Race for Dungeness influences processing, markets

Steven C. Hackett Christopher M. Dewees Matthew J. Krachey 

recent decades the has experiencedIN a race for , or derby, where approximately 80% to 90% of an- nual seasonal landings occur between late November and the end of Decem- ber. Some processors have responded by developing large-scale processing and freezing capacity that can accommodate the pulse of crab landings and be used for processing other fish species at other times of the year. The combination of large-scale processing and declines in the groundfish and has About half of the Dungeness crab catch is sold fresh or live, while the rest is frozen or pro- cessed into picked meat. This crab has two red tags; cooperating commercial fishermen return resulted in a more consolidated process- the tags so that researchers can estimate crab movements and collect other data. ing structure that features a small number of large processing firms. Prices. If fresh and live product are serve as key market channels for picked Baseline economic information was perceived by consumers as possessing meat. The importance of maintaining these collected on this processing sector in superior quality to that of the frozen picked-meat market channels is indicated California for two Dungeness crab fish- product (much of the picked meat origi- by trends in the estimated share of total ing seasons, 1999-2000 and 2000-2001 nates from the secondary processing of statewide Dungeness crab landings going (Hackett et al. 2003). Our research meth- previously frozen crab), then presum- into the picked-meat product. The percent- odology involved the use of confiden- ably this would be manifested in higher age of crab processed into a picked-meat tial fish-ticket data from the California prices per pound for the fresh and live product generally increased in 2001, when Department of Fish and Game, and product, especially if the pulse of land- landings had decreased, indicating the im- interviews with key informants at six ings suppresses this product. In fact, portance of protecting market channels for processing firms. These firms, located our analysis suggests that this was not picked meat. in California and southern , pur- the case — the frozen and picked meat Employment. Hackett et al. (2003) were chased 60% of the crab landed in Cali- featured higher yield-adjusted prices only able to get sufficient information on fornia in 1999-2000. We found that: per pound than those of fresh and live employment and capital stock in Dunge- • The estimated average wholesale product. Our estimates indicate that only ness crab processing from surveys to develop price of various Dungeness crab about one-half of the Dungeness crab industry-wide estimates for the 2000-2001 products (adjusted for yield rates landed in California was processed into season. Estimated total peak crab-processing from the live crab) in 1999-2000 was fresh or live product during the 1999- employment in 2000-2001 ranged between approximately $3 per pound. 2000 and 2000-2001 seasons. 485 and 552 people during the weeks when • The estimated value added by pro- Value of picked meat. The superior the pulse of Dungeness crab landings is being cessors ranged from $8.45 million to yield-adjusted price for picked-meat processed. In contrast, off-peak “year-round” $8.83 million. Value added by proces- product could be explained by the no- industry-wide employment (mostly picking sors is measured as processed-crab tion that many final consumers (such as lines) was estimated to range between 88 sales revenue less the cost of crab pur- diners at restaurants and on cruise ships) and 142 people. chased from fishermen, whereas value value convenience over freshness, since Luxury/special occasion food. Most of added by fishermen is measured as picking meat from a Dungeness crab is the processors surveyed consider Dunge- revenue received by fishermen for sell- a somewhat laborious task. In fact, our ness crab to be a seasonal or a luxury food ing crab to processors. estimates for percentage value added associated with celebratory events, with • The estimated value added by proces- in 1999-2000 are consistent with the peak consumption of fresh crab occurring sors ranged from 47.5% to nearly 50% picked-meat product having the highest between Thanksgiving and New Years Day. of that added by crab fishermen. yield-adjusted value in the marketplace Processors noted difficulty in moving fresh • The value added by fresh and live prod- (though this was somewhat less evident crab after late January (Super Bowl weekend). ucts (based on yield-adjusted prices ex- in the 2000-2001 estimates). Processors Because fresh or live crab is difficult for con- pressed as a percentage of the ex-vessel in our interviews noted the importance sumers to locate after late January, it is impos- value) was generally less than that of the of maintaining restaurant, cruise ship sible to judge whether consumer demand frozen and picked-meat products. and other food-service accounts that would increase if it were available for longer.

