Russian imports cut crab prices

Alaska crabbers say they are stunned by scale of downturn

Posted: Monday, December 18, 2006

SEATTLE - The Costco king-crab legs are thick and meaty. But the real lure is the price: At $10.99 per pound, they are a quick sell to holiday-season shoppers.

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Puget Sound crabbers used to make fortunes hauling in such gourmet fare from the treacherous waters off Alaska.

The crabs on display at Costco, though, are price-cutting Russian offerings from the distant Barents Sea, where a Soviet-era experiment to transplant the king crabs has turned into a booming 21st-century harvest.

These Russian kings are much bigger, on average, than their Alaskan counterparts. And the jumbo legs are flooding into American markets, creating bargains for seafood lovers and stirring anger among U.S. crabbers.

In years past, king crabs often sold on retail markets for between $14 and $20 a pound, according to John Sackton, editor of News. In recent months at Seattle supermarkets, smaller king-crab legs have been marketed for as little as $6.99 a pound, and the large Russian crabs - from the Barents Sea that Russia shares with Norway - have often been featured for $9.99 to $11.99 a pound.

"We're growing the market, and selling a lot of crab," said Jeff Lyons, senior vice president for foods at Costco, which offers Barents Sea king crabs on weekends. "Right now, they're cheaper than our beef fillets."

Alaska crabbers have been stunned by the scale of Russian imports, which this year are double the amount in 2004, according to U.S. Customs statistics. The Russian imports include both the big Barents Sea crabs, and smaller kings from Russia's Pacific waters.

During the past decade, poaching has been a frequent problem in Russian fisheries, and Alaska crabbers have requested a U.S. Commerce Department investigation to determine if some king-crab imports are a black-market product caught in violation of Russian harvest quotas.

"We're upset about this," said Arni Thomson of the Alaska Crab Coalition, which represents 45 vessel owners. "This is our livelihood, and everything is by the rules and closely regulated for a sustainable harvest. But the competition has a different set of rules."

Some of the competition is based in Seattle, where Darryl Pedersen, a veteran of the Alaska crab harvest, is involved in a joint venture in the Barents Sea that sells to Costco and other retailers.

This year, the Russians have authorized a huge legal quota of some 30 million pounds of crabs, more than double the size of the Alaska harvest. Pedersen scoffs at the notion that the Barents Sea is beset by large numbers of pirates who take crabs beyond the legal limit.

"The Alaska guys are stressed because frankly, they don't compete," said Pedersen, president of Keyport Foods, which works in a joint venture that claims 40 percent of the annual Russian quota. "It's like trying to sell a Taurus, when Lexus comes in with a new car."

In the Russian waters, a large-scale harvest began in 2002 with vessels that can catch, cook and freeze the crabs at sea. Some of the vessels have been recycled from Alaska fisheries, and several dozen Americans work as advisers on board the Russian fleet.

For Alaska crabbers, the Russian competition emerges as the industry undergoes dramatic changes.

For decades, the crab harvest pitted vessel against vessel in short seasons that were often scarred by capsizings and loss of life. Then in 2005, a new system allocated each vessel owner assured shares of the catch.

Under the new system, no crew members have died. But the fleet has shrunk dramatically and hundreds of crew members have lost their jobs.

The vessels that remain must sell their catch to a select group of U.S. processors vested with special purchase rights. And, the abundance of Russian crab has helped these processors ratchet down the prices paid for the fall harvest from Bristol Bay in Alaska.

As the season now ends, the final price is expected to be at least 40 percent below the price paid to vessel owners during the 2002 market peak. This also means less money for the crew members, who work marathon hours through the fall storms to bring in the catch.

"There's no question that the influx of Russian crab had damaged the market," said Greg White, who has represented crabbers in negotiations with processors. "This has caused some hardship."

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