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The economics of Maine life
Business | State | Friday, July 16th, 2010, 12:46 am

Question for the crowd


So I had a little conversation on Twitter last night with Alec Maybarduk about whether Darden’s move to raise their own rock lobsters would actually affect the price of lobster across the market.

This all came about when Alec retweeted our post on Darden’s and added “bad news 4 ME lobstermen.” I responded, “actually, they’re raising rock lobster, which don’t come from Maine. Darden’s said they’ll continue to buy ME lobster.”

To which he replied: “actually, langostino has already cut into maine lobster even tho it’s a crab, i see a real threat of downward price pressure here.”

When I asked Bob Bayer of the Maine Lobster Institute whether the aquafarms would lower prices, he said rock lobster is “not something that’s really competitive; it’s an entirely different lobster,” than the Maine lobster we’re used to. “It’s almost like a different market,” he added. Additionally, Darden’s spokesman said the company has no plans to stop buying Maine lobster.

I understand Alec’s argument: More lobster on the market — regardless of the variety — will naturally lead to lower prices in the aggregate. But the counterargument is that the demand for Maine lobster is relatively inelastic; it doesn’t matter what else is on the market, people will always want and need the iconic and irreplaceable clawed lobster.

What do you guys think? Will more rock lobster lead to lower prices for Maine lobster?

Discuss…

D.S. MacLeod is editor of The Haul and a founding editor of the Observer.

2 Responses to “Question for the crowd”

  1. Carl Natale says:

    What else is Bob Bayer going to say? That’s the linchpin of the Maine lobster marketing: Don’t settle for anything less.

    I agree that increased supplies of cheap, non-Maine lobster are going to lower market prices overall.

    But if you’re planning a dinner party to impress guests (weddings and corporate functions come to mind) are going to order Red Lobster’s rock lobsters?

    What Bob needs to worry about is some frugal expert appearing on a morning talk show explaining why you don’t have to pay a lot for this lobster. “It doesn’t have to be from Maine to taste good. Especially after you dunk it butter.”

    The Maine lobster industry probably has worse things to worry about but this can’t be good news.

  2. Michael says:

    Rock lobster is “substitute good,” so you can expect prices to fall in the long run. Maine lobster may or may not turn out to be inelastic, I would expect it to be increasingly elastic if the taste is indeed identical. People will realize the harvesting process is moot and gravitate towards the cheaper stuff.

    What I’m curious is, why the negative tone about lowering prices? Lower prices mean more people will have access to some variety of lobster.

    Perhaps lobster will become like pineapple – a former sign of luxury that becomes cheap and accessible to everyone. Lobstermen will go the way of the Luddites, the town blacksmith and the cooper.

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