190 CALIFORNIA AGRICULTURE, VOLUME 58, NUMBER 4 There is certainly substantial demand TABLE 5. Opinions* of survey respondents on crab management tools, by vessel size category for the live product during the holi- Vessel size day season when it is available. Frozen product. Small Medium Large The large proces- Management tools < 30 ft. 30 to 50 ft. > 50 ft. sors mentioned that target inventory Current management system 4.3 4.1 3.9 levels for frozen crab are usually set One trap-limit for all size vessels† 4.1§ 4.3§ 2.8 prior to the season based on existing Daylight-only fishing† 4.5§ 3.8§ 2.6 inventory and projected consumer Transferable trap certificates 2.8 2.6 2.6 Nontransferable trap certificates 2.3 2.9 2.5 demand. Processors base their de- Trip limits‡ 3.1 2.7§ 2.1 mand estimates on overall economic Different trap limits for different-size vessels 3.1 2.3 3.0 indicators (economic growth, con- One trap-haul per day 2.9 2.7 2.2 sumer confidence) and the price and Regional/area/zonal management† 3.3§# 2.7§ 1.7 Transferable IFQs** 1.9 2.0 2.3 availability of substitutes. Key substi- Nontransferable IFQs 2.2 1.7 1.7 tutes were reported to be Dungeness Community quotas† 2.2§ 1.7§ 1.1 crab products out of , Graduated trap limits 1.8 1.7 1.3 Oregon and British Columbia; snow * Scale: 5 = strongly favorable, 4 = favorable, 3 = neutral, 2 = unfavorable, 1 = strongly unfavorable. crab products; and more generally, † Vessel size categories significant, Kruskal-Wallis test, P = 0.01. ‡ Vessel size categories significant, Kruskal-Wallis test, P = 0.05. other and meat products. § Significantly different from large vessels, Kolmogorov-Smirnov test,P = 0.01. As the season begins and it becomes ¶ Significantly different from large vessels, Kolmogorov-Smirnov test,P = 0.05. clear that target inventory levels will # Significantly different from medium vessels, Kolmogorov-Smirnov test,P = 0.05. be reached, production shifts to in- ** Individual fishing quotas. clude fresh and live product. Proces- sors noted that fresh product is easier There is widespread approval California’s outcome could be similar. to unload quickly. In years with low among fishermen of the current crab- One alternative approach would be to landings, large processors focus most management regulations based on tra- scale trap limits to vessel length. How- of their production on frozen prod- ditional fishery management tools with ever, the fleet did not rank this option ucts, leaving more of the fresh and seasons. However, when additional favorably (table 4). California should live market to smaller processors. regulations are considered that affect also examine the early outcomes from New markets. The processors in- fishing operations, opinions become trap-limit systems recently implemented terviewed reported considerable dif- highly polarized or negative. in Washington state. Inside Puget ficulty in moving large quantities of Trap limits. The great increase in the Sound, trap limits are set at 100 per ves- fresh crab product outside of the re- number of traps fished and the acceler- sel and there are six harvest regions. gion due to the cyclical nature of the ating pace of the fishery has led to years Along the Pacific Coast there are trap fishery. In years with large landings, of discussion about whether to limit the tiers ranging from 350 to 500 traps per the industry is able to develop new number of traps each vessel may fish. vessel based on catch history (personal markets, such as East Coast restau- On Sept. 23, Governor Schwarzenegger communication, L. Veneroso, Shellfish rants. These processors report high vetoed a bill that would have established Policy Leader, Washington Dept. of Fish product satisfaction in these new a limit of 250 traps per vessel south of and Wildlife). markets. But when years with small Point Arena, on an experimental basis. If the industry wants to significantly landings come along, processors re- Our study showed that the majority of reduce the total amount of gear in the port that rising ex-vessel prices put the fleet, with the exception of the large water, additional measures that “ratchet upward pressure on fresh product vessel owners, viewed trap limits favor- down” the trap limit may be necessary. prices, and out-of-region markets are ably. Many of those survey respondents Some form of trap certificates, similar to more price-sensitive than those with- who oppose trap limits stated that they those implemented in the Georgia blue in the region due to reduced product viewed it as a reallocation of crab to crab and Florida spiny fisheries identity. Processors claim that this smaller operators. They saw