How is "market price" for lobster determined?

October 29, 2011 1:59 PM

How is the "market price" of lobster determined? Is there a lobster exchange somewhere?

I'm particularly interested in Massachusetts - but would be interested in Canada or other states too.

posted by JPDD to Society & Culture (5 answers total)

I'm not sure of the context of your question, but "market price" generally refers to the price that someone is selling an item at. In the case of lobsters, that would be the price at which the lobsterman sells it to whoever he sells it to.
posted by dfriedman at 2:31 PM on October 29, 2011

Do you mean when you see items on a restaurant's menu, and the pasta is $20 and the lobster is "market price"? That means that the price is variable based on what the restaurant had to pay for it.
posted by J. Wilson at 2:40 PM on October 29, 2011

Response by poster: Sorry - what I mean is: the Massachusetts Lobstermen's Association produces a weekly "price report" (http://www.lobstermen.com/price-report/) wherein they advise their membership on current market conditions - and suggest where the price may go in the future. Where do they get the market information for this report? Is there an algorithm for determining expected future price? Is this a type of price fixing? I suppose I could contact the MLA for this info but I thought I'd ask the smart folks here first. Google hasn't been terribly helpful.
posted by JPDD at 2:52 PM on October 29, 2011

My grandparents used to live in a lobstering town in Maine. The setup there as I understand it was, the lobstermen were all members of a co-op. The co-op bought lobsters at a uniform price from anyone who was a member, and then it sold the lobsters on to stores or restaurant suppliers or whatever at a uniform markup.

I don't think there was any requirement to join the co-op. Just that everyone on the island, as a practical matter, did join, because setting up your own distribution network and advertising and whatever would have been a colossal pain in the ass and nobody wanted to bother when the co-op was already there.

But so it wasn't just individual guys on boats coming up with prices at random. There was a single set market price at any given moment that applied to any member of the co-op — meaning, in practice, anyone on the island.

(I am not a lobsterman. I am definitely not your lobsterman, and this does not constitute lobstular advice.)
posted by nebulawindphone at 3:07 PM on October 29, 2011 [12 favorites]

From a historical perspective, the modern price of lobster is an interesting intersection of perception, technology, supply and demand. Until the late 1800's lobsters were extremely plentiful: tons of them were often left on the beach, washed up by a high tide or storm surge. They were so common, in fact, and so easy to pick up, that they were considered food for the poor, a repast fit for only prisoners and slaves. It took the expansion of the US into west and a dependable, fast rail transportation system (and later, reliable refrigeration) to deliver fresh lobster inland, where its relative rarity began to demand higher prices, creating an association with fine dining.

Also, the lobster we have today is much, much different from those of 100 years ago. While they are obviously not extinct, over-harvesting has reduced the average size from 6 - 10 pounds (and 40 pounds is possible - no-one actually knows how lobsters can live, but it's at least 140 years) to an average under 2 pounds today, which also serves to drive up the price.

(The Memory Palace has an excellent, related podcast episode).
posted by Bora Horza Gobuchul at 8:00 PM on October 29, 2011 [2 favorites]