton. During the same period, the average Canadian export price for herring products increased from $709.00 to $1,082.00, that is by 53 percent. These substantial price increases have been achieved mainly as a consequence of the buoyancy of the frozen herring markets. However, because of consumer resistance to record high prices and the increasing availability of herring substitutes, importers in Western Europe have cfi.anged their attitude in recent weeks. They are inclined either to withhold purchases or snow willingness to buy only at reduced prices. The top price of 70 cents per pound for No. l frozen butterfly herring fillets has declined to 66 cents. Currently offers of 64-65 cents are considered and some expect the price to drop as low as 62 cents during the seasonal availability of fresh herring. Frozen whole herring prices are also likely to decline. With the current price of $167.00 per short ton ($184.12 per metric ton) paid to fishermen, Canadian producers of frozen butterfly fillets should be able to maintain profitable operation even if their se1ltng price declines by 10-12 percent. However, according to some estimates, the price may decline by 20 percent. The current price of $167.00 will likely cause some serious difficulties to the producers of cured herring unless a price increase of 20-25 percent can be obtained in the market-p1ace. 1i Unless otherwise stated, all tonnage in this report refers to metric tons. - 2 - With the expected continuing shortfall in herring supplies around the world in the foreseeable future, the Canadian herring industry has a good opportunity to strengthen its position in major world markets. Attention should be given, however, to the increasing consumer resistance to high herring prices, to the increasing utilization of herring-like fishes as substitutes and to the signs of herring stock recovery in Icelandic waters. These point to the need of realistic prici~g, improving product quality and new product and market development. It has been suggested that some form of export control on round frozen herring for food purposes should be established in order to increase further processing in Canada. ,-Jhis _question. is currentlv .hP.in~ 1oq_ked ~at by-th~ Market-Ing-Services Branch.---~~ -- . · -1:.andings According to preliminary 1977 figures, between 1975 and 1977 the total Canadian herring catch was in the neighbourhood of 300,000 tons. During these years the Atlantic coast catch decreased from 242,000 tons to 219,000 tons. The British Columbia catch on the other hand, expanded from 60,000 tons in 1975 to 97,000 tons in 1977. This expansion took place in both segments of the West coast herring fishery: the roe herring catch increased from 53,000 tons to 73,000 tons and the food and bait catch from 6,000 tons to 24,000 tons. Catch Outlook The following table shows the estimated Canadian herring catch to 1985: - 3 - Canadian Herring Catch .Forecastll (thousand metric tons) 21 31 31 31 % 1977 1978 1980 1985 increase 1985/1977 Atlantic Coast 219 250 270 275 26 West Coas.t 97 98 108 200-220 106-116 Total 316 348 378 475-495 50-56 . '~ •... - Landed.Value The landed value of Canadian herring for all forms of utilization, increased from $90.00 per ton in 1975 to $163.00 in 1977, a rise of 82 percent. The most pronounced improvement at 114 percent took place in New Brunswick, followed by 107 percent in Nova Scotia, 79 percent in Quebec and 40 percent in Newfoundland. P.E.I., the smallest herring producing province, achieved a volume increase of only 5 percent between 1975 and 1977. Its average landed price per ton, however, was the highest on the East Coast at $160.00 in 1975 and $169.00· .. in 1977. British Columbia fishermen obtained an average price of $334.00 per ton in 1977, 50 percent higher than in 1975. I~ 1978 the price received by the Bay of Fundy herring fishermen reached a boat-side value of $167.00 pe.r short ton ($184.12 per metric tons) which was three times the price obtained in 1975. 1/ Future landings were estimated by the Resource Services Directorate. 7!/ Ac tu a 1 figures. 3/ Estimated figures. - 4 - Landed Value Forecast Since market prices ultimately have an impact on raw material prices, future Canadian landed prices will partly be influenced by consumer resistance and the use of substitute species in export markets. It is difficult to assess the duration of consumer resistance to high prices. It is known, however, that consumer resistance to high prices for certain fish species in the United States market lasted for only sllort periods. In Germany today herring-like fishes are labelled: Pilchard-herring or Sardinellop•herring. It has been reported that, despite a 20 percent price advantage, herring-like fishes are not an unqualified success on the German market. There are different opinions aoout their degree of acceptability as substitute for herring. It is known that there have been some consumer complaints about using the misleading word 11 herring 11 in labelling. Exports Canadian exports of herring products have increased from 106,680 metric tons (product weight) in 1975 to 171,818 tons in 1977, an increase of 61 percent. The increase in export value was 152 percent: from $74 million in 1975 to $186 million in 1977. The following table indicates the percentage increases or decreases in export volumes and values of various Canadian herring products between 1975 and 1977. - 5 - Percentage Change in Canadian Herring Exports ,Ji By Product Fann, Between 1975 and 1977 % % Product Fann Volume Value Round Fresh 62 247 Round Frozen 110 145 Fi 11 ets Frozen 198 358 Kippers 105 145 Boneless Smoked 37 57 Bloaters 20 14 Whole or Dressed Vinegar Cured 166 273 Fillets Vinegar Cured 47 78 Whole or Dressed Pickled 4 14 Split Pickled 69 90 Fi 11 ets Pickled - 5 - 8 Kipper Snacks - Canned - 4 - 4 Canned N.E.S. - 20 - 10 Sardines - 32 .;. 13 Herring Roe 157 259 Herring Oi 1 81 77 Herring Meal - 24 28 ~ lf For volume and value figures, see Tables 3 and 4. - 6 - The changes in the average 1975 and 1977 export prices are set out in the table below. It will be noted that only three product categories bloaters, pickled fillets and herring oil - were exported at a lower average price in 1977 than in 1975. Average Export Price of Herring, B~ Product Fann, 1975 and 1977 (dollar per metric tonJ Percentage Change 1975 1977 1977/1975 Round Fresh 99.70 213.10 113 Round Frozen 539 .10 628.55 17 Frozen Fi 11 ets 513.35 788.24 54 Kippers 1 '179. 49 1 ,406.25 19 Boneless Smoked 1 ,609. 14 l,840.74 14 Bloaters 973.90 921 • 15 - 6 Whole or Dressed Vinegar Cured 489 .92 686.88 40 Fillets Vinegar Cured 621.24 749 .58 21 Whole or Dressed Pickled 464.69 510.57 lO Split Pickled 650.26 732.77 13 Fi 11 ets Pickled 651.66 630.19 - 3 Kippered Snacks 2,018.67 2,606.47 29 Canned N.E.S. 1,409.47 1,585.40 12 Sardines l,605.60 2,048.69 28 Herring Roe 5,086.80 7'124. 84 40 Herring Oil 359.53 350.63 .... 2 Herring Mea 1 262 .12 441.73 69 All Products 708. 80 1 ,082.00 53 - 7 - Exports of Roand Fresh Herring Due to the over-the-side sales to Poland, Canadian exports of round fresh herring increased from 25,000 tons in 1975 to 40,000 tons in 1977 · :_If1J_s __ w_as_refJJi_cte<Lio_~_n_inc:r~~s_e_j o exRort __earni ng~='fr_0111__ lZ_._5_m111; on to $8.6 million. The United States continued to be our major market for _fresh_her_ring \iith~~-vo1ume-of over 21,000 tOns--1n 19/7.- -Within the- span of ' - - -- ------ -- -~-~ ~---- - ·- -· three years, total _fresh be_rrinq exports~ from the }Jest_coast expanded from 400 tons to over 11 ,000 tons.
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