this as a re- (CFAC 1997; Larken and Milon 2000) price sensitivity effectively eliminates striction of their business that was unjus- might eventually need to be considered. fresh Dungeness crab products from tified in terms of resource conservation. Such a system would involve setting a being regular restaurant menu items We anticipate that trap limits would total number of traps to be used by the outside of the region. at best cap the total number of traps fleet and issuing certificates (one per near current levels and prevent large trap) to be placed on each trap by fisher- increases in fishing effort. After imple- men. The number of certificates could mentation of trap limits in Maine’s be reduced each year until the desired David G. Hankin and Kristen Sortais lobster fishery, the total number of traps fleet-wide total is reached. Certificate contributed helpful review of this sidebar. fished increased (Acheson 2001). While transferability and geographic specific- Reference the relatively few lobstermen above ity could also be included. Hackett SC, Krachey MJ, Dewees CM, et the trap limit reduced their operations, Some form of trap limits is the alter- al. 2003. An economic overview of Dunge- many of those under the limit increased native management tool most likely to ness crab (Cancer magister) processing in their trap numbers toward the limit. De- be implemented because of the high lev- California. CalCOFI Report 44:86–93. pending on the level set for trap limits, el of approval among fishermen. Trap

http://CaliforniaAgriculture.ucop.edu • OCTOBER-DECEMBER 2004 191 California Dungeness crab fishermen were surveyed about new management measures to distribute the catch more evenly throughout the season. The majority — except large vessel owners — support the establishment of limits on the number of traps per vessel. Commer- cial fisherman James Gullett and Humboldt State University student Aaron Bliesner pull traps on the Humboldt County coast. limits may be implemented together abundance estimates needed to set in- tools could be used to slow the fishery with other restrictions such as daylight- dividual or community quotas. If quota by reducing the fleet’s fishing efficiency only fishing and trap limits that differ systems were ever implemented, these and harvest capacity. Not surprisingly, between central and Northern Califor- concerns would have to be addressed. daylight-only fishing was significantly nia. The recently implemented buyback In addition, individual or community more popular with smaller vessel own- of trawlers (December 2003) adminis- quotas would have to be specified geo- ers for whom night fishing is impracti- tered by the National Marine Fisher- graphically to be effective. cal and risky. Daylight-only fishing ies Service (NMFS) included 23 large Given the current unfavorable opin- would reduce competition from large vessels that also fished for crab in Cali- ion of quota systems, they are unlikely vessels that can fish many more traps, fornia (U.S. Congress 2003). Fishermen to be considered seriously in the near 24 hours per day, and in adverse weath- remaining in the trawl, pink future even though they would likely er conditions. and Dungeness will repay slow the pace of the fishery. The Pacific about 80% of the cost of this buyback Fishery Management Council’s fall 2003 Where is the fishery headed? to NMFS. This 27% reduction in large decision to examine individual fishing This study clearly shows that the ma- vessels that fish crab may change the quotas for the groundfish trawl fishery jority of the vessel owners favor some dynamics of industry discussions about could influence future knowledge type of trap limits and some limitations trap limits. and attitudes about quota systems in on fishing at night. The larger, higher Quota systems. Quota systems the crab fleet. The British Columbia producers, who are fewer in number, would assign specified harvest rights (Canada) groundfish trawl fishery has tend to view further restrictions nega- for a proportion of the total allowable operated profitably in recent years tively, as hampering their ability to fully catch to individuals or communities. under an individual quota system. utilize their harvesting capacity. These They are generally perceived unfavor- This has provoked a high level of decades-long differences in opinions ably by all sectors of the crab industry. awareness and interest from the U.S. due to vessel size continue to make In theory and in practice, however, Pacific Coast trawl fleet. The council management changes difficult. these harvest-rights systems create in- conducted public scoping meetings on