Fishermen's News - The Advocate for the Commercial Fisherman

From the Fleet: The Great Crab Tie-Up

 


At the turn of the New Year, the biggest tie-up in Dungeness Crab Fishing history was triggered by the actions of one fish buyer.

Disclaimer: Hundreds and maybe thousands of fishermen sat through days of meetings or stood outside of meeting halls waiting for news while men and women in each port ran those meetings. Not everyone is credited here by name, but none of the names have been changed to protect the innocent. Nor is it possible to hold harmless the entities responsible for the largest crab tie-up in West Coast history. For myself, I freely admit to finding something else to fish for most winters. I am not a crab fisherman. Lastly, I understand that anything I say may be used against me.

So, let’s get started.

First, I am going to refer to this event as a “tie-up,” not a strike. It seems like strikes are for unions, and fishermen for the most part are way too independent to truly unionize. So – fishermen did not strike; they were struck, and struck hard, by one major conglomerate in the fishing industry. Also subject to hammering were all the other seafood buyers, dock and plant workers, distributors, retail outlets and ultimately our biggest supporters, our friends and neighbors, the public.

The Acid Test

Domoic acid, a naturally occurring neurotoxin produced by phytoplankton, shows up from time to time in all kinds of marine animals, including, at times, Dungeness Crabs. State health departments routinely test shellfish to monitor levels of domoic acid and when levels over 30 ppm appear in the gut of crab samples, these health departments close those fisheries. In California, testing showed high acid levels in District 6 and 7 crabs in the late fall. Domoic Acid levels in District 10 (San Francisco) were at acceptable levels to open that area below Point Reyes to fishing by November 15, 2016. Areas north to District 6 (North Jetty, Humboldt Bay) remained closed after December 1, 2016. Fishermen wishing to fish in the closed areas were put on hold.

When the guys in the city (San Francisco, Half Moon Bay, Monterey Bay) went fishing, all of the buyers were paying at least $3.00 per pound for crabs, and some were paying $3.25. Off-the-boat sales to the public were considerably higher, but there wasn’t a complaint or a squeak from anybody buying crabs at $3.

When District 6 (Humboldt North Jetty to the Oregon Border) and the area from Brookings, Oregon to Cape Blanco opened, all buyers again paid $3.00 per pound for crabs. While waiting for District 7 crabs to test clean, Humboldt Fishermen’s Marketing Association (HFMA) asked the California Department of Fish and Wildlife (CA DF&W) to establish a temporary line at Cape Mendocino so that the “clean” northern area in District 7 could open with District 6. That did not happen and instead more testing took place. HFMA also asked CA DF&W to try to schedule the eventual opening of District 7 away from the Christmas holiday to avoid conflicts and bad weather. On December 20, CA DF&W announced a partial District 7 opening with the Usal area south of Shelter Cove remaining closed down to about 10 Mile River, north of Fort Bragg. The department said that the pre-set could start on December 23, and that boats could haul gear at 12:01 am on December 26. Fishermen were disgusted by the CA DF&W decision, which would have forced fishermen to work on Christmas day, and so another meeting was held to delay the pre-set and haul dates in District 7 by a gentlemen’s agreement among fishermen. By December 20, there had already been eight “open port” meetings sponsored by HFMA in order to disseminate information to all port fishermen. Port fishermen were informed and working cohesively in the Ports of Eureka and Fort Bragg.

P.C.G. (Pure Corporate Greed)

Late Monday, December 26, 2016, Pacific Choice, a subsidiary of Pacific Seafood group, announced to District 7 fishermen their intent to lower the price for Dungeness Crabs from $3.00/pound to $2.75.

A couple of things happened immediately when Pacific Seafood Group decided to lower the crab price in District 7. The seafood buyers up and down the coast were completely taken by surprise. Fishermen in the open districts in California and Oregon, where an orderly crab fishery had been proceeding smoothly, were also blown out of the water by the news. Most importantly fishermen in District 7 mobilized quickly, and on December 26, 43 fishermen met at the HFMA offices to discuss Pacific Seafoods move.

Pacific Group may have believed that the few fishermen in the ports of Fort Bragg, Eureka and the minor ports of Shelter Cove and Point Arena would just roll over and mindlessly accept the lowered price offered. District 7 fishermen may have been perceived as the “weak link” on the coast because of winter financial demands on fishermen’s families from having to wait for District 7 to test clean for Domoic Acid and open to fishing. Pacific Group may have bet on a cascade of downward ex-vessel prices as northern Oregon and Washington opened for fishing if District 7 fishermen knuckled under and fished for $2.75. According to John Sackton of Seafood.com, the Dungeness crab Market is in really good shape with high demand and little carry-over freezer inventory. So, some fishermen asked, “why would Pacific Seafood try to drop the price”? The answer on the dock was “because they can”.

Herding Cats on the West Coast

The news of the tie-up in District 7 quickly spread both north and south on the US West Coast. Fishermen’s Port Associations began a number of informational calls to inform association and non-association fishermen of the activity and status in each port. While no price information was available during those calls, at subsequent open port information meetings, fishermen stood by as each port to the north tied up to support the original $3.00 price for crabs. Older fishermen, with long histories of watching various ports’ attempts at price solidarity, and remembering the difficulty of convincing the fleet to tie-up, reminded folks of the joke about herding cats, but in 2017 things have changed.

