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Commercial Fisheries News
Volume 32 Number 10
June 2005
Volume declines; Portland Fish Exchange raises fees
PORTLAND, ME – Balancing the need to provide solid services to the fleet while coping with reduced cash flow due to lower groundfish landings, the Portland Fish Exchange’s board of directors voted to raise fees, effective April 1, by an average of 11 percent.
The fees work on a sliding scale, where buyers and sellers pay a certain amount depending on the bid price of the fish.
“We went forward with a fee increase to ensure we would be here to serve the industry –- and not just in a bare bones way but in a robust way,” said Tom Valleau, president of the exchange’s board.
“We can’t help this industry if we’re not around, so the first thing we have to do is stay in business. And we want to be financially healthy, self sufficient, and have a confident business plan to serve our customers,” he said.
But providing services and upgrading technology take money, which was in short supply given the drop in groundfish landings since the court-ordered settlement agreement and then Amendment 13.
In fiscal year (FY) 2001, which ran from April 1, 2000 through March 31, 2001, the exchange handled 26 million pounds of product. In FY 2005, which ended March 31, the exchange handled 18.8 million pounds.
“We’re seeing increased overhead costs like everyone else,” said Hank Soule, the exchange’s general manager. “We’re feeling the increased fuel costs in our utility bill. Our insurance rates are up. Workman’s comp has increased.”
Plus, the fish business is the fish business. Sometimes everyone gets blown home in a storm all at the same time and sometimes no one’s fishing.
“We’ve got to be able to handle 200,000 pounds one day and 20,000 pounds the next,” Soule said.
The overhead costs of being geared up for 200,000-pound days, however, takes a bite out of the budget.
After weighing all these factors and refusing to sacrifice fundamental services or long-term strategic planning and upgrades, the board reluctantly pursued the fee increase.
“We went into this with all that perspective in the back of our minds,” said Valleau. “We don’t want an antiquated auction.”
Haddock crucial
The Portland Fish Exchange, a nonprofit organization, banked on the fleet being able to land more haddock during 2004. It didn’t happen for a number of reasons.
Still, haddock is making up an increased percentage of the fish on the auction floor, even though overall volume is down.
From January through April of 2003, the exchange handled 8.6 million pounds of groundfish, 9 percent of which was haddock. By January-April 2005, landings were down to 5.8 million pounds, but haddock made up 19 percent of the volume.
So what if the fleet really starts bringing in millions and millions of pounds of haddock from the Eastern US/Canada Area? Will the market be able to withstand it?
Absolutely, said Valleau.
“I think you’ll see an orderly sorting out of these things. I have full confidence in the marketplace being able to absorb increases in haddock volume.”
According to Soule, it’s not as though increased haddock landings would take anyone by surprise.
“A lot of people in industry have been prepping processors about this for two years now,” he said. “Are the markets there yet? No. Will they be there? Yes.
“It will definitely call for investments in processing technology, so the processors need to see stability in the management regime first and rules that will allow fishermen to harvest these fish. Processors need a steady supply to regain steady customers for groundfish.”
In conclusion, Soule said, “I think the processors will be able to move the fish. The price will drop but the volume will be there. Market timing and quality will become more and more important.”
Janice M. Plante
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