The most likely near-term outcome centives that slow the race for fish and trawl fishery individual quota systems is the adoption of some form of trap shellfish and provide opportunities during summer 2004. limits, at least on an experimental basis. for innovative marketing to add value Regional or zonal management. The crab fishery in Washington recently (Casey et al. 1995; NRC 2001); both Owners of larger vessels tend to view adopted tiered trap limits and Oregon results might improve the economic spatial management unfavorably. Their is seriously considering them. If Oregon performance of the fishery. With assured comments indicated a desire to move implements trap limits, excess gear from access to a proportion of the total catch, freely throughout the state to take ad- Oregon could wind up being used in Cali- quota holders could time their fishing vantage of the earlier season opening in fornia and further intensify the fishery, and configure their fishing operation to central California as well as to maintain pushing California toward trap limits. maximize profitability. Some processors flexibility in their operations. Some Any trap-limit program should be currently are able to do this to some fishermen would like to see trap limits closely evaluated after implementa- degree by freezing crab harvested early only for central California and a uniform tion. Other than preventing explosive in the season and then processing and season opening date statewide. We feel growth in the amount of gear fished, a selling the meat during the year to meet that regional differences are likely to be single level of trap limits (250 traps per high-value demand by restaurants (see part of any changes in crab management vessel is proposed in current pending sidebar, page 190). because crabs are usually more abundant legislation) alone would likely have Survey respondents were concerned in Northern California and the northern little effect on the overall fishery other about the potential excessive aggrega- vessels, on average, are larger. than some transfer of catch from larger tion of harvest rights and difficulties Daylight-only fishing and one trap- operations to smaller ones. As in many in making the accurate annual crab haul per day. These two management other common-pool natural resource

192 CALIFORNIA AGRICULTURE, VOLUME 58, NUMBER 4 settings, the potential for redistribution years. Fishermen, processors, DFG staff Thanks also to Janelle Kohl, California Sea of profits serves as a potent barrier to and key legislators have high awareness Grant Extension Program, for her assis- change (Hackett 1992). and knowledge about this approach tance with editing and layout. This research If the fishermen’s goal is to reduce compared to other alternatives. was supported in part by the National Sea the total amount of gear fished sig- Rogers (1995), in summarizing the Grant College Program of the U.S. Depart- nificantly below the current total of large body of research about the adop- ment of Commerce’s National Oceanic and approximately 170,000 traps, some tion of new technologies and practices, Atmospheric Administration under NOAA plan for systematically lowering total demonstrates that people go through Grant #NA06RG0142, project #R/F-187, trap numbers will be needed. Some a series of stages in their process of through the California Sea Grant College options include: adoption or rejection. Crab fishery par- Program, and in part by the California State Trap certificates. Transferable or ticipants are clearly well along in this Resources Agency. The views expressed nontransferable certificates could be process for trap limits and have devel- herein do not necessarily reflect the views of used that fit under an overall statewide oped perceptions of their relative advan- any of those organizations. or regional trap total. This total could be tages or disadvantages. However, many References adjusted downward in an orderly of these same participants have not been Acheson JM. 2001. Confounding the goals over the years to reach a generally accept- as focused on alternative management of management: Response of the Maine lob- able number. Setting a target trap total(s) tools and are not as far along in the ster industry to a trap limit. N Am J Fisheries at the beginning of the process may help adoption/rejection process for them. Mgmt 21(2):404–16. fishermen to accept the program. In addition, the California legisla- Casey KE, Dewees CM, Turris BR, Wilen JE. Vessel trap limits. 