The Electronic Media Machine

Immediately upon tying up, HFMA began sending press releases to local media. Within 24 hours, the press releases had been picked up by the Associated Press, CNBC and many major newspapers, news outlets and social media. Within a day, the media suction for additional information about the tie-up was strong enough to require seat belts for those writing press releases for the fleet. TV and radio hosts interviewed fishermen in every port. Articles about Pacific Seafood Group, the price drop and the vessel tie-up made it as far as England, Europe, Japan and New Zealand. Mysteriously lacking was any public comments from the medium and smaller buyers who had been paying the $3.00 all along. The only public response to the tie-up caused by Pacific group was from the Pacific Seafood Group’s general counsel (read lawyer) Dan Occhipinti. In an emailed statement from Pacific Choice, available on http://www.seafoodsource.com, General Council, Daniel Occhipinti called for solidarity across the production line.

Solidarity? Nobody else dropped the ex-vessel price!

Mr. Occhipinti also said “…. We are all in this together…”. Pacific Seafood Group owns at least 47 different businesses from Alaska to Texas to Nova Scotia. This does not include companies in which Pacific Group holds less than a 50 percent interest, or other businesses influenced by family ties or business relationships. This might be Pacific Seafood’s definition of “we”; at least that is what is listed on their stationery.

Standing in the Street with a Sign

For better or worse, electronic devices continued to spread both accurate and wildly bad information via Facebook, email and text messages. I have been told that you could read just about anything you could stand. That being said, a lot of people weighed in on the coast tie-up. The word in Eureka was that the Pacific Choice plant manager turned off his email and may have to change his phone number. At the same time a young independent fisherman positioned on a street corner held up a polite sign with the Pacific Choice Seafood phone number. He received more than 250 “honks” and tons of thumbs up. During a coast wide call, near the end of the tie-up and late in the evening, one port received a text stating that the entire port to the North had left the harbor. Fortunately the entire northern port was still in the room and on the call.

What’s Happening Behind That Curtain?

While all the efforts to re-establish the original price was taking place port by port in three states, the Oregon Department of Agriculture hosted two negotiation meetings with processors and fishermen’s representatives for Oregon only. The results of the first meeting, while not totally clear, seemed to yield little dialogue and no motion from buyers to reconsider anything more than the Pacific Group offer of $2.75. Some fishermen wondered if it was difficult for other processors to speak up with the proverbial 800-pound gorilla in the room. At the first meeting fishermen requested binding mediation, which the processors refused. The tie-up continued. This produced even more port meetings and a call to stabilize the fleet and, days later, kind of a request by the processors for another “behind the curtain” meeting. California and Washington fishermen honored the Oregon request to refrain from any comments or attempts at influencing the negotiation process. Finally on January 6, 2017 word spread down the coast that Oregon settled at $2.875 per pound, representing an even split of the difference between $2.75 and $3.00.

Winners and the Losers

Who won? Well that is certainly not at all clear to me. The entire West Coast fleet deserves praise for such unbelievable solidarity and stamina while watching one good weather window after another pass by. Guys with gear at risk in the ocean with no easy way to tend it deserve extra praise. Fishermen who attended the 36 conference calls and meetings, of which I have recorded handwritten transcripts, and the poor guys running those meetings were pretty much toast at the end of the day. Lastly, the negotiators locked in the closet with the processors did a hell of a job.

Well, as far as the public is concerned, Pacific Group gave themselves and their company’s reputation as a community member, a big black eye. On the other hand, Pacific Group and the processing industry will pocket another $250.00 per ton on Dungeness crabs. Some consumers are skeptical that they will see a price reduction for Pacific Seafood’s $19.99/lb. (plus shipping!) offer for live crabs.

And who were the losers? Well, for sure locally, the mayor of Eureka and the Boy Scouts who cancelled their fundraiser crab feed after spending their advertising budget. Also, the Eureka Mainstreet holds an annual festival celebrating these crabs, which had to be canceled this year. Please include in this list all the public, the seafood work force, and the crab market’s reputation for consistency.

Another bunch of guys that seriously took it in the shorts were the fishermen in District 10 (San Francisco) who gave up good markets at $3.00 and better markets at $3.25 to hold fast with the coast. These are the same guys that put up with some serious carpet-bombing with crab gear when their district opens first in November.

The Future

Well, the future is a crapshoot back in a dark alley with people you don’t know. Larry Collins in San Francisco did a pretty good job of contrasting the good old days dealing with a few local seafood buyers versus today with huge sections of the industry rapidly being consolidated by corporate behavior. Acquisition of boats, permits and quota share by non-living entities will continue to make things tougher for individual fishermen to succeed, especially if you are younger. Watching small family fish companies disappear under the crush of the “big boys” is really hard to take, but fishermen got a good taste of their collective power last week. Remember, no fish plant can operate without your product. Vote with your fish – deliver it where it counts.

Epilogue – The Morning Report

At 5:30 the morning of January 7th, a handful of boats fishing in District 6 ran down the bay in heavy rain. By 6:30 am, we had 30 knots of southerly and driving rain here at our house on Humboldt Bay, and it’s only worse on the outside. One thing for sure, the “corporate leaders” in the seafood business, responsible for this mess, don’t have the [guts] to do this job that they are unwilling to pay for.

Be careful out there!

Ken and Linda Bates

F/V Ironic

Eureka, California

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