1995. The effects of individual vessel quotas Limits could be ture — rather than the Pacific Fishery in the British Columbia fishery. Ma- set lower each season until reaching a Management Council, DFG or the Fish rine Resource Econ 10(3):211–30. target level. Larger vessels would likely and Game Commission — has primary [CFAC] Coastal Fisheries Advisory Com- oppose this approach. Trap limits could responsibility for policy related to the mission. 1997. Georgia Blue Crab Fishery Management Plan. Blue Crab Issues Subcom- be scaled to vessel size. Dungeness crab fishery. (The U.S. Con- mittee. Georgia Department of Natural Re- Buy out. Those interested in leaving gress transferred this authority to the sources. Brunswick, GA. the fishery would receive a monetary individual state legislatures in 1996.) Didier AJ. 2002. The Pacific Coast Dunge- ness Crab Fishery. Pacific States Marine Fish- payment similar to the recently imple- The long-term lack of industry consen- eries Commission, Gladstone, OR. 30 p. mented trawl-fleet buyback through a sus has made management changes by Dillman DA. 2000. Mail and Internet Sur- government loan. Those remaining in the legislature difficult in the past and veys: The Tailored Design Method (2nd ed.). the fishery would reimburse the govern- is a likely barrier to alternative man- New York: J Wiley. 464 p. Hackett SC. 1992. Heterogeneity and the ment over time. Some restrictions on agement approaches in the future, with provision of governance for common-pool traps would be needed to prevent exces- the possible exception of some form of resources. J Theoretic Politics 4(3):325–42. sive expansion by those remaining. trap limits. If trap limits are adopted Hankin DG, Warner RW. 2001. Dungeness Harvest-rights system. crab. In: Leet WS, Dewees CM, Klingbeil R, Transferable in the near future, but do little to solve Larson EJ (eds.). California’s Living Marine or nontransferable rights would allocate perceived problems in the fishery, then Resources: A Status Report. Sacramento: Cali- a proportion of the overall allowable it is possible that industry, fishery fornia Dept. of Fish and Game. UC DANR Pub catch to each fisherman. This could managers and the legislature will focus SG01-11. p 107–11. Hays HL. 1988. Statistics (4th ed.). Orlan- slow the race for crabs and provide their attention on additional manage- do, FL: Holt Rinehart Winston. 1,029 p. incentives for fishermen to make their ment options. Larken SL, Milon JW. 2000. Tradable effort individual businesses more efficient. It permits: A case study of the Florida spiny lob- would require improved estimates of ster trap certificate program. In: Proc Tenth Biennial Conf Int Inst Fisheries Econ Trade. crab abundance, improved enforcement, http://oregonstate.edu/Dept/IIFET/2000/ quotas within geographic zones and C.M. Dewees is Sea Grant Marine Fisher- papers/larkin.pdf agreed-upon quota aggregation limits. ies Specialist, and K. Sortais is Research Leet W, Dewees C, Haugen C. 1992. Status quo. California’s Living Marine Resources and their Let attrition under Associate, Department of Wildlife, Fish Utilization. California Sea Grant Extension the current restricted-access program and Conservation Biology, UC Davis; M.J. Pub UCSGEP-92-12. Davis, CA. 257 p. gradually reduce fleet size and perhaps Krachey is Graduate Student, and S.C. Manly BFJ. 1997. Randomization, Boot- the number of traps fished. This would Hackett is Professor, Department of Eco- strap, and Monte Carlo Methods in Biology (2nd ed.). London: Chapman Hall. 399 p. likely take many years. nomics, Humboldt State University; and [NRC] National Research Council. 1999. Trap limits appear to be the only al- D.G. Hankin is Professor, Department of Sharing the Fish: Toward a National Policy on ternative with a likelihood of adoption Fisheries, Humboldt State University. The Individual Fishing Quotas. Washington, DC: Nat Acad Pr. 422 p. in the near term, but the long-term con- authors acknowledge the 243 crab fishermen [PSMFC] Pacific States Marine Fisheries sequences of that approach are unclear. who generously shared their opinions and Commission. 1993. A review of the California, Why haven’t management tools used information about their business operations. Oregon and Washington Dungeness crab elsewhere in the world been seriously We thank George Boos, Jack Carlson, Peter fishery. Gladstone, OR. Rogers EM. 1995. Diffusion of considered in California? It could be be- Leipzig, Chuck Wise and Richard Young (4th ed.). New York: Free Pr. 519 p. cause trap limits have been considered for helping to set up project focus-group US Congress. 2003 (Nov. 4). Fed Reg and debated in great depth for many meetings and workshops in fishing ports. 68(213):62435–8.

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